Stabilis (NASDAQ: SLNG) secures $200M LNG data center deal amid weaker Q1
Rhea-AI Filing Summary
Stabilis Solutions, Inc. reported sharply weaker quarterly results for the three months ended March 31, 2026 as two large multi-year contracts ended in 2025. Revenue fell to $10.4 million from $17.3 million, and the net loss widened to $4.1 million from $1.6 million.
Cost of revenues declined less than sales, leaving costs at 96% of revenue versus 74% a year earlier, while selling, general and administrative expenses dropped after prior-year severance and bonus costs. Operating cash flow rose to $12.4 million, driven mainly by a $15 million advance payment on a new multi-year data center power-generation LNG contract estimated at about $200 million of total revenue.
At quarter-end, the company held $3.1 million in cash and $10.6 million in restricted cash, against about $29.3 million of debt and operating lease obligations. Stabilis is advancing a proposed $350–$400 million Galveston LNG liquefaction project and has filed a shelf registration allowing up to $100 million of future securities issuance, including an at-the-market equity program.
Positive
- $200 million data center LNG contract signed with take-or-pay structure, including $25 million of advance payments (of which $15 million already received) to support behind-the-meter power generation from 2027 through 2029.
- Galveston LNG liquefaction project advancing toward a targeted 2026 FID, with a ten-year marine bunkering agreement already covering about 16% of the proposed 350,000 gallon-per-day capacity.
Negative
- Quarterly revenue declined 40% year over year to $10.4 million, and net loss increased to $4.1 million, largely due to the conclusion of two major contracts that together represented over half of 2025 revenue.
- Cost structure pressure continued, with cost of revenues representing 96% of sales in the current quarter versus 74% a year earlier, indicating significantly weaker gross margins.
Insights
Results weakened on lost contracts, while growth projects and prepayments reshaped liquidity.
Stabilis Solutions saw quarterly revenue drop from $17.3 million to $10.4 million as two multi‑year contracts that supplied temporary power and marine bunkering, together contributing over 50% of 2025 revenue, ended. Net loss expanded to $4.1 million, reflecting much lower volumes and margin compression as cost of revenues fell less than sales.
Despite the loss, operating cash flow improved to $12.4 million, mainly because the company received a $15 million advance tied to a new data center power-generation contract estimated at about $200 million in revenue through Q1 2029. This payment is recorded as deferred revenue and mostly as restricted cash, earmarked for project equipment, LNG supply and commissioning.
Stabilis is also progressing a proposed Galveston LNG liquefaction facility and Jones Act‑compliant bunkering vessel with expected capital of $350–$400 million, backed so far by a ten‑year marine bunkering agreement covering roughly 16% of planned capacity. A new Form S‑3 shelf and ATM program of up to $100 million provides flexibility to raise capital, while outstanding debt of about $6.9 million under the AmeriState loan and total lease liabilities of $22.2 million frame current obligations. Management highlights covenant compliance but acknowledges that weaker profitability could pressure coverage ratios, so execution on growth contracts and project financing will be important in future periods.
Key Figures
Key Terms
take-or-pay financial
deferred revenue financial
right-of-use asset financial
Jones Act-compliant regulatory
Form S-3 shelf registration regulatory
time charter agreement financial
Earnings Snapshot
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
| | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the Quarterly Period Ended
| | TRANSITION REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number.
STABILIS SOLUTIONS, INC.
(Exact name of registrant as specified in its charter)
| | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices, including zip code)
(
(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 |
| | | The |
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.
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).
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 | ☐ | |
| | ☒ | 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
As of May 6, 2026, there were
STABILIS SOLUTIONS, INC. AND SUBSIDIARIES
FORM 10-Q Index
For the Quarterly Period Ended March 31, 2026
| Page |
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| Part I. Financial Information |
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| Item 1. |
Financial Statements (Unaudited) |
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| Condensed Consolidated Balance Sheets |
4 |
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| Condensed Consolidated Statements of Operations |
5 |
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| Condensed Consolidated Statements of Comprehensive Income (Loss) |
6 |
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| Condensed Consolidated Statements of Stockholders’ Equity |
7 |
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| Condensed Consolidated Statements of Cash Flows |
8 |
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| Notes to Condensed Consolidated Financial Statements |
9 |
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| Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
15 |
| Item 4. |
Controls and Procedures |
21 |
| Part II. Other Information |
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| Item 1. |
Legal Proceedings |
21 |
| Item 1A. |
Risk Factors |
21 |
| Item 5. |
Other Information |
21 |
| Item 6. |
Exhibits |
22 |
| Signatures |
23 |
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CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q (“this Report”) includes statements that constitute forward-looking statements within the meaning of the federal securities laws. Forward-looking statements represent intentions, plans, expectations, assumptions and beliefs about future events and are subject to risks and uncertainties and other factors. These statements may relate to, but are not limited to, information or assumptions about us, our capital and other expenditures, dividends, financing plans, capital structure, cash flow, pending legal and regulatory proceedings and claims, including environmental matters, future economic performance, operating income, cost savings, and management’s plans, strategies, goals and objectives for future operations and growth. These forward-looking statements generally are accompanied by words such as “intend,” “anticipate,” “believe,” “estimate,” “expect,” “should,” “seek,” “project,” “plan” or similar expressions. Any statement that is not a historical fact is a forward-looking statement. It should be understood that these forward-looking statements are necessary estimates reflecting the best judgment of senior management, not guarantees of future performance. Many of the factors that impact forward-looking statements are outside of our control and could cause actual results to differ materially from the results expressed or implied by those forward-looking statements. When considering forward-looking statements, you should keep in mind the risk factors and other cautionary statements as described in Part I. “Item 1A. Risk Factors” of the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission ("the SEC") on March 5, 2026, as well as any additional risk factors identified and described in Part II. “Item 1A. Risk Factors” of this Report.
We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as may be required under applicable securities laws. All forward-looking statements included in this document are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.
In this Report, we may rely on and refer to information from market research reports, analyst reports and other publicly available information. Although we believe that this information is reliable, we cannot guarantee the accuracy and completeness of this information, and we have not independently verified it.
