Koil Energy Solutions (KLNG) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenues reached $5.2 million, up 27% year-over-year, driven by increased fixed price contract activity in subsea distribution equipment manufacturing.

• Net income for Q3 2024 was $523 thousand, reversing a net loss of $143 thousand in Q3 2023, marking a $1.4 million year-over-year improvement.

• Adjusted EBITDA for Q3 2024 was $675 thousand, a significant increase from $17 thousand in Q3 2023.

• Free cash flow for the quarter was $1 million, and cash at quarter-end stood at $3.1 million.

• Growth was supported by proactive strategy, new contract awards, and expansion into new markets.

Financial highlights

• Gross profit for Q3 2024 was $2.1 million (40% margin), up from $1.4 million (33% margin) year-over-year.

• SG&A expenses remained steady at $1.6 million for Q3 2024, or 30% of revenues.

• Earnings per share for Q3 2024 was $0.04, compared to a loss of $0.01 per share in Q3 2023.

• Working capital at September 30, 2024, was $4.9 million, up from $2.6 million at year-end 2023.

• Cash position increased to $3.1 million from $2.0 million at year-end 2023.

Outlook and guidance

• Deferred revenue from delayed projects expected to be recognized in Q4 2024, with some project revenue extending into 2025.

• Management anticipates continued strong demand for offshore oil production equipment, supported by global oil demand growth forecasts for 2024 and 2025.

• Focus remains on maintaining high revenue and profit levels despite quarterly fluctuations and expanding into international and offshore renewable markets.

• Targeted efforts underway to increase wallet share with existing clients and pursue strategic partnerships.

• International expansion includes new leadership in Brazil and a growing pipeline in South America.