SLNG - Earnings call transcript Q2 2019 | Stabilis Solutions, Inc.

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Operator

Good day, ladies and gentlemen, and welcome to the Stabilis Energy’s Second Quarter Earnings Call. All lines have been placed on a listen-only mode. [Operator Instructions]

At this time it is my pleasure to turn the floor over to your host, Jim Reddinger, CEO. Sir, the floor is all yours.

Jim Reddinger

welcome conference the call. and quarter Energy’s Julie, earnings XXXX you, everyone Stabilis to second Thank our and I'm of with Puhala, Stabilis Reddinger, Energy; Vice Jim the and me President is Financial Officer. Chief and CEO Senior President Andy

Exchange Industries, company. saying the Exchange suppliers open both few trajectory the a demonstrated a us Transaction in the under Stabilis. distribution the a) that by LNG for and the NASDAQ the Energy’s we future days, position one public which balance Chart’s has equipment last been made confidence role small-scale driving in I'd our for like Chart XX and of b) call We to growth. closed SLNG it on we sheet biggest of to LNG that of market and growth investment In the de-leveraged strategic Stock world, strong commenced and the global busy in trading months our symbol Stabilis a the company Share completed from liquefaction growth;

As been to business core our explore working growth as you'll we we've keep growing new hard external today, hear opportunities.

time, I'll discuss second talk call up open results. questions. over turn to for Andy? our LNG I'll more Andy a and After to that, about bit we'll then the quarter little our this trends At business the call

Andy Puhala

of realized release be situation and the the business, subsequent Form business annual www.stabilisenergy.com. the of Share the the does Form a for doing. press end results. our legacy the will accessed brief how to share of Stabilis we an just and yesterday, unusual the our quarter XX. the LNG summary for after Yesterday, which is include is with a Transaction on and includes We Exchange Stabilis the XX-Q this XX-Q AETI business website, filings for issued Due LNG that quarter, include AETI only not June Jim. to filed being results results wanted quarterly Thanks, the filed the ended Stabilis We can completed

West second of $X.X reported increase reported improvement XXXX. revenues to our in the due demand $XX.X related sand quarter, versus the of XX% QX of liquefaction Utilization in an The the increased and QX in of facility gas substantial of a the and George mines plant. utilization a increase to For million LNG to is Stabilis XX% only primarily exports. driven million, also increased compared primarily year-ago, Mexican oil by XX% particularly

this quarter faster significantly quarter our loss year the in of The customers EBITDA. EBITDA to incremental with in the for than utilization improved geographic a costs million along operating EBITDA mix strong was of a compared million QX of revenues to resulting improvement favorable allowed to in $X.X an same $X.X last year. plant increase

a measure As in press EBITDA EBITDA a and of as release. reminder, net be found non-GAAP to full reconciliation our a income can

the business. For in results the we transaction. driven $X.X the year six to mentioned EBITDA so look QX related for reporting million distribution first XXXX the of months and factors to earlier. by LNG from includes XXXX sides million, pleased also non-recurring six progress both months was forward financial our EBITDA June We're compared period revenues improvement with six increase AETI XXXX, for the million, the production call. XX% of a our of months the were ended driven on to first by this $XX.X our months six XXX% in the far the same and increases first $X.X costs approximately in deal in the XX,

the Jim? for some Jim to market. on back call the turn I'll that, With comments

Jim Reddinger

with finish current industry. state the of the to I'd my Andy. prepared few LNG on like a remarks Thanks, comments

are strong from exports. seeing as and including Mexican remote Our pipeline all and end activity industrial, applications pipelines and customer as mining, utilities, we is increasing power and ever demand energy, it, quoting opportunity we've markets seen

customers to and cost, stability. propane oil and to diesel, environmental to continuing greater are convert and lower We from supply take seek emissions of advantage price fuel to LNG’s lower LNG

to the While profile usually important LNG’s environmental primary increasingly cost reason to as is our advantage its customers LNG, use them well. choose becoming is lower emissions