PART I – FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS. (Unaudited)
Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited, in thousands, except share and per share data)
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash and cash equivalents | ||||||||
| Accounts receivable, net | ||||||||
| Inventories, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Total current assets | ||||||||
| Property, plant and equipment: | ||||||||
| Cost | ||||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Property, plant and equipment, net | ||||||||
| Goodwill | ||||||||
| Investments in foreign joint ventures | ||||||||
| Right-of-use assets and other noncurrent assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities and Stockholders’ Equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Accrued liabilities | ||||||||
| Current portion of long-term notes payable | ||||||||
| Current portion of finance and operating lease obligations | ||||||||
| Total current liabilities | ||||||||
| Long-term notes payable, net of current portion and debt issuance costs | ||||||||
| Deferred revenue, noncurrent | ||||||||
| Long-term portion of operating lease obligations | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 10) | ||||||||
| Stockholders’ equity: | ||||||||
| Preferred stock; $ par value, shares authorized, shares issued and outstanding at March 31, 2026 and December 31, 2025 | ||||||||
| Common stock; $ par value, shares authorized, and shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive income | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ equity | ||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited, in thousands, except share and per share data)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Revenues: | ||||||||
| Revenues | $ | $ | ||||||
| Operating expenses: | ||||||||
| Cost of revenues | ||||||||
| Change in unrealized gain on natural gas derivatives | ( | ) | ||||||
| Selling, general and administrative expenses | ||||||||
| Gain from disposal of fixed assets | ( | ) | ||||||
| Impairment | ||||||||
| Depreciation expense | ||||||||
| Total operating expenses | ||||||||
| Loss from operations before equity income | ( | ) | ( | ) | ||||
| Net equity income from foreign joint venture operations: | ||||||||
| Income from equity investment in foreign joint venture | ||||||||
| Foreign joint venture operating related expenses | ( | ) | ( | ) | ||||
| Net equity income from foreign joint venture operations | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest income, net | ||||||||
| Other income (expense), net | ( | ) | ( | ) | ||||
| Total other income (expense) | ( | ) | ||||||
| Net loss before income tax expense (benefit) | ( | ) | ( | ) | ||||
| Income tax expense (benefit) | ( | ) | ||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Net loss per common share: | ||||||||
| Basic and diluted per common share | $ | ( | ) | $ | ( | ) | ||
| Weighted average number of common shares outstanding - Basic and diluted | ||||||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Comprehensive Income (Loss)
(Unaudited, in thousands)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Foreign currency translation adjustment, net of tax | ||||||||
| Total comprehensive loss | $ | ( | ) | $ | ( | ) | ||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Stockholders’ Equity
(Unaudited, in thousands, except share data)
| Accumulated | ||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||
| Common Stock | Additional | Comprehensive | Accumulated | |||||||||||||||||||||
| Shares | Amount | Paid-in Capital | Income (Loss) | Deficit | Total | |||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Common stock issued from vesting of stock-based awards | ||||||||||||||||||||||||
| Stock-based compensation | — | |||||||||||||||||||||||
| Employee tax payments from stock-based withholding | ( | ) | ( | ) | ( | ) | ||||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Other comprehensive income, net of tax | — | |||||||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Accumulated | ||||||||||||||||||||||||
| Other | ||||||||||||||||||||||||
| Common Stock | Additional | Comprehensive | Accumulated | |||||||||||||||||||||
| Shares | Amount | Paid-in Capital | Income | Deficit | Total | |||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
| Net loss | — | ( | ) | ( | ) | |||||||||||||||||||
| Other comprehensive income, net of tax | — | |||||||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | $ | ( | ) | $ | |||||||||||||||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements.
Stabilis Solutions, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited, in thousands)
| Three Months Ended | ||||||||
| March 31, | ||||||||
| 2026 | 2025 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash provided by operating activities: | ||||||||
| Depreciation | ||||||||
| Stock-based compensation expense | ||||||||
| Provision for credit losses | ||||||||
| Gain on disposal of assets | ( | ) | ||||||
| Income from equity investment in joint venture | ( | ) | ( | ) | ||||
| Impairment | ||||||||
| Amortization of debt issuance cost | ||||||||
| Cash settlements from natural gas derivatives, net | ||||||||
| Realized and unrealized gains on natural gas derivatives, net | ( | ) | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ( | ) | ||||||
| Prepaid expenses and other current assets | ||||||||
| Accounts payable and accrued liabilities | ( | ) | ||||||
| Deferred revenue | ||||||||
| Other | ( | ) | ( | ) | ||||
| Net cash provided by operating activities | ||||||||
| Cash flows from investing activities: | ||||||||
| Acquisition of fixed assets | ( | ) | ( | ) | ||||
| Proceeds from sale of fixed assets | ||||||||
| Net cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Payments on short- and long-term notes payable and finance leases | ( | ) | ( | ) | ||||
| Payment of debt issuance costs | ( | ) | ( | ) | ||||
| Employee tax payments from stock-based withholding | ( | ) | ||||||
| Net cash used in financing activities | ( | ) | ( | ) | ||||
| Effect of exchange rate changes on cash | ( | ) | ( | ) | ||||
| Net increase in cash, cash equivalents and restricted cash and cash equivalents | ||||||||
| Cash, cash equivalents and restricted cash and cash equivalents, beginning of period | ||||||||
| Cash, cash equivalents and restricted cash and cash equivalents, end of period | $ | $ | ||||||
| Cash, cash equivalents and restricted cash and cash equivalents, end of period, as presented on the Condensed Consolidated Balance Sheets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash and cash equivalents | ||||||||
| Total cash and cash equivalents | $ | $ | ||||||
The accompanying notes are an integral part of the Condensed Consolidated Financial Statements
STABILIS SOLUTIONS, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements (Unaudited)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Description of Business
Stabilis Solutions, Inc. and its subsidiaries (the “Company”, “Stabilis”, “our”, “us” or “we”) provide turnkey clean energy production, storage, transportation and fueling solutions using liquefied natural gas (“LNG”) to multiple end markets.
The Company serves customers in diverse end markets, including aerospace, agriculture, industrial, marine bunkering, mining, oil and gas, pipeline, remote power and utility markets. LNG can be used to deliver natural gas to locations where pipeline service is unavailable, has been interrupted, or needs to be supplemented. Additionally, LNG can be used as a partner fuel for renewable energy, and as an alternative to traditional fuel sources, such as distillate fuel oil (including diesel fuel and other fuel oils) and propane, among others to provide both environmental and economic benefits.
The Company also builds power and control systems for the energy industry in China through its
Basis of Presentation and Consolidation
The accompanying unaudited, interim condensed consolidated financial statements (“Condensed Consolidated Financial Statements”) include our accounts and those of our subsidiaries and have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, certain information and disclosures normally included in the notes to consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) have been condensed or omitted. We believe that the presentation and disclosures within this report are adequate to prevent the information presented herein from being misleading. The Condensed Consolidated Financial Statements reflect all adjustments (consisting of normal recurring adjustments) for a fair presentation of the interim periods. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full year. The accompanying Condensed Consolidated Financial Statements should be read in conjunction with the audited consolidated financial statements as of and for the year ended December 31, 2025 included in the Company's Annual Report on Form 10-K, as filed on March 5, 2026. All intercompany accounts and transactions have been eliminated in consolidation. In the Notes to Condensed Consolidated Financial Statements, all dollar amounts in tabulations are in thousands, unless otherwise indicated.
Use of Estimates in the Preparation of the Consolidated Financial Statements
The preparation of the Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Significant items subject to such estimates include the determination of fair value of equity-based awards, fair value of natural gas derivatives, carrying amount of contingencies, valuation allowances for receivables, inventories, and deferred income tax assets, valuations assigned to assets and liabilities in business combinations, and impairments of long-lived assets. Actual results could differ from those estimates, and these differences could be material to the Condensed Consolidated Financial Statements.
Segment Reporting
In accordance with ASC Topic 280 - "Segment Reporting (ASC 280)" the Company has determined that it has a single operating and reporting segment. As a result, the Company's segment accounting policies are the same as described herein and the Company does not have any material intra-segment sales and transfers of assets. The Company's Chief Operating Decision Maker ("CODM") is the Chief Executive Officer (the "CEO"). The CEO, with the Chief Financial Officer, assesses the performance and makes operating decisions of the Company on a consolidated basis, based on the Company's net increase in shareholder's equity resulting from operations ("net income"). Company assets are not reviewed by the CODM at a different asset level or category, but at the consolidated level. As the Company's operations are comprised of a single operating segment, the segment assets are reflected on the accompanying Condensed Consolidated Balance Sheets as "total assets" and the significant segment expenses are listed on the accompanying Condensed Consolidated Statements of Operations.
