SLNG - Earnings call transcript Q1 2020 | Stabilis Solutions, Inc.

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Operator

Greetings and welcome to the Stabilis Energy Second Quarter 2020 Earnings Conference Call. [Operator Instructions] Please note that today's conference is being recorded.

Before we begin today's call, I'd like to remind everyone that today's conference call will contain forward-looking statements within the meanings of the Private Securities Reform Act of 1995 and other securities laws. These forward-looking statements are based on the company's beliefs and expectations as of today August 6, 2020.

Forward-looking statements are subject to the risks and uncertainties that may cause actual results to differ materially from those projected. obligation made updates in no the revisions undertakes statements forward-looking today's company to or release to The conference call.

President factors Mr. company's At I'd the SEC any undue concerning Energy. contained this Investors are announcing time information that on Jim Stabilis to these results. over and cause Please call Additional place not differences the in CEO company's the turn the any filings like ahead. and the reliance Reddinger, to cautioned with of to press release could is go forward-looking statement.

Jim Reddinger

was quarter costs. freeze quarter in discretionary by activity reductions, reminder challenges unexpected, we expenditure were travel last our the which aggressively Jim call. sold reductions, a see without quarter second and President goes earnings over expense with Donna XXXX revenues QX second We to including good our saying our Chief record were on Thanks the headcount morning responded to Andy challenging for conference like LNG reductions; everybody. beginning this as I decrease costs, and is as consulting quarter discussed CEO And XXXX Senior XX% to This us. reducing quarter is to We first Stabilis. many call. not compensation we earnings Officer. of President and the you and Stabilis. and first volumes quarter Financial capital companies results business the including a Reddinger, was quickly of and fall for Vice Puhala, from and me salary both that other the including and would saw It These welcome a

market manage we and to a provide and We position successfully new putting our through off we're to downturn. downturn. pivot opportunities broader think are opportunities growth focus However in putting that on despite efforts these paid the team the importantly, have most sales and market sales us

new and the activity that improving over us on for levels May optimism we about call discuss wins project our and for calls. that appears discussing it the we've the bottomed reason to are some in now see I'll opportunities Later the been of month-over-month. fact But and our In out give financial several I'll Andy first recovery results. turn comments in last the growth strategy validate some

Andy Puhala

Thanks Jim.

the of as and gas-related activities. XX% the George and West resulting -- The the primarily a decrease XX% ended versus second million of quarter in in due to million, impact $XX.X the activity contributed customers. is million particularly LNG decrease $XX.X XXXX. from delivered to is XX% the to For the first a due our $X million utilization winter QX. to Stabilis decrease reported typically quarter our XX% gallons to revenues also segment the facility down crisis, in $X quarter in the sequential revenues QX. were decrease shutdowns strongest the quarter reported compared first with XX, March Normal related oil of due fell factors LNG industrial seasonal to in COVID-XX peaking

from Our million $X.X reported loss joint segment the equity Power Net sequentially. was quarter. in venture $X XX% of previous million net of to income our delivery revenue a compared down million $X.X BOMAY

year. spot bright impacted that venture resumed Our results shutdown in as its China joint provided operations JV the a this after quarter, the the earlier

of current loss $X.X preceding quarter. the the negative quarter down million $XXX,XXX Net As in $X.X the net result in were increased to to the to million no adjusted positive quarter. the first EBITDA was $X.X for for adjustments quarter. EBITDA a from a a quarter the million in There compared loss

lower natural million results, XX% segment $X.X revenues of year-over-year QX to the accounted compared prices approximately XXXX. of the year-over-year the in decreased gas contracted crisis, by for quarter by to Moving the LNG revenues due $XXX,XXX second reduction. to

during As in year quarter cash venture The our year the QX of XX% was and in QX received down mentioned $X on quarter. plant which our from to our million BOMAY a merger turn not mentioned was with I million benefited from last to access of current now $X.X the million West have XX% net Jim million a the George million in $X.X year. included quarter joint in loss quarter. to believe Jim? as EBITDA closed the in net of Net also in utilization dividends year capital working Power to $X.X additional ago Adjusted from prior EBITDA our positive Delivery hand loss back We compared reduction we sources to quarter. to transaction the of manage the the We liquidity subsequent cycle. ago I'll ago was some year aided of the $X.X call and quarter. previously in segment finished the by million for adequate from as in remarks. of $X.X cash through quarter increased was