Many many of their footprint and and their be of will these our to not them solution meet a customers able LNG reduce fueling for obligations without emissions commitments new meets to environmental needs.

market the and the future when remote we pipeline where relative and mile you to solutions lack attractive distributed the like natural critical. production parts growth the in forward buy with Mexico I growth North infrastructure new America in of to we where announce. to other look tremendous sees throughout opportunities as in price seeking fit well to Stabilis distribution assets last particular makes discussed, and LNG growth strategic LNG sense. makes Canada existing as speaking actively developments of are and North exciting previously build As American and opportunities see assets We gas in have

And with for it Julie? open questions. that I'll up

Operator

first ahead, Thank And George you. [Operator question questions. George. now our for The Berman with from floor comes ISS opened Instructions] is Securities. Go

George Berman

taking Thank for morning. my call. Good you

Jim Reddinger

George. Hi,

George Berman

Hello?

Jim Reddinger

for George. Thanks in. dialing Hi,

George Berman

Hi.

You mentioned you at completed outset the with the there? Chart Industries. exactly you have issued Can that specify exchange share you what

Jim Reddinger

that the The transaction of Electric exchange one not that's completed the The share completed American July. Chart exchange is Industries is transaction debt-for-equity yet. complete Technologies was with in was and an agreement

George Berman

Okay.

the So with Chart depend debt-for-equity exchange upon? what does the Industries

Jim Reddinger

of been the and on to the in the transaction maximum next closing. X% And time at million structure stock Stabilis debt the up of price the exchange of of $X month. be depending a established closes an Chart’s with closing has of there'll shares It of

George Berman

million share bring would That to your shares? about Okay. content XX total

Jim Reddinger

have but Andy, I I numbers think front me, the of approximately yes. in right, that's don't

Andy Puhala

we now shares right George, million have approximately outstanding. XX.X

So...

George Berman

Okay.

would that more? So be

Andy Puhala

shares of ultimately north issue million. we Yes. Depending how would that on many XX be

George Berman

It doesn't that from AETI release include itself. yes. here by morning that any this losses showed historic EBITDA numbers, is the gains Stabilis The numbers the or Yes. for that Company in solely you the press

Jim Reddinger

Stabilis EBITDA in breakeven see These you not can the The but numbers. roughly quarter. numbers AETI stand-alone the basically That’s correct, are AETI basis XX-Q, in on is quite breakeven, George. an

George Berman

let’s me, opportunity with to prices for is negative there's in value-add sort to Now, fuel as exceeding say gas six producer But – is natural has a where that plant or $XX exactly needs in I opportunity months. explain E&P million, turning do to useless to some being liquefied for of flared diesel a of then for power gas to I’m What offer those companies after spend using, producers. sometimes not available or with pipeline you natural understand natural $XX as million a in-field that a oil your natural a gas offer is even amounts, there producers because capabilities are $XX exactly turning tremendous of to amounts be deal flared massive no operations. to XX going into you the the gas? certain that mentioned, that oil profitable return million,

Jim Reddinger

helps use use natural and increased pricing on natural – producers macro gas incremental any the all a uptake with gas. George, any the of level increased of

perspective, for scale creating or So LNG small product. them demand the LNG it’s whether exported helps LNG new by from a macro

South producers Texas Specifically, the get Texas gas to of it's basins West in out the if looking whether transportation reduces at or basins in or needs those the you're Pennsylvania, production in basin.

demand additional helps pricing it with they pressures face. and that again, So them

allows of gas more general the have America North which the macro helps out basin, perspective, we're transportation helps which use natural basin. – gas the abundant LNG solutions back the a the offer them them to needs in in the we the from helps for reduces of where in basin demand And places, and ultimately gas processing they sell So, more. in increase we – for which can supply in have

George Berman

Right.

production they with have reducing the don't know their noticed are gas. oil So, now, natural because go where companies right I even some to

I what that flare, So you Can hundreds is, a month cubic every company, have Anadarko natural am I rid-off feet you millions advantage whatever to got out along or can't provide flesh an what? get and of, come of Apache and of I've possibility or you have advantage. of of gas that definitely if there