Restricted Cash and Cash Equivalents
Restricted cash and cash equivalents consist of funds that are contractually restricted as to usage or withdrawal and have been presented separately from cash and cash equivalents on our Condensed Consolidated Balance Sheets. Our restricted cash relates to a $
Other noncurrent assets
Other noncurrent assets consist of legal costs incurred to obtain customer contracts and legal costs associated with obtaining financing for the Company’s proposed Galveston LNG Liquefaction facility that have been capitalized and will be expensed over the term of the contract or financing term. During the three months ended March 31, 2026, the Company impaired contract costs of $
Recent Accounting Pronouncements
In November 2024, the FASB issued ASU 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses" which requires companies to disclose disaggregated information about certain costs and expenses in the notes to the financial statements. ASU 2024-03 is effective for companies for annual reporting periods beginning after December 15, 2026. The requirements can be applied either prospectively or retrospectively. Although early adoption is permitted, the Company intends to adopt the pronouncement when the pronouncement becomes effective on January 1, 2027. The Company does not expect the adoption of ASU 2024-03 to have a significant impact on its consolidated financial statements.
2. REVENUE RECOGNITION
We recognize revenues when the transfer of promised goods or services are delivered to our customers in accordance with the applicable customer contract and we are entitled to be paid by the customer. Revenues are measured as consideration specified in the contract and exclude any sales incentives and amounts collected on behalf of third parties. Revenues from contracts with customers are disaggregated into (1) LNG Product (2) rental (3) service and (4) other. Certain contracts may include multiple goods or services such as the usage of equipment and delivery of field support services that are bundled into an all-in price to the customer for each gallon of LNG delivered. Revenue recognition under these contracts requires significant judgment by the Company in order to determine the appropriate accounting for these transactions, including whether performance obligations should be accounted for separately versus together, how the price should be allocated among the performance obligations, and when to recognize revenue for each performance obligation. The Company has determined that these contracts have multiple performance obligations and the Company allocates the contract price to each performance obligation using its best estimates of the respective standalone selling price of each distinct good or service at the time the contract was negotiated.
LNG Product revenues
LNG Product revenues represent the sale of LNG from both produced and purchased sources as well as the transportation performed to deliver the LNG to our customer location. LNG Product revenues are recognized upon delivery of the LNG to the customer, at which point the customer controls the product and the Company has an unconditional right to payment. The Company acts as a principal when using third-party transportation companies and therefore recognizes the gross revenue for the supply of LNG. The Company does not differentiate between the revenue from the sale of LNG production and purchased LNG as the criteria for revenue recognition are identical. Some of our contracts contain minimum take-or-pay amounts where a customer has agreed to source a minimum volume of LNG under the contract. Take or pay revenues are only recognized when the customer has failed to take the minimum contracted volumes upon completion of the time period specified within the contract, and the Company has the unconditional right to receive payment for the take or pay amount. Certain of our sales contracts contain provisions that may meet the criteria of a derivative in the event delivery is not made. These contracts are accounted for under the normal purchase normal sales exclusion under U.S. GAAP and are not measured at fair value each reporting period. Our LNG contracts are generally one to 24 months in duration.
Rental revenues
Rental revenues are generated from the rental of cryogenic equipment to our customers. Rental revenues are not dependent upon the gallons delivered but based upon day rates or monthly rates for the use of equipment as specifically established within the contract and are disaggregated from LNG Product revenues. Revenues related to rental of equipment are recognized under Topic 606 and not ASC 842: Leases, as the Company maintains control of the equipment that the customer uses and can replace the rented equipment with similar equipment should the rented equipment become inoperable or the Company chooses to replace the equipment for maintenance purposes. Revenue is recognized as the rental period is completed and for periods that cross month end, revenue is recognized for the portion of the rental period that has been completed to date. Performance obligations for rental revenue are considered to be satisfied as the rental period is completed based upon the terms of the related contract. The stated rental rates within each contract are representative of the stand-alone rental rates at the time the contract was negotiated.
Service revenues
Service revenues are generated from engineering and field support services and represent the human resources provided to the customer to support the use of LNG at the customer’s job site. These include support and costs for mobilization and demobilization of equipment at customer sites as well as onsite technical support while customers are consuming LNG. Service revenues are not dependent upon the gallons delivered or rental period but based upon the specific contractual terms and can be based on an event (i.e. mobilization or demobilization) or an hourly rate as specifically established within the contract and are disaggregated from LNG Product revenues and Rental revenues. Service revenue is recognized as the event is completed or work is done. The stated hourly labor rates in each contract are representative of the stand-alone hourly rates at the time the contract was negotiated.
Other revenues
Other revenues are items that, due to their nature, are disaggregated from the categories mentioned above such as expenses incurred by the Company on behalf of the customer that we contractually rebill to our customers on a cost-plus basis.
Disaggregated revenues
The table below presents revenue disaggregated by source, for the three months ended March 31, 2026 and 2025 (in thousands):
| Three Months Ended | ||||||||
| March 31, | ||||||||
| Revenues: | 2026 | 2025 | ||||||
| LNG Product | $ | $ | ||||||
| Rental | ||||||||
| Service | ||||||||
| Other | ||||||||
| Total revenues | $ | $ | ||||||
The table below presents revenue disaggregated by geographic location, for the three months ended March 31, 2026 and 2025 (in thousands):
| Three Months Ended | ||||||||
| March 31, | ||||||||
| Revenues: | 2026 | 2025 | ||||||
| United States | $ | $ | ||||||
| Mexico | ||||||||
| Total revenues | $ | $ | ||||||
Variable and other Revenue Components
Certain of our contracts may include rental or services that may vary based on customer demand at stated rates within the contract and are satisfied as the work is authorized by the customer and performed by the Company. LNG product sales agreements may include both fixed and variable fees per gallon of LNG but are representative of the stand-alone selling price for LNG at the time the contract is negotiated. We have concluded that the variable LNG fees meet the exception for allocating variable consideration to specific parts of the contract. As such, the variable consideration for these contracts is allocated to each distinct gallon of LNG and recognized when that distinct gallon of LNG is delivered to the customer.
Taxes assessed by a governmental authority that are directly imposed on revenue-producing transactions between the Company and its customers, such as sales, use and value-added taxes, are excluded from revenue.
3. PREPAID EXPENSES AND OTHER CURRENT ASSETS
The Company’s prepaid expenses and other current assets at March 31, 2026 and December 31, 2025 consisted of the following (in thousands):
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Prepaid insurance | $ | $ | ||||||
| Prepaid supplier expenses | ||||||||
| Other receivables | ||||||||
| Deposits | ||||||||
| Other | ||||||||
| Total prepaid expenses and other current assets | $ | $ | ||||||
4. PROPERTY, PLANT AND EQUIPMENT
The Company’s property, plant and equipment at March 31, 2026 and December 31, 2025 consisted of the following (in thousands):
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Liquefaction plants and systems | $ | $ | ||||||
| Real property and buildings | ||||||||
| Vehicles and tanker trailers and equipment | ||||||||
| Computer and office equipment | ||||||||
| Construction in progress | ||||||||
| Leasehold improvements | ||||||||
| Total | ||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||
| Net | $ | $ | ||||||
Depreciation expense totaled $
Construction in progress of $
5. ACCRUED LIABILITIES
The Company’s accrued liabilities at March 31, 2026 and December 31, 2025 consisted of the following (in thousands):
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Compensation and benefits | $ | $ | ||||||
| Deferred revenue | ||||||||
| Other taxes payable | ||||||||
| Customer deposits and prepayments | ||||||||
| Other accrued liabilities | ||||||||
| Total accrued liabilities | $ | $ | ||||||
6. DEFERRED REVENUE
The Company records deferred revenue if we receive consideration, prior to transferring the goods or services, required under the terms of the sales contract, to the customer.
