8-K
Koil Energy Solutions, Inc. (KLNG)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15 (d) ofthe
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
November4, 2024
KOIL
ENERGY SOLUTIONS, INC.
(Exact name of registrant as specified in itscharter)
| Nevada | 000-30351 | 75-2263732 |
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| (State or other jurisdiction<br><br> <br>of incorporation) | (Commission File Number) | (I.R.S. Employer<br><br> <br>Identification No.) |
1310Rankin Road, Houston, TX 77073
(Address of principal executive offices) (Zip Code)
(281) 517-5000
Registrant’s telephone number, including area code
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
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| Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934. |
Emerging growth company ☐
| If an emerging growth company, indicate by check mark if the registrant<br>has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant<br>to Section 13(a) of the Exchange Act. ☐ |
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SECTION 2 – FINANCIAL INFORMATION
| ITEM 2.02 | Results of Operations and Financial Condition. |
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On November 4, 2024, Koil Energy Solutions, Inc. issued a press release announcing its financial results for the three and nine months ended September 30, 2024. A copy of the press release is furnished as Exhibit 99.1 to this report and is incorporated herein by reference.
SECTION 9 – FINANCIAL STATEMENTS AND EXHIBITS
| ITEM 9.01 | Financial Statements and Exhibits. |
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(d) Exhibits:
| 99.1 | Press Release issued by Koil Energy<br> Solutions, Inc. dated November 4, 2024 |
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| 104 | Cover Page Interactive Data File (formatted in Inline XBRL in Exhibit<br>101). |
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SIGNATURE
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: November 4, 2024
| KOIL ENERGY SOLUTIONS, INC. | |
|---|---|
| By: | /s/ Erik Wiik |
| Erik Wiik | |
| President and Chief Executive Officer |
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Exhibit 99.1
KoilEnergy Solutions, Inc. Announces Third Quarter 2024 Results
Third Quarter Highlights
| · | Revenues of $5.2 million increased 27% year-over-year |
|---|---|
| · | Gross profit of $2.1 million increased 50% year-over-year |
| · | Net income of $523 thousand increased $666 thousand<br>year-over-year |
| · | Adjusted EBITDA of $675 thousand increased $658<br>thousand year-over-year |
Houston, TX – November 4, 2024 – Koil Energy Solutions, Inc. (OTCQB: KLNG) (“KOIL”, or the “Company”), a specialist in deepwater production and distribution equipment and services, today reported results for the three and nine months ended September 30, 2024.
KOIL at a Glance:
| Share Price†: | $1.75 | Cash*: | $3.1M |
|---|---|---|---|
| 52-Week Range†: | $0.42 - $1.98 | Book Value*: | $7.9M |
| Shares Out.†: | 12.2M | Price / Book Value: | 2.7x |
| Market Cap†: | $21.3M | TTM Revenue: | $20.8M |
| *As of 09/30/24;<br><br> <br>†As of 11/01/24 |
“We delivered another quarter of robust performance, highlighted by year-over-year growth,” said Erik Wiik, President and CEO of KOIL. “Compared to the third quarter of last year, revenue grew 27%, gross margin increased to 40%, and adjusted EBITDA improved from a loss to a margin of 13%, all driven by our proactive growth strategy. These efforts have produced an earnings per share of $0.17, year-to-date.
“Our clients consistently provide positive feedback on our team’s performance, and we remain dedicated to maintaining this sentiment. I want to extend my heartfelt thanks to our employees, because we would not be able to achieve these results without their unwavering commitment to delivering exceptional quality while we continue to grow this remarkable company. Let me also offer my thanks to our shareholders, for their continued interest in the great investment opportunity that is KOIL Energy.”
Operating Results
KOIL’s revenues for the three months ended September 30, 2024 (“Q3 2024”) increased 27 percent to $5.2 million compared to $4.1 million for the three months ended September 30, 2023 (“Q3 2023”), primarily due to an increase in fixed price contracts for the manufacture of subsea distribution equipment.
Gross profit for Q3 2024 was $2.1 million, or 40 percent of revenues, compared to Q3 2023 gross profit of $1.4 million, or 33 percent of revenues. The comparative increase in Q3 2024 gross profit was primarily driven by increased revenues and improved project margins.
Selling, general and administrative expenses (“SG&A”) were $1.6 million, or 30 percent of revenues, in Q3 2024 and remained steady when compared to Q3 2023.
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Due to the factors discussed above, KOIL reported Q3 2024 net income of $523 thousand, or $0.04 per diluted share, compared to a Q3 2023 net loss of $143 thousand, or a $0.01 loss per diluted share. Per share results for Q3 2024 and Q3 2023 are based on 12.41 million and 11.89 million weighted average shares outstanding, respectively.
KOIL reported adjusted EBITDA of $675 thousand in Q3 2024 compared to adjusted EBITDA of $17 thousand in Q3 2023. The comparative increase in adjusted EBITDA for Q3 2024 was primarily driven by growth in revenues and gross profit stemming from an increase in product-oriented, fixed-price projects in Q3 2024 as compared to Q3 2023.
Financial Position
At September 30, 2024, working capital totaled $4.9 million, which includes cash of $3.1 million and net receivables of $5.3 million. This is compared to $2.6 million of working capital at December 31, 2023, which includes cash of $2.0 million and receivables of $4.2 million. Shareholders’ equity totaled $7.9 million, or approximately $0.65 per common share, at September 30, 2024, compared to $5.6 million, or approximately $0.47 per common share, at the beginning of the year. The Company maintains access to a factoring arrangement with Amegy Bank Business Credit and at September 30, 2024, had no factored invoices outstanding with Amegy.