Jim Reddinger

Thanks Andy.

on encouraging As significant future. the crisis for had our signs I impact the COVID-XX second the in quarter earlier mentioned we're business a although seeing some

are contracts greenhouse Mexican of LNG. We both including currently have several call with customers new since a and a signed power customer taking remote last our that deliveries

to our marine technical of we XXXX by mining new first final the XXXX. include January goals the activity revenue a on In several contracts have providing stages customers begin In beginning of have volumes will services immediately significant one achieved and have customers significant with contract the for our several that bunkering in Mexican U.S., of negotiation of in potential utilize long-term that that LNG basis. addition we securing

the customers. call pursuing strong the a that winter as in several the we're And customer provide contract We year similar Northeast beginning later industry volumes have a this signed of last with a aerospace major major year. for with into expect we with QX peaking in this that And and customer to renewal in multiyear we signed future. opportunities LNG services actively indicated our a also in we

short-term new completed a for contract a recently also in interruption pipeline customer Texas. We

on base the levels broaden Our going and pace new to our excited these and about successfully to We're we're and will reduce goes and to as remains uncertain, which although growing our forward. recover customers and excited previous continue able customer is to opportunities. sales pipeline work. to through oil new the strong we're some gas-related reliance crisis that the traditional And at contracts back be these of and our revenue future opportunities about the world able confident we'll manage significantly

on mentioned providing to last small quarter We I provider and preeminent and become growing short costs diversifying piece of controlling to an seek small-scale North for remains liquidity. energy to We sales increasing the unchanged. our increasingly maintaining and to Donna customers. important value that With America's the over I'll as questions. will we're and focused become Finally continue service in turn LNG that long-term our call LNG believe term, America In the by superior solution. strategy North

Operator

today open Instructions] Tieton Dezellem Please Thank first for from floor question [Operator questions. coming is you. of Bill The now ahead. Our is Capital. go

Bill Dezellem

couple A was George here, questions West you. that XX% was last at the time one Thank with operating start utilization? of to

Jim Reddinger

about, confirm XX I Bill. you. it's Good months. months and XX for go back it will probably question, to But, have to

Bill Dezellem

it, we it you to point. running where And And for a West low today? if if a reasonable are basis, And weekly absolute on George that's at bottom what measure do was utilization? the way

Jim Reddinger

you? front those do numbers, Andy, in have you of

Andy Puhala

Yeah. Bill, running XX%. the We're it bottom running about in about got at of And -- as of to July, were XX%, utilizationm the down we May.

Bill Dezellem

is not talk recognize, for a there's preference taking the for a And dynamic? relative oil market, Great, and lot you -- to thank taking you fracking, instances I gas then, that are that those you. e-frac, there place. about could is Or where the fracking for But place? finding of

Jim Reddinger

variety U.S. talk we the There given And it really conclusions draw for I e-frac been But significant multiple COVID shutdown crisis, as basins period shutdown during throughout economic. momentum going if of certainly Well. momentum, about issues not forward, in a towards can before, don't know for that a activity I seeing the e-fracs any there of the we most time. applications, the shutdown the was can environmental about on a for has moving using started, significant started. all well. the were

Bill Dezellem

to I that a cases the question, with is frac operator that are has the was Yeah. stabilized-ish, to sensing Jim the count job there that's that e-frac an now where a early momentum was take the that traditional? where that done than e-frac know. And place, in that it be too going going rather meaning simply with guess, had you rather rig that I Or return, may is fleet, would