Multi-year, On-site Power Generation for a Data Center
During the three months ended March 31, 2026, the Company received an advance payment of $
The Company's deferred revenue at March 31, 2026 and December 31, 2025 was $
7. LEASES
Our leases primarily consist of operating leases for certain facilities and office spaces in Houston, Texas and Monterrey, Mexico, and financing leases for certain equipment.
Time Charter Agreement - Marine Bunkering Vessel
On December 12, 2025, the Company entered into a time charter agreement for a marine bunkering vessel, the Seaspan Garibaldi for a period of years, commencing in 2026. The Company determined that the time charter agreement represents an operating lease with commencement beginning on the delivery date of the Garibaldi, which was March 1, 2026. On March 1, the Company recorded a right-of-use asset and lease liability of $
Operating lease assets also include any upfront lease payments made and exclude lease incentives and initial direct cost incurred. Lease expense for operating leases is recognized on a straight-line basis over the lease term. The Company also leases marine bunkering and staging sites in Galveston, Texas, along with certain equipment on a short-term basis. Leases which are less than twelve months and have no cancellation penalties are not recorded on the Condensed Consolidated Balance Sheets. Our leases have remaining terms of to
The following table summarizes our operating and finance lease assets and liabilities at March 31, 2026 and December 31, 2025 (in thousands):
| March 31, | December 31, | ||||||||
| Balance sheet line item classification | 2026 | 2025 | |||||||
| Assets | |||||||||
| Operating lease assets |
| $ | $ | ||||||
| Finance lease assets |
| ||||||||
| Total lease assets | $ | $ | |||||||
| Liabilities | |||||||||
| Current | |||||||||
| Operating lease obligation |
| $ | $ | ||||||
| Finance lease obligation | Current portion of finance and operating lease obligations | ||||||||
| Noncurrent | |||||||||
| Operating lease obligation | Long-term portion of operating lease obligations | ||||||||
| Total lease liabilities | $ | $ | |||||||
Lease expense that relates to the Company's operating leases that are on the Condensed Consolidated Balance Sheets, was approximately $
| March 31, | March 31, | ||||||||
| Lease Cost | Classification | 2026 | 2025 | ||||||
| Operating lease cost | Cost of revenues | $ | $ | ||||||
| Operating lease cost | Selling, general and administrative expenses | ||||||||
| Finance lease cost: | |||||||||
| Amortization of leased assets | Depreciation expense | ||||||||
| Interest on lease liabilities | Interest expense | ||||||||
| Net lease cost | $ | $ | |||||||
Future Minimum Lease Payments
The following schedule presents the future minimum lease payments that relate to our operating lease obligations on the Company's Condensed Consolidated Balance Sheets at March 31, 2026 (in thousands):
| Operating Leases | ||||
| 2026 | $ | |||
| 2027 | ||||
| 2028 | ||||
| 2029 and Thereafter | ||||
| Total lease payments | ||||
| Less: Interest | ( | ) | ||
| Present value of lease liabilities | $ | |||
Lease term and discount rates for our operating and finance lease obligations are as follows:
| March 31, | March 31, | |||||||
| Lease Term and Discount Rate | 2026 | 2025 | ||||||
| Weighted-average remaining lease term (years) | ||||||||
| Operating leases | ||||||||
| Finance leases | — | |||||||
| Weighted-average discount rate | ||||||||
| Operating leases | % | % | ||||||
| Finance leases | % | % | ||||||
The following table summarizes the supplemental cash flow information related to leases for the three months ended March 31, 2026 and 2025 (in thousands):
| March 31, | March 31, | |||||||
| Other information | 2026 | 2025 | ||||||
| Cash paid for amounts included in the measurement of lease liabilities | ||||||||
| Operating cash flows from operating leases | $ | $ | ||||||
| Financing cash flows from finance leases | ||||||||
| Interest paid | ||||||||
8. DEBT
During the three months ended March 31, 2026, there were no material changes to the Company’s debt other than scheduled repayments. During the three months ended March 31, 2026 and 2025, interest expense was $
Secured Term Note
On April 8, 2021, the Company entered into a loan agreement (the “AmeriState Loan Agreement”) with AmeriState Bank (“Lender”) to provide for an advancing loan facility in the aggregate principal amount of up to $
The AmeriState Loan Agreement requires the Company to meet certain financial covenants which include a debt-to-net-worth ratio of not more than
Upon an Event of Default (as defined in the AmeriState Loan Agreement), the Lender may (i) terminate its commitment, (ii) declare the outstanding principal amount of the Advancing Notes (as defined in the AmeriState Loan Agreement) due and payable, or (iii) exercise all rights and remedies available to Lender under the AmeriState Loan Agreement.
9. RELATED PARTY TRANSACTIONS
Casey Crenshaw (our Executive Chairman of the Board and interim President and Chief Executive Officer) is the beneficial owner of
For the three months ended March 31, 2026 and 2025, the Company's purchases and lease payments with The Modern Group were immaterial. The Company had
Chart Energy and Chemicals, Inc. ("Chart E&C") beneficially owns
10. COMMITMENTS AND CONTINGENCIES
Environmental Matters
The Company is subject to federal, state and local environmental laws and regulations. The Company does not anticipate any expenditures to comply with such laws and regulations that would have a material impact on the Company’s condensed consolidated financial position, results of operations or liquidity. The Company believes that its operations comply, in all material respects, with applicable federal, state and local environmental laws and regulations.
Litigation, Claims and Contingencies
The Company may become party to various legal actions that arise in the ordinary course of its business. The Company is also subject to audit by tax and other authorities for varying periods in various federal, state and local jurisdictions, and disputes may arise during the course of these audits. It is impossible to determine the ultimate liabilities that the Company may incur resulting from any of these lawsuits, claims, proceedings, audits, commitments, contingencies and related matters or the timing of these liabilities, if any. If these matters were to ultimately be resolved unfavorably, it is possible that such an outcome could have a material adverse effect upon the Company’s condensed consolidated financial position, results of operations, or liquidity. The Company does not, however, anticipate such an outcome and it believes the ultimate resolution of these matters will not have a material adverse effect on the Company’s condensed consolidated financial position, results of operations, or liquidity.