Conference Call Details
| Call Dial-in: | 1-833-630-1956 for domestic callers |
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| 1-412-317-1837 for international callers | |
| Webcast/Replay URL: | https://edge.media-server.com/mmc/p/kzxfna26 |
The earnings release and a replay of the conference call will be available on the Company’s website, www.koilenergy.com, under the “Investors” section. An investor presentation will also be posted on our webpage following this press release.
About KOIL (www.koilenergy.com)
KOIL is a leading energy services company offering subsea equipment and support services to the world’s energy and offshore industries. We provide innovative solutions to complex customer challenges presented between the production facility and the energy source. Our core services and technological solutions include distribution system installation support and engineering services, umbilical terminations, loose-tube steel flying leads, and related services. Additionally, KOIL’s experienced team can support subsea engineering, manufacturing, installation, commissioning, and maintenance projects located anywhere in the world.
Forward-Looking Statements
Any forward-looking statements in the preceding paragraphs of this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that such forward-looking statements involve risks and uncertainties in that actual results may differ materially from those projected in the forward-looking statements. In the course of operations, we are subject to certain risk factors, competition and competitive pressures, sensitivity to general economic and industrial conditions, international political and economic risks, availability and price of raw materials and execution of business strategy. For further information, please refer to the Company's filings with the Securities and Exchange Commission, copies of which are available from the Company without charge.
Investor Relations:
Trevor Ashurst
ir@koilenergy.com
281-862-2201
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KOIL ENERGY SOLUTIONS, INC.
SUMMARY FINANCIAL DATA
(UNAUDITED)
Comparative Condensed Consolidated Income Statement
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands, except per share amounts) | 2024 | 2023 | 2024 | 2023 | ||||||||
| Revenues | $ | 5,223 | $ | 4,107 | $ | 16,793 | $ | 11,338 | ||||
| Cost of sales | 3,159 | 2,733 | 10,449 | 7,174 | ||||||||
| Selling, general and administrative | 1,586 | 1,582 | 4,316 | 4,887 | ||||||||
| Operating income (loss) | 478 | (208 | ) | 2,028 | (723 | ) | ||||||
| Total other (income) expense | (47 | ) | (68 | ) | (62 | ) | (58 | ) | ||||
| Income (loss) before income tax expense | 525 | (140 | ) | 2,090 | (665 | ) | ||||||
| Income tax expense | 2 | 3 | 7 | 8 | ||||||||
| Net income (loss) | $ | 523 | $ | (143 | ) | $ | 2,083 | $ | (673 | ) | ||
| Net income (loss) per share, basic | $ | 0.04 | $ | (0.01 | ) | $ | 0.17 | $ | (0.06 | ) | ||
| Weighted-average shares outstanding, basic | 12,199 | 11,888 | 12,235 | 11,888 |
Comparative Condensed Consolidated Balance Sheets
| September 30, | December 31, | |||
|---|---|---|---|---|
| (In thousands) | 2024 | 2023 | ||
| Assets: | ||||
| Cash | $ | 3,120 | $ | 2,030 |
| Other current assets | 6,720 | 5,819 | ||
| PP&E, net | 2,699 | 2,968 | ||
| Other non-current assets | 6,047 | 6,245 | ||
| Total assets | $ | 18,586 | $ | 17,062 |
| Liabilities: | ||||
| Current liabilities | $ | 4,945 | $ | 5,284 |
| Other long-term liabilities | 5,751 | 6,160 | ||
| Total liabilities | 10,696 | 11,444 | ||
| Stockholders' equity | 7,890 | 5,618 | ||
| Total liabilities and stockholders' equity | $ | 18,586 | $ | 17,062 |
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KOIL ENERGY SOLUTIONS, INC.
SUMMARY FINANCIAL DATA, CONTINUED
(UNAUDITED)
Adjusted EBITDA
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||
| Net income (loss) | $ | 523 | $ | (143 | ) | $ | 2,083 | $ | (673 | ) | ||
| Deduct: Interest income, net | (17 | ) | (7 | ) | (30 | ) | (3 | ) | ||||
| Add: Income tax expense | 2 | 3 | 7 | 8 | ||||||||
| Add: Depreciation and amortization | 144 | 155 | 437 | 461 | ||||||||
| Add: Share-based compensation | 23 | 9 | 76 | 49 | ||||||||
| Add (Deduct): Loss (gain) on sale of asset | – | – | 3 | (2 | ) | |||||||
| Add: Relocation costs | – | – | – | 9 | ||||||||
| Adjusted EBITDA | $ | 675 | $ | 17 | $ | 2,576 | $ | (151 | ) |
Cash Flow Data
| Three Months Ended September 30, | Nine Months Ended September 30, | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
| (In thousands) | 2024 | 2023 | 2024 | 2023 | ||||||||
| Cash provided by (used in): | ||||||||||||
| Operating activities | $ | 1,927 | $ | (971 | ) | $ | 1,171 | $ | (733 | ) | ||
| Investing activities | (65 | ) | (148 | ) | (127 | ) | (228 | ) | ||||
| Financing activities | (201 | ) | (96 | ) | 46 | (260 | ) | |||||
| Change in cash | $ | 1,661 | $ | (1,215 | ) | $ | 1,090 | $ | (1,221 | ) |
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