Jim Reddinger

before I e-frac think the momentum have the reason no change. shutdown the that, saw is going to to

a it's of Environmental, forward. going et cost think, a cases. So cetera. better Again, better in And some noise it's I continue cases, alternative, a emissions do in lot it emissions, both. profile, will

So we to change, think that have reason no Bill.

it to saw that the a positive. it's the you more like Given a to getting QX we specific, we in few oilfield do lot activity of feels for But have ready preparing than anything gear were customers. QX. don't e-frac with and are And really I trends up, already the side, on which

Bill Dezellem

up. Thank Great. back and I'll re-queue step Jim. you,

Jim Reddinger

Bill. Thanks,

Operator

Tieton [Operator Bill to back ahead. Please Instructions] with move Capital. will go We

Bill Dezellem

two Great. Thank anymore. abide you. question I the rule by won't

Jim Reddinger

No problem.

Bill Dezellem

But interaction, like, and cetera? there Are seeing, give you Would course It in south, what over behaviors, what utilization today, us you trend through trends, you terms discuss been characteristics the to started you've prospect et -- go of the out March? can really of line any about activities? from things in business in perspective, March bottomed of just sounds what that May. a in since with general, kind and

Jim Reddinger

Well.

the on of we've significant of activity we've the this seen through we've of we've a got about and But encouraging sector. come some as these But the have should the Mexico. probably them customers, been industrial some I to is some are we've those been say the lot been now, activity A cases, think, activity But of new comments, witnessed. most one interactions I'm in larger downturns talked about some happy we well. we've through We've lot to all significant is new few downturns negative what worked got sector through, or marine oilfield on anyone. in positive aerospace some all segments. impact I one sector, able out sector significant business this this my customer impact and as with an during more things downturns. This and including customers importantly, as in what now I'd had I new in able as to has with of the for had is, one the find now we've of say never pretty exposure growth Bill continue in as use a that been

markets, new those really the out I seeing which this downturn we're to on So, during it. think opportunity, coming focus of

As and business. rebounds stronger just footing for will put a oilfield having us base of on activity diversified larger more

to So that downturns, perspective, really places. able an and it's pivot from we've to other consistent use impetus as it grow where in with the new been

Bill Dezellem

lack of the ongoing customers I'm and you a own at pretty conversations trying early much from Did continue of were to even throughout, lock as figure with sense on? work May whole home the April, you, thinking situation? out they all, March into to discussions their did And maybe down. interest have Or

Jim Reddinger

dialogue. from that was consistent didn't people to beat, work customer having really impressed We -- most were home. in miss with I -- going a

I in April, as started. think accelerated, it the actually lockdown early first probably even

but saying the cognizant that, I we're customers not and I'm everywhere discussions very interactions their of with active. were activity increased pretty employees think order the activity keeping certainly up.

we surprised, So some their lost keep sectors oilfield touch really to still I've haven't that Obviously the own in dealing we've been about were that like with moving. pleasantly with But able talked anyone. we issues. been

Bill Dezellem

a you That's your let's talk great. that referenced Thank in And you. then, wins press the about release. few of

they what all, aerospace that able to And in customer, you is doing they're traditional it or sense? why what would just of that First to, do more able aren't U.S. they I'd talk call weren't the LNG. need a

Jim Reddinger

particular. about interesting -- Bill, But for with of the an some as being side. in new under it point new aerospace can pretty talk applications best the used like restrictions more. propellant I customers strict going say is, is it's would the NDA activities some in say We're interesting these Yeah. on where as a some LNG some to at I'd fuel,

Bill Dezellem

become bunkering, in hear engineering is will meaningful? begin Thank you. of did you will that The marine significant that say we some All January? Or the when volumes revenues right.