Jim Reddinger

the and able diesel whoever liquefy producers oil. or propane fuel can natural be to we it gas, in to gas used that distribute are or an so the We operations it operations other area, as take the or alternative other we're to that

engine natural gas burn example, burn an X gas. X diesel operations, they're as if to convert burning gallons they'll so of using an completions we for instead can in So, and engine help gallons natural that diesel, of of them

transportation can their expensive only gas So reducing using them that also fuels environmentally displace problems the gas. are more they other and and can natural them with harmful and/or takeaway not helps more that by natural help

George Berman

gas natural their you that lot are Are what fleets a work trucking – operations companies. their You converting operations sand do with power through mentioned frac drying or using still? they of

Jim Reddinger

in sand work with now the do we drying. of Texas sand is frac Most right frac fleets

and sand and Texas them frac operations. got mines locations they've So their drying in provide of with sand West fuel LNG to South remote we

George Berman

suppose, available? competitive is electricity more Which it’s if than I

Jim Reddinger

what gas is of operations. And in energy Yes. fuel what we're It not finding is for a very the are, again process we're the it pricing, a the solution steady the environmental seeing is depends benefits. all needs a predictable, gas of provides layout, as the on those site but the lot but And just location operations on that and natural well burn. competitive very

a other much or process activities, asphalt predictable and more than when other controllable any have it So allows some you're fuels drying to sand operation you frac do. or

George Berman

being you the Okay. as of Or they're an going users? owner are built? those solutions And you to selling plant operator do be foresee complete plants to

Jim Reddinger

operate sell We we gas do are solutions don't markets and others, the and we but look own then for production operator plants. distribution distributed to natural we need that natural and gas build, an We plants solutions, of owner assets. what is

So the the from site. to bring LNG site as own assets operate and the build, well the as liquefier the that we customer production would liquid

George Berman

little you of south Can the about Okay. your talk border? opportunities a bit

Jim Reddinger

the of of been are gas sites, tremendous being manufacturing as mile major to infrastructure connects U.S. sites, power the gas to to haven't of last have pipeline major lines distribution the put process the number because off cities And production the economy. that fields lack and many trunk those to Mexico production there see cetera in is but that We of Mexico a size and lines growth take of established. et would the of sites, the lines compared into that relative economy opportunity a been that growth pipelines Yes.

because that industries is natural same opportunity we U.S. So is Mexico many set look see a into Mexico. is infrastructure larger gas bring of solution difference the our a as there larger at pipeline we not great there for when so robust, distributed we opportunities – in the a opinion in serve the of of to The

George Berman

China, in question seems American Electric in which venture for [indiscernible] Okay. you Last merged assets? are and for me. very a the with What inherited operation two you Brazil. your When to be plans Technologies, those joint profitable

Jim Reddinger

We now, continue think as attractive you mentioned, plan as And is. We plans are in to they're own to our those to keep place operate and them assets. both, right assets.

George Berman

technology Okay. Any opportunity China joint joint to existing your with venture venture? the

Jim Reddinger

the future. now, on anything works that We in have right in potentially don't the but

George Berman

Okay. power access? Canada. where in come your guess locations And very no I you there plants play often available remote then is mentioned into readily

Jim Reddinger

that and seeing Mexico mining, also of power in in other energy industrial dynamics Same pipeline parts and Canada Yes. of we're lack infrastructure terms certain in to and communities. of remote remote

George Berman

on an from what the investment with is plant Yes. me ground costs of give associated Can idea a up? building you kind

Jim Reddinger

You're looking amount? for investment sorry. the I'm

George Berman

Yes.

Jim Reddinger

somewhat what the plant but in the South think we that's plant $XX supply of on equipment size constructed and for given range. depends prices all can market and approximately location; commissioned say since was our have in that is the We million. the It Texas then, down that rough the come Yes.

