STABILIS ENERGY ANNOUNCES SECOND QUARTER 2020 RESULTS Company Sees U.S. Activity Recovering and Mexico Acceleration Beginning in Q3

HOUSTON, TX / ACCESSWIRE / August 5, 2020 / Stabilis Energy, Inc., (“Stabilis” or the “Company”) (OTCQX:SLNG) today reported its financial results for its second quarter ended June 30, 2020.

Sequential Quarter Results

For the second quarter (“current quarter”) Stabilis reported revenues of $5.0 million, a 64% decrease from the quarter ended March 31, 2020 (“preceding quarter”) primarily due to the impact of the COVID-19 crisis, the related shutdown of many businesses, and the resulting decrease in industrial activity. Revenues from Stabilis’ LNG segment decreased by $8.5 million (68%) in the current quarter on a 62% decrease in gallons delivered. The Company delivered 4.6 million LNG gallons to customers in the quarter. Utilization of the George West liquefier declined to 31% in the current quarter versus 74% in the preceding quarter. Power Delivery segment revenues fell by 25% to $1.0 million.

Adjusted earnings before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) was a loss of $0.8 million in the current quarter, a $2.3 million decrease from the preceding quarter. The net loss for the current quarter increased to $3.5 million compared to a net loss of $1.1 million in the preceding quarter.

Calendar Quarter Results

Revenues in the current quarter decreased $6.1 million (55%) compared to the quarter ended June 30, 2019 (“prior year quarter”) as a result of the COVID-19 crisis, partially offset by revenues resulting from the closing of the Company’s business combination with American Electric Technologies (“AETI”) subsequent to the prior year quarter. LNG segment revenues decreased by $7.1 million (64%). Utilization of the George West liquefier was 31% in the current quarter versus 76% in the prior year quarter.

Adjusted EBITDA in the current quarter decreased by $2.5 million and the net loss for the current quarter increased by $2.4 million compared to the prior year quarter.

Impact of COVID-19

The COVID-19 pandemic had a significant impact on activity levels during the second quarter in both the LNG and Power Delivery segments. The LNG segment, which is focused on North America, experienced activity declines and project delays across most of our customer sectors, particularly with upstream oil and gas and industrial customers.

The Company’s Power Delivery segment has its primary operational presence in Brazil, which currently has the second highest number of reported COVID-19 cases behind the United States. Our Brazilian activities were impacted in the second quarter by shutdowns, work restrictions and quarantines at customer sites.

BOMAY, the Company’s joint venture in China, returned to profitability in the second quarter as normal operations resumed.

Outlook and Liquidity

The Company experienced a low point in LNG gallons delivered in May and volumes have increased in each subsequent month since then. Sales activity is improving in multiple sectors, including aerospace, infrastructure, and marine. We have booked several new contracts with U.S. based customers during the quarter, including a contract to provide LNG to a large aerospace customer and a contract to support a major marine bunkering project.

We have signed contracts with several new customers in Mexico, including a greenhouse operator and a provider of remote power generation services. Additionally, we have contracts with several Mexican mining customers in the final stages of negotiation.

We believe that these new customers in the U.S. and Mexico will significantly diversify our end market exposure and, thereby, reduce our reliance on the upstream oil and gas sector and provide a meaningful improvement in current utilization for our George West liquefier.

While we are encouraged by the recent activity increases, contract awards and resurgence in bidding activity in our LNG business, at this time it remains uncertain how quickly we will be able to return to pre-pandemic revenue and EBITDA levels.

In Brazil, our backlog is currently at record levels. The timing of converting the backlog to revenue is dependent on a variety of factors including the Brazilian government’s response to the pandemic and our customers’ pace and timing of activity.

During the second quarter, we received a cash dividend of $1.8 million from our Chinese joint venture and ended the quarter with a cash balance of $7.1 million.

Conference Call

Management will conduct a conference call on Thursday, August 6, 2020 at 11:00 a.m. eastern time (10:00 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/2256/36089 or dial +1 877-407-8133. International callers should dial +1 201-689-8040. A replay of the call will be available until August 13, 2020. Individuals in the United States and Canada who wish to listen to the replay should dial +1 877-481-4010; passcode 36089. International callers should dial +1 919-882-2331; passcode 36089. A replay of the call also will be available on the Stabilis website (www.stabilisenergy.com).

About Stabilis

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

 
  Three Months Ended
June 30,
    Six Months Ended
June 30,
 
 
  2020     2019     2020     2019  
Revenue
                       
LNG product
  2,884     8,699     12,015     18,953  
Rental, service and other
    2,119       2,396       6,826       5,117  
Total revenues
    5,003       11,095       18,841       24,070  
Operating expenses:
                               
Cost of LNG product
    2,551       5,616       8,648       13,098  
Cost of rental, service and other
    1,790       1,696       4,708       3,110  
Selling, general and administrative expenses
    2,368       2,211       5,554       4,203  
Depreciation expense
    2,266       2,295       4,536       4,585  
Total operating expenses
    8,975       11,818       23,446       24,996  
Loss from operations before equity income
    (3,972 )     (723 )     (4,605 )     (926 )
Net equity income from foreign joint ventures’ operations:
                               