11. SUPPLEMENTAL CASH FLOW INFORMATION
The Company's supplemental disclosure of cash flow information for the three months ended March 31, 2026 and 2025 is as follows (in thousands):
| Three Months Ended | ||||||||
| March 31, | ||||||||
| Supplemental Disclosure of Cash Flow Information: | 2026 | 2025 | ||||||
| Interest paid | $ | $ | ||||||
| Income taxes paid (received) | ( | ) | ||||||
| Significant non-cash investing and financing activities: | ||||||||
| Acquisition of fixed assets included within accounts payable and accrued expenses | $ | $ | ||||||
| ROU assets acquired under operating leases | ||||||||
12. SUBSEQUENT EVENTS
The Company received $
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
The following discussion should be read in conjunction with the Condensed Consolidated Financial Statements and notes thereto included elsewhere in this Form 10-Q (“this Report”) and the consolidated financial statements included in the 2025 Annual Report on Form 10-K filed on March 5, 2026 with the U.S. Securities and Exchange Commission (the “SEC”). Historical results and percentage relationships set forth in the Condensed Consolidated Statements of Operations and Cash Flows, including trends that might appear, are not necessarily indicative of future operations or cash flows.
Overview
Stabilis Solutions, Inc. and its subsidiaries provide turnkey clean energy production, storage, transportation and fueling solutions, using liquefied natural gas (“LNG”), to multiple end markets. We provide LNG solutions to customers in diverse end markets, including aerospace, agriculture, industrial, marine bunkering, mining, oil and gas, pipeline, remote power and utility markets. LNG can be used to deliver natural gas to locations where pipeline service is unavailable, has been interrupted, or needs to be supplemented. LNG can also be used to replace a variety of fuels, including distillate fuel oil, such as diesel and marine gas oil, and propane, among others, to provide environmental and economic benefits. Increasingly, LNG is being utilized as a transportation fuel in the marine industry and as a propellant in the private rocket launch sector. We believe that these fuel markets are large and provide significant opportunities for LNG usage.
The Company generates revenue by selling and delivering LNG to our customers, renting cryogenic equipment and providing engineering and field support services. We sell our products and services separately or as a bundle depending on the customer’s needs. Pricing depends on market pricing for natural gas and competing fuel sources (such as diesel, fuel oil, and propane among others), as well as the customer’s purchased volume, contract duration and credit profile.
LNG Production and Sales—Stabilis builds and operates cryogenic natural gas processing facilities, called “liquefiers,” which convert natural gas into LNG through a purification and multiple stage cooling process. We currently own and operate a liquefier that can produce up to 100,000 LNG gallons per day in George West, Texas and a liquefier that can produce up to 30,000 LNG gallons per day in Port Allen, Louisiana. The Company continues to seek expansion of its own liquefaction capacity as described in "Expanding Markets and Expansion Efforts" below. We also purchase LNG from third-party production sources which allows us to support customers in markets where we do not own liquefiers. We make the determination of LNG supply sources based on the cost of LNG, the transportation cost to deliver to regional customer locations, and the reliability of the supply source. Revenues earned from the production and sales of LNG are included within LNG Product revenue.
Transportation and Logistics Services—Stabilis offers our customers a “virtual natural gas pipeline” by providing turnkey LNG transportation and logistics services in North America. We deliver LNG to our customers’ work sites from both our own production facilities and our network of third-party production sources located throughout North America. We own a fleet of cryogenic trailers to transport and deliver LNG. We also outsource similar equipment and transportation services for LNG from qualified third-party providers as required to support our customer base. Revenues earned from the transportation and logistical services of LNG to our customers are included within LNG Product revenue.
Cryogenic Equipment Rental—Stabilis operates a fleet of mobile LNG storage and vaporization assets, including: transportation trailers, ISO containers, electric and gas-fired vaporizers, ambient vaporizers, storage tanks, and mobile vehicle fuelers. We also own several stationary storage and regasification assets. We believe this is one of the largest fleets of small-scale LNG equipment in North America. Our fleet consists primarily of trailer-mounted mobile assets, making delivery to and between customer locations more efficient. We deploy these assets on job sites to provide our customers with the equipment required to transport, store, and consume LNG in their operations. Revenues earned from cryogenic equipment rental are included within Rental revenue.
Engineering and Field Support Services—Stabilis has experience in the safe, cost effective, and reliable use of LNG in multiple customer applications. We have also developed many processes and procedures that we believe improve our customers’ use of LNG in their operations. Our engineers help our customers design and integrate LNG into their operations and our field service technicians help our customers mobilize, commission and reliably operate on the job site. Revenues earned from engineering and field support services are included within Service revenue.
Expanding Markets and Strategic Expansion Efforts
Multi-year On-site Power Generation for a Data Center
In February 2026, the Company executed a multi-year take-or-pay contract to supply LNG for behind-the-meter power generation for a world-leading provider of remote and temporary power generation at a data center. LNG deliveries are expected to commence during the first quarter of 2027 and continue through the first quarter of 2029. Total revenue under the initial multi-year term of the contract is estimated to be approximately $200 million. This contract represents the Company’s first contract in support of data center behind-the-meter power generation, consistent with the Company's strategic focus on growing, high-value vertical markets. The Company will receive $25.0 million in advance payments from the customer; of which, $15.0 million has been received to date. Advance payments will offset a percentage of each future invoice over the term of the contract, until fully offset, at which time the credit will cease. The Company may utilize the advance payments for the purchase of equipment, securing LNG supply and commissioning expenses incurred by the Company specific to the customer project. The portion of the $15.0 million that has not been utilized related to the customer project has been classified as restricted cash and cash equivalents. The full amount of the advance payment has been presented as deferred revenue on the Company's Condensed Consolidated Balance Sheet at March 31, 2026. See additional discussion in Note 1 and Note 6 of the Company’s Condensed Consolidated Financial Statements.
Proposed Galveston LNG Liquefaction Facility and Jones Act-compliant LNG Bunkering Vessel
In 2025, the Company announced development of a proposed new 350,000 gallon-per-day, waterfront LNG liquefaction facility in Galveston, Texas. The Company has entered into a ten-year LNG supply bunkering agreement, commencing in 2027, with a global marine cruise vessel operator to supply LNG for approximately 16% of the proposed project's planned capacity and to anchor development of the proposed facility. The Company continues to advance development of the facility and is engaged in discussions with multiple potential customers to secure the remaining offtake and to advance the project toward an expected Final Investment Decision ("FID") later in 2026. The total capital required for the project is estimated at $350 million to $400 million. The proposed Galveston LNG liquefaction facility is expected to be strategically located to support and expand the Company's marine bunkering services to additional marine markets. With the construction of the facility, the Company plans to commission a dedicated Jones Act-compliant LNG bunkering vessel to serve the Port of Galveston, Port of Houston and surrounding Gulf Coast markets. This vessel would transport LNG from the facility directly to customer vessels. Together, the proposed new LNG facility and new bunkering vessel are expected to create a fully integrated, last-mile LNG delivery solution for customers.
Leased Bunkering Vessel
The Company entered into a time charter agreement for the lease of a liquefied natural gas bunkering vessel, the Seaspan Garibaldi (the "Garibaldi"), for a period of two years. The time charter is classified as an operating lease and includes an option to lease the vessel for an additional year. The Company is pursuing plans to maximize utilization of the Garibaldi including subchartering the vessel.