George Berman

one then is dismantled in plant you And being have that that Utah you stored? essentially

Jim Reddinger

certain a answer growth about think new filings and talked in our Utah. some exploring, and and areas it move was we've And location got public But we've of Texas packaged Mexico. And on. this yes, to Yes. as move operation placing of one that the in we're such parts we'll that we’ve West a I in to in plant it

George Berman

Okay, you. thank

Jim Reddinger

Thanks, George.

Operator

Capital Matt. ahead, Go next Dhane from Our with question Tieton . comes Matt

Matt Dhane

Great. get . update an on site. That’s Capital Matt liquefaction hoping with I was your Tieton search just for to a new

Texas, is near Is the that West around sounds with Mexico in you can forthcoming also search can an something option. mentioned What Or what is we here? you've us think share I like expect? going? future how it it more

Jim Reddinger

make our as to as in like now, don’t we both soon specific both progress announcements Well, have that locations feel any we've good we can. have we goal talked to something locations you've about, but is in up made and

you, with announce. more wish, right anything could I I So, to have but specifically now share we don't

Matt Dhane

opportunities of the Yes. traction new What's And market strong you mentioned newest in? you're how the seeing of that the area was. strong pipeline

Jim Reddinger

terms markets? In of end industry

Matt Dhane

Yes.

Jim Reddinger

there geographic and number mean a of - are lot in dependent. talked opportunities I a sectors. really of growth We've it is

If lack of there’s a the pipeline on across we the Mexican basic opportunities of natural a you in number a system. look gas, sector, just have every border distribution side, of because of

So going gas. greenhouses, used process into in attractive there. talked natural residential industrial We're industries talking seeing which work and general to a sites, the the two all a frac and with about field. plan West electric one, down potential fleets, off anything is on manufacturing to Texas and the Texas a there's purely mining. from of ways; George there to growth is to are South engines that designed If our completions of that's number sand And of areas technology to Texas mines, about parks, lot in engine commercial we're site, potential oil

X And introduced addition manufacturer burn to being as are natural efficiently then all up that in by to well. very are set Tier engines gas the

that applications We always country. the we regions repair. in remote not provide we sector help a demand pipeline demand the where see or lots of can we access perspective surge again And power We seasonal see under are pipeline is we remote pipeline fuel from damaged and tremendous opportunity pipelines utilities of available. So look or can around where opportunities. see supplement in or where number

provide down repairs, to fuel we they're from downstream sites. those can make shut while So

it's really general and a fuel dependent, LNG much So more theme that is commonly even five it than accepted I but the ago. think is understood geographic source was years

specked the that needs their operating years we phone pipeline, spectrum talk five a research they're an are I and I think alternative, of and inbound really we the across into as and And industries those to development their process. operators introduce introduce it as about that of the And to lot seeing it of making just having opportunities procedures. fuel characterize a ago, normal one to were about procedures to as talked lot everyday safety more use. now not product calls and

– changes now. that that's is product a So the to the aware us market of right the understand better lot and better

Matt Dhane

that's time? a in strategy. about Is what Great, don't that an great. folks? the announced question part Final of I are to surprised in your something active for this in you important point this acquisitions, me. for How group there have next and on at know you transaction arena. what’s where share Anything of be doing months that Mergers if you see going we or you're

Jim Reddinger

and private be we'd over market that process like to So generates a to able time business and there had more to that's will operating of the an we've of a investors platform with them with a be both do had office exit. opportunities LNG. distributors family And of the private seek time and number to scale. and company, to producers private discussions We those see equity, provide consolidate a that think number over we investments

again but now, we've discussed fit when nothing active as the the we find and have have been been valuation, announce announce discussions. So we'll it. right in to we right – right And

Matt Dhane

Great. you. Thank

Operator

there to Instructions] further appears questions [Operator be in queue. the And no

Jim Reddinger

forward next for everybody you thank Well, and look quarter. talking again to joining, we Great.

Operator

for you your thank We teleconference. today's conclude does This you. Thank participation.

day. You lines at time a and may this have disconnect your great

Stabilis Solutions (SLNG) 15 Aug 192019 Q2 Earnings call transcript