Income from equity investments in foreign joint ventures
    1,001             887        
Foreign joint ventures’ operations related expenses
    (53 )           (113 )      
Net equity income from foreign joint ventures’ operations
    948             774        
Loss from operations
    (3,024 )     (723 )     (3,831 )     (926 )
Other income (expense):
                               
Interest expense, net
    (15 )     (1 )     (26 )     (4 )
Interest expense, net – related parties
    (242 )     (295 )     (482 )     (604 )
Other income
    (13 )     (19 )     25       (63 )
Gain from disposal of fixed assets
                11        
Total other income (expense)
    (270 )     (315 )     (472 )     (671 )
Loss before income tax expense
    (3,294 )     (1,038 )     (4,303 )     (1,597 )
Income (benefit) tax expense
    169             210        
Net loss
    (3,463 )     (1,038 )     (4,513 )     (1,597 )
Net income attributable to noncontrolling interests
          28             207  
Net loss attributable to Stabilis Energy, Inc.
  (3,463 )   (1,066 )   (4,513 )   (1,804 )
 
                               
Common Stock Data:
                               
Net loss per common share:
                               
Basic and diluted
  (0.21 )   (0.08 )   (0.27 )   (0.14 )
Weighted average number of common shares outstanding:
                               
Basic and diluted
    16,887,194       13,178,750       16,853,438       13,178,750  
 
                               
EBITDA
  (771 )   1,553     741     3,596  
Adjusted EBITDA
    (771 )     1,721       741       4,023  
                                 

Revenues by Segment
(unaudited in thousands)

 
  Three Months Ended
June 30,
    Six Months Ended
June 30,
 
 
  2020     2019     2020     2019  
Revenue
                       
LNG
  4,027     11,095     16,555     24,070  
Power Delivery
    976             2,286        
Total Revenue
  5,003     11,095     18,841     24,070  
                                 

Gallons Delivered
(unaudited in thousands)

 
  Three Months Ended
June 30,
    Six Months Ended
June 30,
 
 
  2020     2019     2020     2019  
Gallons Delivered
                       
George West
    2,726       6,885       9,415       12,122  
3rd Party
    1,871       4,072       7,128       10,253  
Total Gallons Delivered
    4,597       10,957       16,543       22,375  
                                 

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

 
  June 30, 2020     December 31, 2019  
Assets
           
Current assets:
           
Cash and cash equivalents
  7,056     3,979  
Accounts receivable, net
    1,499       5,945  
Inventories, net
    187       209  
Prepaid expenses and other current assets
    2,114       3,583  
Due from related parties
           
Total current assets
    10,856       13,716  
Property, plant and equipment, net
    55,983       60,363  
Right-of-use assets
    841       965  
Goodwill
    4,453       4,453  
Investments in foreign joint ventures
    9,174       10,521  
Other noncurrent assets
    303       308  
Total assets
  81,610     90,326  
Liabilities and Equity
               
Current liabilities:
               
Current portion of long-term notes payable – related parties
  2,140     1,000  
Current portion of finance lease obligation – related parties
    2,394       3,440  
Current portion of operating lease obligations
    315       364  
Short-term notes payable
    307       558  
Accrued liabilities
    3,796       5,018  
Accounts payable
    2,979       4,728  
Total current liabilities
    12,244       15,108  
Long-term notes payable, net of current portion – related parties
    4,937       6,077  
Finance lease obligations, net of current portion – related parties
          648  
Long-term portion of operating lease obligations
    594       650  
Deferred compensation
    87        
Deferred income taxes
    28        
Total liabilities
    18,657       22,483  
Commitments and contingencies
               
Equity:
               
Preferred Stock; $0.001 par value, 1,000,000 shares authorized, 0 shares issued and outstanding at June 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 June 30, 2020 and December 31, 2019, respectively
    17       17  
Additional paid-in capital
    90,906       90,748  
Accumulated other comprehensive loss
    (826 )     (291 )
Accumulated deficit
    (27,144 )     (22,631 )
Total stockholders’ equity
    62,953       67,843  
Total liabilities and equity
  81,610     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
June 30,
    Six Months Ended
June 30,
 
 
  2020     2019     2020     2019  
Net Loss
  (3,463 )   (1,038 )   (4,513 )   (1,597 )
Depreciation
    2,266       2,295       4,536       4,585  
Net Interest Expense
    257       296       508       608  
Income Tax Expense
    169             210        
EBITDA
    (771 )     1,553       741       3,596  
Special Items(1)
          168             427  
Adjusted EBITDA
  (771 )   1,721     741     4,023  
                                 

(1) Special Items include the following:

Transaction and share registration costs related to AETI, Chart, and Diverse transactions of $0.2 million and $0.4 million in the three and six months ended June 30, 2019, respectively.

Investor Contact:

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

SOURCE: Stabilis Energy

View source version on accesswire.com:
https://www.accesswire.com/600485/STABILIS-ENERGY-ANNOUNCES-SECOND-QUARTER-2020-RESULTS-Company-Sees-US-Activity-Recovering-and-Mexico-Acceleration-Beginning-in-Q3

error: Content is protected !!