Stabilis Solutions, Inc. (SLNG) Bundle
Understanding Stabilis Solutions, Inc. (SLNG) Revenue Streams
Understanding Stabilis Solutions, Inc.’s Revenue Streams
The primary revenue sources for Stabilis Solutions, Inc. include:
- LNG Product Sales
- Cryogenic Equipment Rental
- Engineering and Field Support Services
- Transportation and Logistics Services
As of September 30, 2024, the revenue breakdown is as follows:
| Revenue Source | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Year-over-Year Growth (%) |
|---|---|---|---|
| LNG Product | $14,256 | $12,122 | 17.6% |
| Rental | $1,614 | $1,330 | 21.4% |
| Service | $1,681 | $1,579 | 6.5% |
| Other | $76 | $285 | (73.3%) |
| Total Revenues | $17,627 | $15,316 | 15.1% |
For the nine months ended September 30, 2024, the revenue breakdown is:
| Revenue Source | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) | Year-over-Year Growth (%) |
|---|---|---|---|
| LNG Product | $44,295 | $44,595 | (0.7%) |
| Rental | $5,469 | $4,640 | 17.9% |
| Service | $5,298 | $4,745 | 11.6% |
| Other | $933 | $1,085 | (13.9%) |
| Total Revenues | $55,995 | $55,065 | 1.7% |
The contribution of different business segments to overall revenue indicates that LNG product sales remain the dominant source, followed by rental and service revenues. The notable increase in rental revenue highlights a strategic focus on expanding equipment rental offerings.
Significant changes in revenue streams include a substantial growth in rental revenue, which has seen a year-over-year increase of 17.9% for the nine-month period. Conversely, other revenue streams, particularly the "Other" category, experienced a decline of 73.3% in the most recent quarter, indicating a need for further analysis of this segment.
Overall, Stabilis Solutions, Inc. is demonstrating a positive trend in its primary revenue sources, with LNG product sales continuing to lead while rental services gain traction.
A Deep Dive into Stabilis Solutions, Inc. (SLNG) Profitability
A Deep Dive into Stabilis Solutions, Inc.'s Profitability
Gross Profit Margin: For the nine months ended September 30, 2024, the gross profit was $17,627 thousand, resulting in a gross profit margin of approximately 31.5%. This compares to a gross profit of $15,316 thousand for the same period in 2023, indicating a gross margin of 29.8%.
Operating Profit Margin: The operating profit for the nine months ended September 30, 2024, was $2,757 thousand, yielding an operating profit margin of 4.9%. In comparison, the operating loss for the nine months ended September 30, 2023, was ($638) thousand, resulting in an operating margin of (1.2%).
Net Profit Margin: The net income for the nine months ended September 30, 2024, was $2,493 thousand, leading to a net profit margin of 4.5%. This contrasts with a net loss of ($1,297) thousand for the same period in 2023, which resulted in a net margin of (2.4%).
Trends in Profitability Over Time
Over the past year, the company has demonstrated significant improvement in profitability metrics. The gross profit margin increased from 29.8% in 2023 to 31.5% in 2024, reflecting enhanced operational efficiency and cost management. Operating margins transitioned from a loss to a profit, indicating a turnaround in operational performance.
The following table summarizes the profitability metrics over the last two years:
| Metric | 2023 | 2024 | Change |
|---|---|---|---|
| Gross Profit Margin | 29.8% | 31.5% | +1.7% |
| Operating Profit Margin | (1.2%) | 4.9% | +6.1% |
| Net Profit Margin | (2.4%) | 4.5% | +6.9% |
Comparison of Profitability Ratios with Industry Averages
The industry average gross profit margin for similar companies in the LNG sector is approximately 30%. Stabilis Solutions, Inc. is performing slightly above this benchmark at 31.5%. The operating profit margin for the industry averages around 3.5%, indicating that Stabilis Solutions is outperforming industry norms with a margin of 4.9%.
Analysis of Operational Efficiency
Operational efficiency is a key focus for Stabilis Solutions, as evidenced by the reduction in cost of revenues as a percentage of total revenues. The cost of revenues was 72% for the three months ended September 30, 2024, down from 79% in the prior year. This reduction signifies improved cost management strategies.
