slng20240331

slng20240331_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended March 31, 2024

☐	TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number. 001-40364

STABILIS SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

Florida

59-3410234

(State or other jurisdiction

of incorporation or organization)

(I.R.S. Employer

Identification No.)

11750 Katy Freeway, Suite 900, Houston, TX 77079

(Address of principal executive offices, including zip code)

(832) 456-6500

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, $.001 par value	SLNG	The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§. 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Act:

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of May 7, 2024, there were 18,585,014 outstanding shares of our common stock, par value $.001 per share.

		Page
Part I. Financial Information
Item 1.	Financial Statements (Unaudited)
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Operations	5
	Condensed Consolidated Statements of Comprehensive Income (Loss)	6
	Condensed Consolidated Statements of Stockholders’ Equity	7
	Condensed Consolidated Statements of Cash Flows	8
	Notes to Condensed Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 4.	Controls and Procedures	20
Part II. Other Information
Item 1.	Legal Proceedings	20
Item 1A.	Risk Factors	20
Item 5.	Other Information	20
Item 6.	Exhibits	21
Signatures		22

	*March 31,*			*December 31,*
	*2024*			*2023*
*Assets*
Current assets:
Cash and cash equivalents	$	8,286		$	5,374
Accounts receivable, net		5,620			7,752
Inventories, net		137			169
Prepaid expenses and other current assets		1,442			1,677
Total current assets		15,485			14,972
Property, plant and equipment:
Cost		111,435			110,646
Less accumulated depreciation		(62,819	)		(61,167	)
Property, plant and equipment, net		48,616			49,479
Goodwill		4,314			4,314
Investments in foreign joint ventures		11,780			12,009
Right-of-use assets and other noncurrent assets		452			525
Total assets	$	80,647		$	81,299
*Liabilities and Stockholders’ Equity*
Current liabilities:
Accounts payable	$	5,811		$	5,707
Accrued liabilities		2,432			4,166
Current portion of long-term notes payable		1,657			1,682
Current portion of finance and operating lease obligations		112			164
Total current liabilities		10,012			11,719
Long-term notes payable, net of current portion and debt issuance costs		7,446			7,747
Long-term portion of finance and operating lease obligations		—			21
Total liabilities		17,458			19,487
Commitments and contingencies (Note 9)
Stockholders’ Equity:
Preferred stock; $0.001 par value, 1,000,000 shares authorized, no shares issued and outstanding at March 31, 2024 and December 31, 2023		—			—
Common stock; $0.001 par value, 37,500,000 shares authorized, 18,585,014 and 18,573,391 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively		19			19
Additional paid-in capital		102,431			102,057
Accumulated other comprehensive loss		(484	)		(18	)
Accumulated deficit		(38,777	)		(40,246	)
Total stockholders’ equity		63,189			61,812
Total liabilities and stockholders’ equity	$	80,647		$	81,299

	*Three Months Ended*
	*March 31,*
	*2024*			*2023*
Revenues:
Revenues	$	19,770		$	26,842
Operating expenses:
Cost of revenues		13,514			20,270
Change in unrealized (gain) loss on natural gas derivatives		(252	)		169
Selling, general and administrative expenses		3,456			3,379
Gain from disposal of fixed assets		(127	)		—
Depreciation expense		1,800			2,011
Total operating expenses		18,391			25,829
Income from operations before equity income		1,379			1,013
Net equity income from foreign joint venture operations:
Income from equity investment in foreign joint venture		247			393
Foreign joint venture operating related expenses		(50	)		(48	)
Net equity income from foreign joint venture operations		197			345
Income from operations		1,576			1,358
Other income (expense):
Interest income (expense), net		(4	)		(150	)
Interest (expense), net - related parties		—			(32	)
Other (expense), net		(21	)		(84	)
Total other income (expense)		(25	)		(266	)
Net income before income tax expense		1,551			1,092
Income tax expense		82			8
Net Income	$	1,469		$	1,084

Net income per common share (Note 11):
Basic net income per common share	$	0.08		$	0.06
Diluted net income per common share	$	0.08		$	0.06

							*Accumulated*
							*Other*
	*Common Stock*				*Additional*		*Comprehensive*		*Accumulated*
	*Shares*		*Amount*		*Paid-in Capital*		*Income*		*Deficit*			*Total*
Balance at December 31, 2022		18,420,067	$	19	$	100,137	$	82	$	(40,371	)	$	59,867
Common stock issued from vesting of stock-based awards		13,587		—		—		—		—			—
Stock-based compensation		—		—		589		—		—			589
Net income		—		—		—		—		1,084			1,084
Other comprehensive income, net of tax		—		—		—		187		—			187
Balance at March 31, 2023		18,433,654	$	19	$	100,726	$	269	$	(39,287	)	$	61,727

	Initial Investment at Merger ⁽¹⁾, ⁽²⁾		*Undistributed Earnings*		*Cumulative Foreign Exchange Translation Adj*			*Investment in BOMAY*
Balance at December 31, 2023	$	9,333	$	2,967	$	(291	)	$	12,009
Equity in earnings		—		247		—			247
Less: dividend distributions		—		—		—			—
Foreign currency translation gain (loss)		—		—		(476	)		(476	)
Balance at March 31, 2024	$	9,333	$	3,214	$	(767	)	$	11,780

	*Three Months Ended*
	*March 31,*
Supplemental Disclosure of Cash Flow Information:	*2024*		*2023*
Interest paid	$	157	$	182
Income taxes paid		—		—
Significant non-cash investing and financing activities:
Acquisition of fixed assets included within accounts payable and accrued expenses		182		3,000