Jim Reddinger

We're starting engineering going the we're to start -- now. work

year volumes, lot in there's so, quarter XXXX. or significant now. be actual a of first operational either And process, work begin will safety engineering, And we then bunkering quarter events anticipate fourth done procedure, this late the to of

a at contract of objectives XXXX. one in was bunkering secure marine One company our as to least

we're able with line. the the part we're to located this And be development of we're the finish West the Coast. going one of across one shippers of Trans-Pacific the major So able really now be to this to get -- happy project on

So testing we're their excited get and pilot about it. enthusiastic I to programs they're underway. know,

next there should volumes more that bunkering occur. So year starting activity significant of be

Bill Dezellem

And, raise interest is with customers? not win, the Jim, other benefit? it a this Or accelerate given there or does spillover any

Jim Reddinger

of setup Well, I the marine will. processes into and be obviously future going safety efficient we for equipment of procedures, we're to to volumes and the fuel biggest to win it in expertise able yes, hope bunker the again, develop, operations this. vessels. financial to mean, procedures there's the But is large the for benefits the and us

from probably to both happening. to an we can perspective, the with along from grow a perspective, and experience starts importantly more more bunkering goal was, marine, So more revenue get start as sector but activity into so our

Bill Dezellem

your is fair a it that marine activity, discussion? there And amount sense additional is bunkering, under of bunkering

Jim Reddinger

everything ships, are car LNG-ready. Yes. coming -- the of both and feel, service in a Pacific, converted number vessels can lot container pretty significant. I and A or Atlantic carriers we it the of more the into see looks the different either being mean,

past are by the for XXXX As the standards shippers. we've about that driven largely required talked in IMO globally

momentum really that seeing up. we're So pick

Bill Dezellem

ships, fit that cruise in category And also? they do

Jim Reddinger

aspect from news of Fort cruise Yes to converted They up that there's But in more northern ships the and of Coast cruise black of on Florida's some where soot And they have happening being number you along the one Miami, don't things leaders. the just about get East that from, a can all Lauderdale, will ports marketing there. being be are a and guess, ships experience, of lot I from of customer the social benefit read and the benefit also cleaner. a lot the get responsibility boats. smoke you those of

Bill Dezellem

it they're are makes as of one cut they of unique moving try these have complete they're that their you those or own ships, not finding situations sense. CapEx, because And spite now, forward And that? they hold on where the that operating put cruise to just plans in

Jim Reddinger

have made them in don't have I those capital the of me, commitment. most of but I know them schedule already or front many of

commitments. sailed. ship that, already to They've pun think So intentionally, the I use that has already those made

So that's going to happen.

Bill Dezellem

Or you. may would continue I stepped out? Thank And more prefer you questions? Great. with I

Jim Reddinger

Operator, is we anyone there Or queue? else in should the keep going with Bill?

Operator

Bill. with going keep can You

Jim Reddinger

Thanks.

Bill Dezellem

Great. Thank you.

contract you if then want please? my let's generation about please shift Would we to size about you in customer Would as also discuss I bit So is remote I could it of think it don't image doing? think mind, a I Mexico. have it? it. the what an in is that please I to talk And power mischaracterize that but the

Jim Reddinger

in now serving we're the is supplementing customer power are largest grid. The that power Mexico generators LNG using Yes. to

conditioning air also of supplement general it's Others grid. to for just the cooling, for -- that summer of power purposes. some Some but

LNG the it store the the U.S. site happening. take from there across generators. right bring truckloads into revaporized a three it and they're We where five bring down the we day? anywhere to we border, it we then so, it into the generation power We And And from now, burning is

Bill Dezellem

largest your a addition win? new a that is do have to customer? win in new Or you And

Jim Reddinger

day. been other we've mining be new truckloads then, And So, approximately win. now that that LNG combined got contract half customer purposes. to that with, greenhouse from that -- to could five is right We've today. using under that's have it a And awarded discussions for a is a four verbally a that's load anywhere and were contracts the it largest secured load two heating a a also

together all volumes pretty So new these are significant Mexico. into

Bill Dezellem

or mining that's four No, to combined very that the helpful. five customers, -- would the And two loads, be that's

Jim Reddinger

be two would be three combined. That They're That combined. day. approximately each a would to loads

Bill Dezellem

verbal time practically shipped? before now commitment into that's frame being Well, what's the those, for volumes fantastic. each the you have that of turn And would

Jim Reddinger

next is to four anticipation, eight the eight weeks weeks. Within my

Bill Dezellem

the a be day three couple of You believe, the to of two in rate you shipping loads next could at product months?