U.S. Department of Energy ("DOE") Approval to Export LNG
In the third quarter of 2022, Stabilis received authorization from the DOE to export domestically produced LNG to all free trade ("FTA") and non-free trade ("non-FTA") countries, for up to 51.75 billion cubic feet per year (or approximately 1.0 MTPA) of natural gas equivalent. The authorization is for shipments of LNG and is for a term of 28 years with a remaining term of approximately 25 years under this authorization. In the third quarter of 2024, the Company met the initial time requirement to initiate exports to non-FTA countries. As of March 31, 2026, we have delivered LNG to Europe under this authorization. For exports to FTA countries, the Company has five years from the date it received the authorization with which to initiate exportation of LNG.
The DOE authorization received during the third quarter of 2022 supplements the Company's other existing import and export license from the DOE. Under this license, the Company is authorized to import and export LNG from and to Canada and Mexico, via truck. Additionally, effective September 2024, the Company can import LNG, by vessel, from various international sources to any LNG import terminal in the United States.
Geopolitical events in the Middle East with the U.S. and Iran conflict
Recent geopolitical developments in the Middle East, including the U.S. conflict with Iran, may contribute to an increase in energy related costs and related market uncertainties. The Company's customer pricing structure for natural gas is primarily based off a monthly index and may absorb most, if not all, of potential volatilities associated with the price of natural gas; however, there can be no assurance that the Company will not be adversely impacted by resulting energy cost and market uncertainties resulting from the Iran conflict. The Company continues to monitor the developments.
Results of Operations
Stabilis supplies LNG to multiple end markets in North America and provides turnkey fuel solutions to help users of propane, diesel and other crude-based fuel products convert to LNG.
Three Months Ended March 31, 2026 Compared to Three Months Ended March 31, 2025
During the fourth quarter of 2025, two multi-year customer contracts concluded in accordance with their terms. The completed contracts were for temporary remote power in Louisiana, and the Company’s truck-to-vessel LNG marine bunkering services in Galveston, Texas. The two contracts accounted for approximately 19% and 32% of 2025 revenues, respectively. As a result, the first quarter of 2026 results were lower for the period. The comparative tables below reflect our consolidated operating results for the three months ended March 31, 2026 (the “Current Quarter”) as compared to the three months ended March 31, 2025 (the “Prior Year Quarter”) (unaudited, amounts in thousands, except for percentages).
| Three Months Ended |
||||||||||||||||
| March 31, |
||||||||||||||||
| 2026 |
2025 |
$ Change |
% Change |
|||||||||||||
| Revenues: |
||||||||||||||||
| LNG Product |
$ | 8,697 | $ | 13,946 | $ | (5,249 | ) | (37.6 | ) | |||||||
| Increase / (decrease) in gallons delivered |
(5,275 | ) | n/a | |||||||||||||
| Rental |
857 | 1,550 | (693 | ) | (44.7 | ) | ||||||||||
| Service |
823 | 1,705 | (882 | ) | (51.7 | ) | ||||||||||
| Other |
2 | 137 | (135 | ) | (98.5 | ) | ||||||||||
| Total revenues |
10,379 | 17,338 | (6,959 | ) | (40.1 | ) | ||||||||||
| Operating expenses: |
||||||||||||||||
| Cost of revenues |
10,012 | 12,788 | (2,776 | ) | (21.7 | ) | ||||||||||
| Change in unrealized gain on natural gas derivatives |
— | (84 | ) | 84 | n/a | |||||||||||
| Selling, general and administrative expenses |
2,796 | 4,933 | (2,137 | ) | (43.3 | ) | ||||||||||
| Gain from disposal of fixed assets |
— | (103 | ) | 103 | n/a | |||||||||||
| Impairment |
71 | — | 71 | n/a | ||||||||||||
| Depreciation expense |
1,785 | 1,867 | (82 | ) | (4.4 | ) | ||||||||||
| Total operating expenses |
14,664 | 19,401 | (4,737 | ) | (24.4 | ) | ||||||||||
| Foreign joint venture operating related expenses |
(4,285 | ) | (2,063 | ) | (2,222 | ) | 107.7 | |||||||||
| Net equity income from foreign joint venture operations |
227 | 368 | (141 | ) | (38.3 | ) | ||||||||||
| Loss from operations |
(4,058 | ) | (1,695 | ) | (2,363 | ) | 139.4 | |||||||||
| Other income (expense): |
||||||||||||||||
| Interest income, net |
25 | 21 | 4 | 19.0 | ||||||||||||
| Other income (expense), net |
(37 | ) | (12 | ) | (25 | ) | 208.3 | |||||||||
| Total other income (expense) |
(12 | ) | 9 | (21 | ) | n/a | ||||||||||
| Net loss before income tax expense (benefit) |
(4,070 | ) | (1,686 | ) | (2,384 | ) | 141.4 | |||||||||
| Income tax expense (benefit) |
6 | (88 | ) | 94 | n/a | |||||||||||
| Net loss |
$ | (4,076 | ) | $ | (1,598 | ) | $ | (2,478 | ) | 155.1 | ||||||
Revenue
During the Current Quarter, revenues decreased $7.0 million, or 40%, compared to the Prior Year Quarter. The change in revenue primarily related to:
| ● |
Decreased gallons of LNG delivered in the Current Quarter due to the conclusion of two contracts, compared to the Prior Year Quarter resulting in a decrease in revenues of $5.7 million; and |
| ● |
Decreased rental, service and other revenues in the Current Quarter compared to the Prior Year Quarter, resulting in decreased revenues of $1.7 million. |
These decreases were partially offset by increased revenues of $0.4 million related to:
| ● |
Increased average natural gas prices in the Current Quarter compared to the Prior Year Quarter resulting in an increase in revenues of $0.3 million; and |
| ● |
Higher average pricing from a favorable customer mix in the Current Quarter compared to the Prior Year Quarter. |
Operating Expenses
Cost of revenues. Cost of revenues decreased $2.8 million, or 22%, compared to the Prior Year Quarter. As a percentage of revenue, these costs were 96% and 74% in the Current Quarter and the Prior Year Quarter, respectively. The change in cost of revenues was primarily attributable to:
| ● |
Decreased gallons of LNG delivered in the Current Quarter compared to the Prior Year Quarter resulting in a decrease in cost of revenues of $4.0 million |
The decrease was partially offset by increased cost of revenues of $1.2 million related to:
| ● |
Increased rental, service and other costs in the Current Quarter compared to the Prior Year Quarter resulting from the Company's time charter of a marine bunkering vessel in the Current Quarter; and |
| ● |
Increase in net transportation and liquefaction costs in the Current Quarter compared to the Prior Year Quarter resulting in increased cost of revenues of $0.4 million. |
Change in unrealized loss on natural gas derivatives. In the Prior Year Quarter, the Company had an unrealized gain of $0.1 million on change in unrealized gain on natural gas derivatives. The Company had no unrealized gain or loss in the Current Quarter, and did not hold any natural gas derivatives during the Current Quarter.
Selling, general and administrative expenses. Selling, general and administrative expenses decreased $2.1 million in the Current Quarter compared to the Prior Year Quarter. Mr. Ballard's severance related expenses accounted for $2.1 million in the Prior Year Quarter as well as higher compensation expense in the Prior Year Quarter related to incentive compensations and bonus.
Depreciation. Depreciation expense decreased $0.1 million during the Current Quarter as compared to the Prior Year Quarter primarily due to assets reaching the end of their depreciable lives.
Gain on disposal of assets. The Company recognized a gain on disposal of assets of $0.1 million in the Prior Year Quarter related to the sale of certain assets in which proceeds of $0.1 million were received. The Company did not have a gain or loss in the Current Year Quarter.