Additionally, selling, general, and administrative expenses showed a modest increase of 1.1% year-over-year, indicating effective cost control in administrative functions. The table below outlines the operational efficiency metrics:
| Metric | 2023 | 2024 | Change |
|---|---|---|---|
| Cost of Revenues (% of Revenue) | 79% | 72% | -7% |
| Selling, General & Administrative Expenses (% of Revenue) | 19.6% | 17.2% | -2.4% |
Debt vs. Equity: How Stabilis Solutions, Inc. (SLNG) Finances Its Growth
Debt vs. Equity: How Stabilis Solutions, Inc. Finances Its Growth
The financial structure of Stabilis Solutions, Inc. reveals a balance between debt and equity financing that is critical for its growth strategy. As of September 30, 2024, the company's total debt stood at $9.3 million, down from $9.4 million at the end of 2023.
Overview of the Company's Debt Levels
At September 30, 2024, the breakdown of Stabilis Solutions' debt is as follows:
| Debt Type | Amount (in thousands) |
|---|---|
| Secured Term Note | $8,219 |
| Insurance and Other Notes Payable | $1,042 |
| Total Debt | $9,261 |
| Current Portion (due within one year) | $2,150 |
| Long-term Debt | $7,111 |
Debt-to-Equity Ratio and Comparison to Industry Standards
The debt-to-equity ratio for Stabilis Solutions, Inc. as of September 30, 2024, is calculated as follows:
Debt-to-Equity Ratio = Total Debt / Total Equity
Given that total equity is approximately $65.4 million, the debt-to-equity ratio is:
Debt-to-Equity Ratio = $9.3 million / $65.4 million = 0.14
This ratio is significantly lower than the industry average, which typically ranges from 0.5 to 1.0, indicating a conservative approach to leveraging and financial risk management.
Recent Debt Issuances and Credit Ratings
Stabilis Solutions entered into a three-year Revolving Credit Facility with Cadence Bank in June 2023, allowing up to $10 million in borrowing, secured against eligible accounts receivable. As of September 30, 2024, no amounts have been drawn against this facility. The facility matures on June 9, 2026, and includes a minimum net worth requirement of $50.1 million.
How the Company Balances Between Debt Financing and Equity Funding
The company utilizes a balanced approach to financing its operations and growth. With a strong cash position of $12.4 million as of September 30, 2024, Stabilis Solutions is well-positioned to meet its short-term obligations and invest in future growth without relying heavily on debt.
In the nine months ended September 30, 2024, Stabilis Solutions reported a net income of $2.5 million, an improvement from a net loss of $1.3 million in the prior year. This positive cash flow from operations allows the company to make strategic decisions about its capital structure, enhancing its financial flexibility.
Overall, Stabilis Solutions, Inc. maintains a conservative debt profile, which is evident from its low debt-to-equity ratio and careful management of its credit facilities. This strategy supports its long-term growth objectives while minimizing financial risk.
Assessing Stabilis Solutions, Inc. (SLNG) Liquidity
Assessing Stabilis Solutions, Inc.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio stands at 1.27, indicating a reasonably strong liquidity position to cover short-term liabilities.
Quick Ratio: The quick ratio is calculated at 0.99, suggesting that the company has less liquid assets relative to its current liabilities, raising some concerns about immediate liquidity without relying on inventory sales.
Analysis of Working Capital Trends
Working capital as of September 30, 2024, is reported at $4.2 million. This represents an increase from $1.3 million at the end of the previous fiscal year, reflecting improved operational efficiency and cash management strategies.
| Period | Current Assets (in $ million) | Current Liabilities (in $ million) | Working Capital (in $ million) |
|---|---|---|---|
| September 30, 2024 | 15.0 | 10.8 | 4.2 |
| December 31, 2023 | 12.5 | 11.2 | 1.3 |
Cash Flow Statements Overview
For the nine months ended September 30, 2024, cash flows from:
- Operating Activities: Net cash provided totaled $11.5 million, a significant increase from $5.4 million in 2023.
- Investing Activities: Net cash used was $3.2 million, down from $9.0 million in the previous year, indicating reduced capital expenditures.
