Stabilis Solutions, Inc. — FY2021 Form 10-K
Reporting period: Fiscal year ended December 31, 2021. This is an annual filing; the supplied filing text does not provide standalone fourth-quarter results. Stabilis provides small-scale LNG production, distribution, equipment rental and services in North America, and power-delivery services in Brazil, with a 40% interest in China’s BOMAY joint venture.
Financial results and liquidity
| Metric | FY2021 | FY2020 | Change |
|---|---|---|---|
| Revenue | $77.2 million | $41.6 million | +85.7% |
| Operating loss | $7.3 million | $5.5 million | Loss increased |
| Net loss | $7.8 million | $6.8 million | Loss increased |
| Net loss per share | $0.45 | $0.40 | Loss per share increased |
| Cash from operations | $4.9 million | $1.3 million | Improved |
| Cash and equivalents, year-end | $2.1 million | $1.8 million | +$0.2 million |
Revenue and margins: LNG product revenue rose 103.7% to $55.7 million, reflecting 23.0 million more gallons delivered and higher natural-gas prices; reported average gas price was $0.32 per gallon versus $0.18. LNG product costs increased faster than product revenue, from 74% to 81% of product revenue, indicating product margin compression. Rental, service and other revenue grew 50.5% to $13.5 million; power-delivery revenue grew 52.0% to $8.0 million. LNG segment operating loss widened to $8.8 million from $6.5 million. Power Delivery reported $1.5 million operating income, including equity income from foreign joint ventures.
Balance sheet and financing: Total assets were $87.3 million and stockholders’ equity was $61.1 million at year-end. Current assets of $15.5 million were slightly below current liabilities of $15.6 million. Reported debt, net of issuance costs, was $12.3 million; the company also had $0.1 million of finance-lease obligations. Of debt and finance-lease obligations, $2.1 million was due in 2022. The AmeriState facility had $2.0 million of remaining availability at year-end. Debt covenants were reported as satisfied.
Investment and cash flow: Investing used $7.5 million, mainly for the Port Allen LNG facility and equipment. The Port Allen purchase closed June 1, 2021, for $5.0 million cash plus approximately $0.1 million in fees and 500,000 shares valued at $3.8 million. Financing provided $3.0 million, primarily from the AmeriState facility. The $1.1 million PPP loan was forgiven in 2021 and recognized as other income.
Material changes and notable items
- Revenue growth reflected higher delivered LNG volumes, natural-gas prices, increased equipment and labor activity, and post-pandemic recovery in Power Delivery.
- Operating expenses rose 74.0%. SG&A increased 60.9% to $17.3 million, including elevated stock-based compensation, executive-transition severance and legal costs, and higher compensation and travel.
- The company recorded a $0.4 million impairment of a right-of-use asset associated with settling its Houston office lease.
- CEO James Reddinger resigned in August 2021; Westervelt Ballard became CEO. The filing reports accelerated vesting and severance-related costs associated with the transition.
- Three customers each accounted for at least approximately 10% of FY2021 revenue; the filing names Chevron, Aggreko and Minera Penmont. The customer-concentration table reports the three customers together at 45.2% of revenue, with one listed at exactly 10.0%.
Outlook, risks and contingencies
Management forecast 2022 capital expenditures of $4.0–$6.0 million, primarily for rolling stock and replacement assets. Management stated that operating cash flows and remaining AmeriState availability were expected to fund the business for 12 months after issuance of the statements, while noting that future financing was not assured. The filing identifies recurring operating losses and negative working capital, alongside customer concentration and reliance on access to capital.
Management cited inflation in fuel, repairs, maintenance, electricity, skilled labor and insurance. The company passes through a significant portion of natural-gas and transportation costs but not all costs; this contributed to margin pressure. Other material risks include LNG supply and commodity-price volatility, operational or weather disruptions, regulation and permitting, competition, foreign-country exposure, and the finite term of the BOMAY joint venture, scheduled to end in 2028 unless extended. The company reported no material off-balance-sheet arrangements and did not expect known legal matters to materially affect results. The independent auditor issued an unqualified opinion and reported no critical audit matters; management assessed internal control over financial reporting as effective, without auditor attestation.
Important facts for investors to verify
- Whether higher LNG volumes and the Port Allen facility improve operating results enough to offset rising product and operating costs.
- Customer concentration and receivable exposure: the concentration table shows the three largest customers at 45.2% of revenue and 47.2% of year-end receivables; reconcile the table’s exactly 10.0% customer entry with the narrative’s “more than 10%” wording.
- Debt and liquidity figures, including the AmeriState borrowing availability, scheduled 2022 obligations, and subsequent amendment of the related-party M/G Finance note on March 9, 2022, which reduced its rate to 6% and deferred payments.
- Execution of the $4.0–$6.0 million 2022 capital plan and the assumptions supporting management’s 12-month liquidity assessment.
- Potential dilution and governance considerations: 73.7% beneficial ownership attributed to Casey Crenshaw, executive equity awards, and related-party transactions.