Impairment. The Company recognized impairment charges of $0.1 million in the Current Quarter related to contract costs from a cancelled contract.
Net equity income from foreign joint venture operations. Equity income from the Company's foreign joint venture decreased by $0.1 million in the Current Quarter compared to the Prior Year Quarter due to decreased net profits by the joint venture.
Interest income. Interest income, net was $25 thousand in the Current Quarter compared to $21 thousand in the Prior Year Quarter. In both periods, interest income, net related to interest earned on the Company's cash balances during the quarter.
Other income (expense). Other expense was $37 thousand during the Current Quarter compared to other income of $12 thousand in the Prior Year Quarter related to, in both periods, transactional foreign exchange gains (losses).
Income tax expense (benefit). The Company incurred state and foreign income tax expense of $6 thousand during the Current Quarter compared to income tax benefit of $0.1 million during the Prior Year Quarter. Income tax expense (benefit) for the Current Quarter and Prior Year Quarter primarily related to state income taxes. No U.S. federal income taxes were recorded for the Current Quarter or Prior Year Quarter as any net U.S. deferred tax assets generated from operating losses or used from operating income were offset by a change in the Company's valuation allowance on net deferred tax assets.
Liquidity and Capital Resources
The Company's principal sources of liquidity in the Current Quarter consisted of cash provided by our operations, cash on hand, and customer advance payments. The Company used its liquidity to invest in fixed assets to support growth, as well as to pay interest and principal amounts outstanding under our debt agreements.
As of March 31, 2026, we had $3.1 million in cash and cash equivalents on hand and $10.6 million in restricted cash, $29.3 million in outstanding debt (net of debt issuance costs) and operating lease obligations (of which $12.8 million is due in the next twelve months). The Company has availability under its debt agreements $3.5 million. The Company had no draw downs on its Revolving Credit Facility or its Secured Term Loan Facility during the three months ended March 31, 2026.
The Company is subject to substantial business risks and uncertainties inherent in the LNG industry and there is no assurance that the Company will be able to generate sufficient cash flows in the future to sustain itself or to support future growth. Management believes the business will generate sufficient cash flows from its operations along with availability under the Company's debt agreements to fund its ongoing business for the next twelve months. While we believe we have sufficient liquidity and capital resources to fund our ongoing operations and repay our debt, we will require additional capital to fund business expansion. Our current expansion efforts include the construction of the proposed Galveston LNG liquefaction facility and commencement of operations to service our multi-year data center power generation contract beginning in 2027 which will require engineering expenditures, additional equipment, rolling stock, commissioning and near-term working capital as the Company commissions operations.
As of March 31, 2026, the Company was in compliance with all financial covenants under its debt agreements. The Company’s efforts to expand its business include anticipated significant capital expenditures, the successful deployment of a marine bunkering vessel with a time charter, and a successful financing transaction associated with the proposed Galveston LNG liquefaction facility, all of which are yet to occur. The Company believes it is probable that it will continue to maintain compliance with its covenants, however, in the event the Company is unable to maintain minimum profitability in accordance with its forecast and historical trends, it is reasonably possible that the Company could fail to maintain compliance with its consolidated debt service ratio which, if not cured or waived, would give AmeriState Bank the right to accelerate repayment of outstanding borrowings under the AmeriState Secured Term Loan Facility, which totaled $6.9 million as of March 31, 2026. Such acceleration could adversely affect our liquidity, our ability to continue expansion efforts and continue normal operations.
We will continue to monitor covenant compliance closely and evaluate additional actions which may include reducing discretionary capital expenditures, delaying certain growth initiatives, or seeking alternative sources of financing if needed. The Company believes that its relations with its lenders are good and that a waiver could be obtained in the event a violation occurred; however, there can be no assurance that additional actions taken by the Company, if required, could prevent a possible covenant violation or that the Company would be successful in obtaining a covenant waiver in the event a covenant violation occurred.
Cash Flows
Cash flows provided by (used in) our operating, investing and financing activities are summarized below (unaudited, in thousands):
| Three Months Ended March 31, |
||||||||
| 2026 |
2025 |
|||||||
| Net cash provided by (used in): |
||||||||
| Operating activities |
$ | 12,417 | $ | 1,025 | ||||
| Investing activities |
(5,268 | ) | (276 | ) | ||||
| Financing activities |
(889 | ) | (730 | ) | ||||
| Effect of exchange rate changes on cash |
(1 | ) | (3 | ) | ||||
| Net increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents |
6,259 | 16 | ||||||
| Cash, cash equivalents and restricted cash and cash equivalents, beginning of period |
7,459 | 8,987 | ||||||
| Cash, cash equivalents and restricted cash and cash equivalents, end of period |
$ | 13,718 | $ | 9,003 | ||||
Operating Activities
Net cash provided by operating activities totaled $12.4 million for the three months ended March 31, 2026 compared to $1.0 million for the same period in 2025. The increase in net cash provided by operating activities of $11.4 million as compared to the Prior Year Quarter was attributable to a $15.0 million advance payment received on the multi-year data center power generation contract to begin in the first quarter of 2027. The prepayment represents deferred revenue and is classified in restricted cash. The $15.0 million cash prepayment was partially offset by the higher net loss for the three months ended March 31, 2026 compared to the same period in 2025.
Investing Activities
Net cash used in investing activities totaled $5.3 million for the three months ended March 31, 2026 compared to $0.3 million for the three months ended March 31, 2025. The increase in net cash used in investing activities in the Current Quarter of $5.0 million was primarily due to cash paid for capital expenditures to support growth.
Financing Activities
Net cash used in financing activities totaled $0.9 million for the three months ended March 31, 2026, compared to $0.7 million for the three months ended March 31, 2025. The increase in cash used in financing activities in the Current Quarter compared to the Prior Year Quarter is due to additional debt payments on the AmeriState Loan, payment of a lease purchase option related to asset finance leases, and payment of additional debt issuance cost.
Future Cash Requirements
We require cash to fund our operating expenses and working capital requirements, including costs associated with gas purchases, capital expenditures, debt repayments, equipment purchases, maintenance of LNG production facilities, mergers and acquisitions (if any), pursuing market expansion, supporting sales and marketing activities and other general corporate purposes. We believe we have sufficient liquidity and capital resources to fund our operations and repay our debt.
Our current expansion efforts include the construction of the proposed new Galveston LNG liquefaction facility and Jones Act-compliant marine bunkering vessel and the commencement of operations for the multi-year data center power generation contract beginning in 2027 (discussed below). We may elect to pursue additional financing activities such as refinancing existing debt, obtaining new debt, or debt or equity offerings to provide flexibility with our cash management. Certain of these alternatives may require the consent of current lenders or stockholders, and there is no assurance that we will be able to execute any of these alternatives on acceptable terms or at all.
Capital expenditures for the three months ended March 31, 2026 were $5.3 million and primarily related to the preliminary work and ordering long lead time items, related to the Company's proposed new Galveston LNG liquefaction facility and Jones Act-compliant marine bunkering vessel, and its multi-year data center power generation contract. Capital expenditures also related to refurbishments and upgrades to existing assets and rolling stock. Other future capital expenditures will be dependent upon business needs, value-adding investment opportunities, as well as the availability of additional capital at favorable terms which is difficult to predict. At March 31, 2026, the Company had open purchase orders and commitments related to capital expenditures of approximately $3.7 million and the Company continues to advance the proposed new Galveston LNG liquefaction facility and Jones Act-compliant marine bunkering vessel, and scale for its multi-year data center power generation contract. See additional discussion regarding the Company's potential expansion efforts below.