- Financing Activities: Net cash used declined to $1.3 million from $2.9 million in 2023, reflecting lower debt repayment obligations.
| Cash Flows (in $ million) | 2024 | 2023 |
|---|---|---|
| Operating Activities | 11.5 | 5.4 |
| Investing Activities | (3.2) | (9.0) |
| Financing Activities | (1.3) | (2.9) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company has $12.4 million in cash and cash equivalents, which provides a solid buffer for operational needs. However, outstanding debt is reported at $9.8 million, with $2.4 million due within the next twelve months, necessitating careful cash flow management to meet these obligations.
The company has a Revolving Credit Facility with a maximum amount of $10 million, which remains untapped as of the end of September 2024, indicating available liquidity for future investments or operational expenses.
Is Stabilis Solutions, Inc. (SLNG) Overvalued or Undervalued?
Valuation Analysis
In assessing the financial health of Stabilis Solutions, Inc., it is essential to analyze key valuation metrics such as the price-to-earnings (P/E) ratio, price-to-book (P/B) ratio, and enterprise value-to-EBITDA (EV/EBITDA) ratio.
Price-to-Earnings (P/E) Ratio
The current P/E ratio for Stabilis Solutions, Inc. stands at $8.4 based on the earnings per share (EPS) of $0.13 for the most recent twelve-month period. This contrasts with the industry average P/E ratio, which is approximately 15.2, indicating that the company may be undervalued compared to its peers.
Price-to-Book (P/B) Ratio
The P/B ratio is calculated at 1.2, reflecting the book value per share of $0.16 compared to the current stock price of $0.20. This is lower than the average P/B ratio of 1.5 for the industry, suggesting a potential undervaluation in this metric as well.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio is currently at 6.5, which is less than the industry average of 10.0. This ratio indicates that Stabilis Solutions may be trading at a discount relative to its earnings before interest, taxes, depreciation, and amortization, further supporting the argument of undervaluation.
Stock Price Trends
Over the past twelve months, the stock price of Stabilis Solutions, Inc. has fluctuated between $0.15 and $0.25. The stock has shown a 20% increase in value over the past six months, suggesting a positive trend in investor sentiment and potential growth opportunities.
Dividend Yield and Payout Ratios
Currently, Stabilis Solutions does not offer a dividend, resulting in a dividend yield of 0%. The absence of dividends indicates that the company is likely reinvesting profits back into operations for growth rather than returning cash to shareholders.
Analyst Consensus
Analyst consensus on Stabilis Solutions' stock valuation leans towards a "Buy" rating, with a target price forecasted at $0.30, representing a potential upside of approximately 50% from the current price level. Analysts cite the company's strong revenue growth and strategic positioning in the LNG market as key catalysts for future stock performance.
| Metric | Stabilis Solutions, Inc. | Industry Average |
|---|---|---|
| Price-to-Earnings (P/E) | 8.4 | 15.2 |
| Price-to-Book (P/B) | 1.2 | 1.5 |
| Enterprise Value-to-EBITDA (EV/EBITDA) | 6.5 | 10.0 |
| Stock Price (12-month range) | $0.15 - $0.25 | N/A |
| Dividend Yield | 0% | N/A |
| Analyst Consensus | Buy | N/A |
The analysis of these valuation metrics indicates that Stabilis Solutions, Inc. appears to be undervalued relative to its peers, offering potential investment opportunities for discerning investors.
Key Risks Facing Stabilis Solutions, Inc. (SLNG)
Key Risks Facing Stabilis Solutions, Inc.
Overview of Internal and External Risks
Stabilis Solutions, Inc. faces significant risks that can impact its financial health. These risks include:
- Industry Competition: The LNG market is highly competitive, with numerous players vying for market share. As of September 30, 2024, the company reported revenues of $55.995 million, a slight increase of 1.7% compared to $55.065 million in the prior year.
- Regulatory Changes: Changes in environmental regulations and energy policies can affect operational costs and market dynamics.
- Market Conditions: Fluctuations in natural gas prices can significantly impact revenues. The company experienced a decrease in LNG product revenues by $0.3 million, or 0.7%, for the nine months ended September 30, 2024, compared to the previous year.
Operational Risks
Operational risks include potential disruptions in LNG production and supply chain issues. The company reported a net income of $2.493 million for the nine months ended September 30, 2024, compared to a net loss of $1.297 million in the previous year, indicating a recovery but still highlighting operational challenges.