Jim Reddinger

the started for We've to sites setup. But equipment There's yes the imminent? this we some of Yes. that customers' at some happen. believe that do arrive needs to it's technical

Bill Dezellem

Okay.

these are So now? some that working are to then to to and These the in the actually proposed mines are addition would -- take the mines site time this mining that actual company of the being actually do for are right prepare mining.

Jim Reddinger

power be got other LNG. heat and working generation, already they'd on now that they're needs process to fuels running that other converting Yes, they've they're

Bill Dezellem

the I we on that you you're light Mexico Chronicle congratulations -- or in here? been take then see to line. the did of that significant almost have How in rail. that via believe was important wins particularly And LNG these Houston No approval getting that all is granted across finish into it discussing

Jim Reddinger

LNG Yes. And there of significant just mean, the but help mode to now I efficiency LNG by to anticipate we in ability need rail it's will that few obviously all receiving do are a including approved our investment do to Stabilis transportation move happen of authorities But specifically for development. another wasn't only clarify, think general. railcars rail a the Right were and come. terminals happen. things it going capital We make -- can in loading LNG. and that transportation U.S. to to the it transportation

a it's take it's think become to practical very alternative. time a to a we but positive little development, going So really

Bill Dezellem

Great.

to about or plants for site appreciated. Mexico? you And permitting your plant and That's in talk Okay. cetera us your would then et preparation

Jim Reddinger

is enacting still with still the in and just the given get government to be stalled. We're agencies the a waiting are Mexico. of process for that work enacted We're agencies continues to some they when down with the Yes. online. working there the And working with is queue back -- -- bit in that and shutdowns

So stalled close I with that on been don't downs. COVID other that tell than now right out have any you guidance specific it's to

Bill Dezellem

And are your will be will yet Mexico margins than what bit will do about new Jim, us thinking to wins talking so even fair have running? cases would little distance up up be for that some that keep and just new until would volumes these because a further and supply to you it into aren't and lower trucking trucking customers and will about you and be and you when be trucking just the running in today? Or continue you'll down the these product all you that they think plants we want be serving otherwise plants

Jim Reddinger

our new strategy grow and in them. growth sales plants leverage Yes, been general capabilities markets put our our has to before we to expertise distribution into

volumes that plants. markets is creating think those of sustain we about Mexico building So to in enough are how certain for regions a plant

that in on area. So Bill built sense sources. make factors plan cases, other where variety third-party in we've gas power about may cases, In some a putting continue from of in in ship customers availability, other to got up will based a we

don't the project-by-project that -- basis not them that. from on I sales new or being tell sources. I farther profitable you in can't I can't shipped on priced giving stand-alone So a like margin away we're profitable to be anything really have been attractively based

in plants some certainly So to of area if we that transportation put would our reduce the side costs margins. improve on and the were this

Bill Dezellem

you. Thank Great.

QX point it place the may in that even Mexico? and what new think volumes in appears come oil grow in bottom have QX in not of wins as been as back U.S. the and probably though to this both about the because from if describing, does if so you that and And forward we finally, may field you've continue holds in it

Jim Reddinger

the market we're Yes we're I feel which absent we like -- feel that. for now right any in on yes can't pace we predict, like changes

Bill Dezellem

for you appreciate all do questions. taking Thank it. I Excellent. my

Jim Reddinger

set Appreciate all you Bill. Thanks. been, Operator, with are we questions?

Operator

no closing other have questions this showing pending any at Do We're time. you comments?

Jim Reddinger

next quarter. much. And we to look No. Thanks talk time next being on. improving everybody I results appreciate having forward we

Operator

thank gentlemen, event. for and concludes Ladies participation. This you today's your

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

Stabilis Solutions (SLNG) 9 Aug 202020 Q1 Earnings call transcript