Stabilis Solutions, Inc. (NASDAQ:SLNG) Q3 2023 Earnings Call Transcript

So it’s a shift at higher — at similar higher margins but also ratable, predictable in that plant but also hope to replicate that on the water as well.

Jeffrey Grampp: Great, okay. Thank you. And curious if you can talk about the vetting process you went through with Carnival to earn this business. I imagine it wasn’t easy but maybe wanted to get a better sense for the rigor there; and also, how you guys think about this maybe being a beachfront, no pun intended, for additional opportunities. Does this provide validation, you think, for other potential partners? Or is everyone kind of independent and needs to do their own process to come to terms with you guys?

Westervelt Ballard: Well, I’ll talk about that really in two buckets. Carnival is a delight. They are a world-class organization, incredibly professional. And as I mentioned in my remarks, they really are a pioneer. And I think that the way they think about things is very in line with the way that we think about things. And so we are delighted to have them as a relationship and honored to have been chosen and selected as somebody who’s going to bring a massive supply chain bunkering capability to their — for their needs. So we’re delighted. I’ll say, if the number of inbounds that our commercial team and me even personally received as a result of this announcement and, frankly, leading up to that is any indication of this as a validating moment for us, then so be it.

Because certainly our phones have been much more active, but I think it’s important to note that, yes, our phones have been active as a result of this announcement, but if you think back to, call it, about a year ago: We really started in earnest this aggressive and proactive campaign of talking about expansionary, waterfront, full supply chain capabilities for bunkering across America. And the volume of discussions have grown exponentially, so while this is a great validation, I don’t know that it was a necessary validation because those discussions have already been in the works. And we’re very optimistic that there’s more to come not only in the Gulf of Mexico but across a variety of ports in America.

Operator: [Operator Instructions] We’ll take our next question from Barry Haimes with Sage Asset Management.

Barry Haimes: Thank you, guys. I had a couple of different questions. I’ll just go one at a time. First, could you give us an update on the space business? You didn’t talk about it or mentioned it in the press release, so we’d just love to get the update there.

Westervelt Ballard: Love the space business. We’ve been involved and fueling rocket ships since 2018, so it’s — really fits and — when we’ve got the two buckets at Stabilis. We’ve got that industrial business and then obviously we’ve got our marine bunkering business. It really falls in the industrial business. That business is exciting because the vast majority of those propellant companies are really migrating more and more to LNG as a fuel source. And so we think that there are blue skies ahead. The challenge now is it’s still a bit lumpy, but we think that — as the — as LNG or methane becomes more scarce in some of these markets that, that paradigm changes to a bit more predictable and ratable contract construct similar to these marine-type contracts.

But we love it. It’s a great business for us. It will continue to be a great business for us, we think. And I hope that in future calls I’ve got the ability to talk more specifically around it as there’s better predictability and visibility on it, but it’s something that we are very excited about.

Barry Haimes: Right. So, I get that it’s lumpy, but just to even add a little, if you did nine months this year compared to nine months last year, how do you feel for the growth or the size on the space business?