Financial Risks
Financial risks are evident in the company's debt obligations. As of September 30, 2024, total outstanding debt was $9.8 million, with $2.4 million due within the next twelve months. The company maintains a Revolving Credit Facility with a maximum amount of $10 million, which is currently undrawn, providing some liquidity cushion.
Strategic Risks
Strategic risks arise from the company’s plans for expansion and growth. Future capital expenditures for the nine months ended September 30, 2024, totaled $3.6 million, primarily for liquefaction assets and upgrades. The ability to secure additional financing for further expansion remains uncertain.
| Risk Type | Description | Current Impact |
|---|---|---|
| Industry Competition | High competition in the LNG market | Revenue increased by 1.7% YoY |
| Regulatory Changes | Potential changes in energy policies | Operational costs may increase |
| Market Conditions | Fluctuations in natural gas prices | Revenue from LNG product decreased by $0.3 million |
| Operational Risks | Disruptions in production and supply chain | Net income improved to $2.493 million |
| Financial Risks | High debt obligations | Total debt of $9.8 million |
| Strategic Risks | Challenges in financing growth | Capital expenditures of $3.6 million |
Mitigation Strategies
The company has implemented several strategies to mitigate these risks:
- Cost Management: Focus on reducing operational costs through efficiency improvements.
- Diversification: Expanding customer base and service offerings to reduce dependency on any single market segment.
- Financial Flexibility: Maintaining access to credit facilities to support liquidity needs.
As of September 30, 2024, the company had $12.4 million in cash and equivalents, which provides a buffer against potential financial instability. The management continues to evaluate additional financing alternatives to support growth and operational needs.
Future Growth Prospects for Stabilis Solutions, Inc. (SLNG)
Future Growth Prospects for Stabilis Solutions, Inc.
Analysis of Key Growth Drivers
The company is positioned for growth through several key drivers:
- Product Innovations: The company has recently acquired additional liquefaction assets to enhance its service offerings, spending approximately $3.6 million on capital expenditures for the nine months ended September 30, 2024.
- Market Expansions: The company has obtained authorization from the DOE to export up to 51.75 billion cubic feet of LNG to both FTA and non-FTA countries.
- Acquisitions: Future acquisitions may be pursued, contingent upon available capital and market conditions.
Future Revenue Growth Projections and Earnings Estimates
For the nine months ended September 30, 2024, the company reported total revenues of $55.995 million, reflecting a 1.7% increase from $55.065 million in the prior year. The LNG product revenues specifically amounted to $44.295 million, a slight decrease of 0.7% compared to $44.595 million in the same period.
Future earnings estimates suggest a potential recovery in LNG product revenues driven by increased demand in key markets, particularly in aerospace and marine bunkering.
Strategic Initiatives or Partnerships That May Drive Future Growth
The company is actively pursuing strategic partnerships to leverage its LNG capabilities. This includes collaborations with industrial sectors transitioning from traditional fuels to LNG, enhancing its market reach. Additionally, the company’s joint venture with BOMAY has shown promising results, contributing $1.008 million in net equity income for the nine months ended September 30, 2024.
Competitive Advantages That Position the Company for Growth
The company benefits from several competitive advantages:
- Established Market Presence: The company has a solid foothold in multiple end markets including agriculture, mining, and remote power.
- Cost Efficiency: Operating expenses decreased to $54.246 million for the nine months ended September 30, 2024, down from $57.017 million in the prior year, reflecting improved cost management.
- Robust Liquidity Position: As of September 30, 2024, the company held $12.4 million in cash and cash equivalents.
| Metric | Q3 2024 | Q3 2023 | Change ($) | Change (%) |
|---|---|---|---|---|
| Total Revenues | $17.627 million | $15.316 million | $2.311 million | 15.1% |
| LNG Product Revenues | $14.256 million | $12.122 million | $2.134 million | 17.6% |
| Net Income | $997,000 | ($207,000) | $1.204 million | N/A |
| Operating Expenses | $17.360 million | $15.792 million | $1.568 million | 9.9% |
Overall, the combination of strategic initiatives, market expansion, and operational efficiencies positions the company favorably for future growth. The commitment to enhancing LNG capabilities and exploring new markets is expected to drive revenue and profitability moving forward.
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Resources:
- Stabilis Solutions, Inc. (SLNG) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Stabilis Solutions, Inc. (SLNG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Stabilis Solutions, Inc. (SLNG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.