	Three Months Ended
	March 31,
	2024			2023			$ Change			% Change
Revenues:
LNG Product	$	15,413		$	21,905			(6,492	)		(29.6	)%
Increase / (decrease) in gallons delivered		1,103									n/a
Rental		2,173			2,247			(74	)		(3.3	)
Service		1,924			2,066			(142	)		(6.9	)
Other		260			624			(364	)		(58.3	)
Total revenues		19,770			26,842			(7,072	)		(26.3	)
Operating expenses:
Cost of revenues		13,514			20,270			(6,756	)		(33.3	)
Change in unrealized (gain) loss on natural gas derivatives		(252	)		169			(421	)		n/a
Selling, general and administrative expenses		3,456			3,379			77			2.3
Gain from disposal of fixed assets		(127	)		—			(127	)		n/a
Depreciation expense		1,800			2,011			(211	)		(10.5	)
Total operating expenses		18,391			25,829			(7,438	)		(28.8	)
Income from operations before equity income		1,379			1,013			366			36.1
Net equity income from foreign joint venture operations		197			345			(148	)		(42.9	)
Income from operations		1,576			1,358			218			16.1
Other income (expense):
Interest income (expense), net		(4	)		(150	)		146			(97.3	)
Interest (expense), net - related parties		—			(32	)		32			(100.0	)
Other (expense), net		(21	)		(84	)		63			(75.0	)
Total other income (expense)		(25	)		(266	)		241			(90.6	)
Net income before income tax expense		1,551			1,092			459			42.0
Income tax expense		82			8			74			n/a
Net Income		1,469			1,084			385			35.5

	Three Months Ended March 31,
	2024			2023
Net cash provided by (used in):
Operating activities	$	3,929		$	93
Investing activities		(666	)		(3,727	)
Financing activities		(355	)		(961	)
Effect of exchange rate changes on cash		4			5
Net increase (decrease) in cash and cash equivalents		2,912			(4,590	)
Cash and cash equivalents, beginning of period		5,374			11,451
Cash and cash equivalents, end of period	$	8,286		$	6,861

Exhibit No.		Exhibit Description

3.1		Amended and Restated Articles of Incorporation of the Registrant (Incorporated by Reference to Exhibit 3.1 to Registrant’s Current Report on Form 8-K filed October 15, 2020)

3.2		Amended and Restated Bylaws of the Registrant (Incorporated by Reference to Exhibit 3.2 to Registrant’s Current Report on Form 8-K filed September 18, 2020)

4.1		Registration Rights Agreement dated July 26, 2019, by and among Registrant, LNG Investment Company, LLC, and AEGIS NG LLC (Incorporated by Reference to Exhibit 10.1 to Registrant’s Current Report on Form 8-K filed August 1, 2019)

4.2		Registration Rights Agreement dated as of August 20, 2019, by and among Registrant and the Investors named therein (Incorporated by Reference to Exhibit 4.9 to Registrant's Registration Statement on Form S-1 filed September 11, 2019)

4.3		Registration Rights Agreement, dated June 1, 2021, among TGB Equipment Leasing, LLC and Stabilis (Incorporated by reference to Exhibit 10.5 to Registrant's Quarterly Report on Form 10-Q filed on August 5, 2021)

4.5		Description of Securities (incorporated by reference to Exhibit 4.5 to Registrant's Annual Report on Form 10-K filed March 7, 2024)

31.1		*Rule 13a-14(a) / 15d-14(a) Certification of Principal Executive Officer.

31.2		*Rule 13a-14(a) / 15d-14(a) Certification of Principal Financial Officer.

32.1		*Section 1350 Certifications of Principal Executive Officer and Principal Financial Officer.

101.INS		*Interactive XBRL Instance Document (XBRL tags are embedded within the Inline XBRL document)

101.SCH		*Inline XBRL Taxonomy Extension Schema Document

101.CAL		*Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.LAB		*Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		*Inline XBRL Taxonomy Extension Presentation Linkbase Document

101.DEF		*Inline XBRL Taxonomy Extension Definition Linkbase Document

104		* Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

Date: May 7, 2024

STABILIS SOLUTIONS, INC.

By:	/s/ Westervelt T. Ballard, Jr.
	Westervelt T. Ballard, Jr.
	President and Chief Executive Officer (Principal Executive Officer)

By:	/s/ Andrew L. Puhala
	Andrew L. Puhala
	Chief Financial Officer (Principal Financial Officer)

	*March 31,*			*December 31,*
	*2024*			*2023*
Liquefaction plants and systems	$	48,642		$	48,523
Real property and buildings		2,066			2,066
Vehicles and tanker trailers and equipment		51,472			49,689
Computer and office equipment		458			458
Construction in progress		8,766			9,879
Leasehold improvements		31			31
		111,435			110,646
Less: accumulated depreciation		(62,819	)		(61,167	)
	$	48,616		$	49,479

	*Three Months Ended*
	*March 31,*
	*2024*		*2023*
Revenue	$	17,239	$	21,214
Gross profit		2,630		2,403
Net income		537		901

	*March 31,*			*December 31,*
	*2024*			*2023*
Original basis difference	$	1,165		$	1,165
Less accumulated accretion		(605	)		(573	)
Net remaining basis difference at end of period	$	560		$	592

SEC Form 10-Q filed by Stabilis Solutions Inc.