Stabilis Solutions, Inc.

Now, at this time, I would like to turn the conference over to Mr. Andy Pujala, Chief Financial Officer. Mr. Pujala, please go ahead, sir.

Good morning, and welcome to Stabilis Solutions' third quarter 2025 results conference call. I'm Andy Pujala, Senior Vice President and CFO of Stabilis, and joining me today is our Executive Chairman and Interim President and CEO, Casey Crenshaw. Thank you. We issued a press release after the market closed yesterday detailing our third quarter operational and financial results. This release is publicly available in the investor relations section of our corporate website at Stabilis-Solutions.com. Before we begin, I'd like to remind everyone that today's conference call will contain forward-looking statements within the meaning of the Private Securities Reform Act of 1995 and other securities laws. These forward-looking statements are based on the company's expectations and beliefs as of today, November 6, 2025. Forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those projected. The company undertakes no obligation to provide updates or revisions to the forward-looking statements made in today's call. Additional information concerning factors that could cause those differences is contained in our filings with the SEC and in the press release announcing our results. Investors are cautioned not to place undue reliance on any forward-looking statements. Further, please note that we may refer to certain non-GAAP financial information on today's call. You can find reconciliations of the non-GAAP financial measures to the most comparable GAAP measures in our earnings press release. Today's call is being recorded and will be available for replay. With that, I'll hand the call over to Casey Crenshaw for his remarks. Thank you, Andy, and good morning to everyone joining us on the call. We executed according to plan in the third quarter, capitalizing on continued demand for our integrated last mile LNG solutions across our markets. Third quarter volume increased by more than 20% year over year, driven by strong demand across our growing base of marine, aerospace, and power generation customers. We continue to see healthy demand trends across these sectors, supported by increased commercial space flight activity, seasonally strong demand for distributed power, and robust throughput from cruise activity in the late summer months. Commercially, our team remains highly engaged with both new and existing customers, particularly in the aerospace and marine markets. We also see growing opportunity in the power generation as domestic investment in new data center capacity increases the need for on-demand distributed power solutions. As announced in October, we secured the largest customer contract in the company's history, a 10-year marine bunkering contract for LNG produced at our proposed 350,000 gallon per day LNG facility in Galveston, Texas. Subject to the finalization of project financing, we expect to break ground on the Galveston facility in the first quarter of 2026, and are targeting the facility to come on stream in late 2027. In parallel, We plan to construct a Jones Act-compliant LNG bunkering vessel to serve customers in the Port of Galveston Houston Ship Channel and surrounding areas, consistent with a focus on building a vertically integrated marine bunkering solution in the local market. And this will serve as a template for what we seek to replicate in additional markets over time. Beyond this initial bunkering customer, who will represent approximately 40% of the planned offtake capacity at the Galveston facility, we're in late-stage negotiations with another marine bunkering customer for an additional 20% of our planned production capacity. We expect to have approximately 75% of the total capacity sold under long-term customer contracts by the time we reach final investment an early fund investment decision in early 2026. In recent months, we've worked closely with our engineering and design partners to secure long lead time items and develop detailed engineering designs for the LNG facility and the related bunkering vessel. Additionally, we are finalizing contracts for equipment, plant and vessel construction and related items such as pipeline access, putting us on track for the final investment decision in early 2026. Stabilis has engaged a leading investment bank to arrange the financing for this project. We have evaluated a variety of potential financing options and intend to prioritize a structure that maximizes value creation for all shareholders. At this time, we intend to pursue a joint venture structure supported by project-level debt and equity from third-party investors. Through this structure, we intend to retain operational control of the project, positioning us to realize meaningful economic upside and long-term returns on our investment. We intend to share periodic updates with our shareholders as key project development milestones are achieved. This is a transformational moment in the history of our organization, and we're excited to take this next important step in our company's growth. In the meantime, we'll stay focused on day-to-day execution required to deliver profitable growth. This means continuing to expand commercial contracts across our vertical markets, continuing to improve operational excellence, and staying disciplined around how and where we deploy capital as we seek to maximize value for our shareholders. With that, I'll turn the call over to Andy to review our financial performance in detail. Thank you, Casey. As customary, I'll begin with a discussion of our third quarter performance, followed by an update on our balance sheet and liquidity. Third quarter revenue increased 15% year-over-year, driven by a 21% increase in LNG gallons sold and higher average commodity prices, partially offset by less favorable customer mix and lower rental and service revenues. At an end market level, revenues increased in our three target growth markets, with aerospace revenues increasing by more than 88% compared to the same quarter last year, and power generation and marine revenues increasing by 31% and 32% respectively. This strong performance was partially offset by the scheduled end of an industrial customer contract that concluded late last year. During the quarter, approximately 73% of total revenue was derived from aerospace, marine, and power generation customers, up from 60% in the prior year quarter, reflecting the continued strength and diversification of demand across these high-growth markets. Adjusted EBITDA was $2.9 million during the quarter, compared to $2.6 million last year. Adjusted EBITDA margin was 14.3%, down from 14.6% in the third quarter of last year. The decrease in our adjusted EBITDA margin primarily relates to the roll off of the high margin industrial project previously mentioned. Cash from operations totaled $2.4 million for the quarter. Equity at quarter end was $15.5 million, consisting of $10.3 million of cash and approximately $5.2 million of availability under our credit facilities. We ended the quarter with $9.5 million of total debt and lease obligations, resulting in a net positive cash position. Overall, our balance sheet remains strong and provides ample flexibility to support our ongoing operations. Capital expenditures totaled $3.9 million, primarily related to early engineering and design work for the Galveston LNG facility and related bunkering vessel. We expect investment to accelerate over the coming quarters as we progress toward construction and a final investment decision in early 2026. Once Project FID is made, we expect all project funding requirements to be met through project-level financing. In the interim, we anticipate investing an additional $3 to $5 million in CapEx on the project. That concludes our prepared remarks. Operator, please open the line for the Q&A session.

Thank you, Mr. Buhala. Ladies and gentlemen, at this time, if you would like to ask a question, please press star 1 on your telephone. If you find your question has been addressed, you may remove yourself from the queue by pressing star 2. Again, we ask that you please pick up your handset when posing your questions to provide optimal sound quality. We'll go first this morning to Martin Malloy of Johnson Rice. Martin, please go ahead.