Expansion Efforts
Multi-year, On-site Power Generation for a Data Center
In February 2026, the Company executed a multi-year take-or-pay data center power generation contract. LNG deliveries are expected to commence during the first quarter of 2027 and continue through the first quarter of 2029. The supply agreement will require investment of approximately $25.0 million in capital additions and working capital needed to secure LNG supply and fund the commissioning of the project. The Company received an advance payment of $15.0 million during February 2026, and expects an additional $10.0 million during the next six months.
Proposed New Galveston LNG Liquefaction Facility and Jones Act-compliant Bunkering Vessel
The Company continues to advance its proposed Galveston liquefaction facility along with a Jones Act-compliant LNG bunkering vessel toward an expected FID later in 2026. The Company has secured customer commitments for approximately 16% of the project’s proposed 350,000 gallons-per-day capacity and remains engaged in discussions with multiple potential customers to secure the remaining offtake. Total investment in the Company’s proposed Galveston liquefaction facility is estimated at $350 million to $400 million. The financing and structure of the proposed Galveston liquefaction facility is anticipated to be in the form of a separate entity with a combination of third-party equity and debt that would be nonrecourse to the Company. The Company does not intend to commit to the use of significant additional funds related to the proposed Galveston LNG liquefaction facility without first securing the financing. There is no guarantee that additional financing will be available or available at terms that would be beneficial to the Company.
Leased Bunkering Vessel
The Company entered into a time charter agreement for the lease of a liquefied natural gas bunkering vessel, the Seaspan Garibaldi, for a period of two years commencing in 2026. The time charter is classified as an operating lease and includes an option to lease the vessel for an additional year. The Company is pursuing plans to maximize utilization of the Garibaldi including subchartering the vessel.
Shelf Registration Statement
The Company filed a registration statement on Form S-3 (the "Shelf Registration"), which was declared effective on March 26, 2026. The Shelf Registration is for a period of three years, expiring on March 25, 2029, and permits the Company to issue up to $100.0 million (subject the limitations described below) in either common stock, preferred stock, warrants or a combination of the above. On April 17, the Company filed a prospectus supplement to the Shelf Registration pursuant to which the Company may offer and sell shares of common stock directly to the public “at the market” (the "ATM") as permitted in Rule 415 under the Securities Act pursuant to an Equity Distribution Agreement entered into between the Company and Johnson Rice & Company L.L.C., as sales agent. The Company is subject to General Instruction I.B.6. of Form S-3 that limits the amount of securities that the Company may sell under the Shelf Registration to no more than one-third of the Company’s public float (currently $10.2 million) in any twelve-month period. The Company has made no issuances under the Shelf Registration and related ATM at March 31, 2026.
Off-Balance Sheet Arrangements
As of March 31, 2026, we had no transactions that met the definition of off-balance sheet arrangements that have or are reasonably likely to have a current or future material effect on our consolidated financial position, operating results, liquidity, cash requirements or capital resources.
Critical Accounting Policies and Estimates
The discussion and analysis of our financial condition and results of operations are based on our Condensed Consolidated Financial Statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) which requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities known to exist at the date of the Condensed Consolidated Financial Statements and the reported amounts of revenues and expenses during the reporting period. We evaluate our estimates on an ongoing basis, based on historical experience and on various other assumptions that are believed to be reasonable under the circumstances. There can be no assurance that actual results will not differ from those estimates. There have been no significant changes in the Company's “Critical Accounting Policies and Estimates” during the three months ended March 31, 2026 from those disclosed within the Company's Annual Report on Form 10-K for the year ended December 31, 2025 as filed with the SEC on March 5, 2026.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
As a “smaller reporting company,” the Company is not required to provide this information.
ITEM 4. CONTROLS AND PROCEDURES.
Evaluation of Disclosure Controls and Procedures
As required by Rule 13a-15(b) of the Exchange Act, we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. Based upon the evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were effective at March 31, 2026.
Changes in Internal Control over Financial Reporting
There have been no changes in our internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during our last fiscal quarter that have materially affected or are reasonably likely to materially affect our internal control over financial reporting.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
The Company becomes involved in various legal proceedings and claims in the normal course of business. In management’s opinion, the ultimate resolution of these matters will not have a material effect on our financial position or results of operations.
ITEM 1A. RISK FACTORS.
Our operations and financial results are subject to various risks and uncertainties, including those described in the Part I. “Item 1A. Risk Factors” section of our Annual Report on Form 10-K for the year ended December 31, 2025 filed with the SEC on March 5, 2026 (“Form 10-K”), which could adversely affect our business, financial condition, results of operations, cash flows, and the trading price of our common stock. During the three months ended March 31, 2026, there have been no material changes in our risk factors disclosed in our 2025 Form 10-K; except for the addition of the following risk factors.
Geopolitical events in the Middle East with the U.S. and Iran conflict could have some adverse impact on our business and results of operations
Recent geopolitical developments in the Middle East, including the U.S. conflict with Iran, may contribute to an increase in energy related costs and related market uncertainties. The Company's pricing structure related to LNG product revenues may absorb most, if not all, of potential volatilities associated with the price of natural gas. However, failure to absorb the full impact of any price increases could adversely impact the Company's business and results of operations. The Company continues to monitor the risk associated with the Middle East conflicts.
Failure to secure additional off-take from the proposed Galveston LNG liquefaction facility, could adversely affect the Company's ability to secure financing for the project
Financing for the proposed new Galveston LNG liquefaction facility may be based on having firm contractual LNG off-take from the facility prior to closing on the financing. Failure to obtain additional contractual off-take could prevent the Company from being able to finance the project, adversely impacting potential profits, results of operations, cash flows and financial condition.
ITEM 5. OTHER INFORMATION.
of the Company's officers or directors adopted, modified or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the Company's fiscal quarter ended March 31, 2026, as such terms are defined under Item 408(a) of Regulation S-K.
ITEM 6. EXHIBITS.
(a) Index to Exhibits
| 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 February 25, 2025) |
|
| 10.1 | *First Amending Agreement (dated February 6, 2026) to Time Charter Agreement, dated December 12, 2025, by and between the Registrant with Seaspan Energy Ltd. | |
| 10.2 | *Second Amending Agreement (dated March 19, 2026) to Time Charter Agreement, dated December 12, 2025, by and between the Registrant with Seaspan Energy Ltd. | |
| 10.3 | *Third Amending Agreement (dated March 24, 2026) to Time Charter Agreement, dated December 12, 2025, by and between the Registrant with Seaspan Energy Ltd. | |
| 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). |
* Filed herewith
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Date: May 6, 2026 |
||
| STABILIS SOLUTIONS, INC. |
||
| By: |
/s/ J. Casey Crenshaw |
|
| J. Casey Crenshaw |
||
| Interim President, Chief Executive Officer and Director (Principal Executive Officer) |
||
| By: |
/s/ Andrew L. Puhala |
|
| Andrew L. Puhala |
||
| Chief Financial Officer (Principal Financial Officer) |
||