Form 8-K - Current report

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

 

FORM 8-K

 

 

 

CURRENT REPORT

Pursuant to Section 13 or 15 (d) of the

Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported)

May 6, 2024

 

KOIL ENERGY SOLUTIONS, INC.

(Exact name of registrant as specified in its charter)

 

 

 

Nevada		000-30351		75-2263732
(State or other jurisdiction of incorporation)		(Commission File Number)		(I.R.S. Employer Identification No.)

 

1310 Rankin Road, Houston, TX 77073

(Address of principal executive offices) (Zip Code)

 

[phone]

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)

 

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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 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. ☐

 

 

 

 

 

SECTION 2 – FINANCIAL INFORMATION

 

ITEM 2.02

Results of Operations and Financial Condition.

 

On May 6, 2024, Koil Energy Solutions, Inc. issued a press release announcing its financial results for the quarter ended March 31, 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.

 

(d) Exhibits:

 

99.1	Press Release issued by Koil Energy Solutions, Inc. dated May 6, 2024
104	Cover Page Interactive Data File (formatted in Inline XBRL in Exhibit 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: May 6, 2024

 

	KOIL ENERGY SOLUTIONS, INC.
	By:	/s/ Erik Wiik
		Erik Wiik
		President and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3

 

Exhibit 99.1

 

 

Koil Energy Solutions, Inc. Announces First Quarter 2024 Results

 

	·	Revenues of $5.8 million increased 56% year-over-year
	·	Gross profit of $2.0 million increased 24% year-over-year
	·	Net income of $0.6 million increased $0.7 million year-over-year
	·	Adjusted EBITDA of $0.7 million increased $0.6 million year-over-year
	·	First delivery of our new 20,000 psi multi-quick-connect plate for application in deepwater Gulf of Mexico

 

Houston, TX – May 6, 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 quarter ended March 31, 2024.

 

KOIL at a Glance:

 

Share Price†:	$0.49	Cash*:	$2.0M
52-Week Range†:	$0.42 - $0.69	Book Value*:	$6.2M
Shares Out.†:	12.0M	Price / Book Value:	0.9x
Market Cap†:	$5.9M	TTM Revenue:	$17.4M
*As of 03/31/24; †As of 05/03/24

 

“The team achieved significant revenue and gross profit growth during the first quarter,” said Erik Wiik, President and CEO of KOIL. “We are off to a great start in 2024, with exceptional results reflecting strong execution and accelerating results from growth initiatives. Year-over-year sales growth of 56% was accompanied by continued strong order intake during the quarter. As previously communicated, we also won a major contract in April for delivery and installation of subsea safety control systems to an international energy company.

 

”Our growth strategy is delivering results, and we remain committed to further expanding our capacity as well as increasing our presence in faster-growing, international markets.

 

“We are a focused subsea controls technology provider. We manufacture engineer-to-order products, combined with highly responsive service support, to solve our customers’ deepwater challenges and keep their wells producing. This is mission-critical technology with high barriers to entry.

 

“While most of our growth can be attributed to repeat orders from satisfied customers, we have also increased the number of key accounts. I am confident that our continued progress will enable us to create long-term value for our customers, shareholders, and employees.”

 

Operating Results

 

KOIL’s revenues for the three months ended March 31, 2024 (“Q1 2024”) increased 56 percent to $5.8 million compared to $3.7 million for the three months ended March 31, 2023 (“Q1 2023”), primarily due to an increase in product-oriented, fixed price contracts.

 

Gross profit for Q1 2024 was $2.0 million, or 35 percent of revenues, compared to Q1 2023 gross profit of $1.6 million, or 44 percent of revenues. The comparative increase in Q1 2024 gross profit was primarily driven by increased revenues, while the decline in Q1 2024 gross profit as a percentage of revenue reflects higher materials costs associated with the increase in fixed price contracts.

 

 

 

1

 

 

Selling, general and administrative expenses (“SG&A”) were $1.5 million, or 25 percent of revenues, in Q1 2024 compared to $1.7 million, or 47 percent of revenues, in Q1 2023. SG&A in Q1 2024 reflected lower administrative payroll expense, advertising expense, research and development expense, and rental expense related to the Company’s short-term lease for office furniture.

 

Due to the factors discussed above, KOIL reported Q1 2024 net income of $0.6 million, or $0.05 per diluted share, compared to a Q1 2023 net loss of $0.1 million, or a $0.01 loss per diluted share. Per share results for Q1 2024 and Q1 2023 are based on 12.02 million and 11.89 million weighted average shares outstanding, respectively.

 

KOIL reported adjusted EBITDA of $0.7 million in Q1 2024 compared to adjusted EBITDA of $0.1 million in Q1 2023. The comparative increase in adjusted EBITDA for Q1 2024 was primarily driven by growth in revenues and gross profit stemming from an uptick in product-oriented, fixed-price projects in Q1 2024 as compared to Q1 2023.

 

Financial Position

 

At March 31, 2024, working capital totaled $3.3 million, which includes cash of $2.0 million and net receivables of $3.9 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 $6.2 million, or approximately $0.52 per common share, at March 31, 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 the balance of accounts receivable sold to the bank as of March 31, 2024 was $332.

 

Conference Call

 

KOIL will not be hosting an investor conference call to review its Q1 2024 results. However, we will post an investor presentation on our webpage following this press release. We encourage investors to make contact and will arrange individual meetings as appropriate.

 

About Koil Energy Solutions, Inc. (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

[e-mail]

281-862-2201

 

 

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KOIL ENERGY SOLUTIONS, INC.

SUMMARY FINANCIAL DATA

(UNAUDITED)

 

 

Comparative Condensed Consolidated Income Statement

		Three Months Ended March 31,
(In thousands, except per share amounts)		2024				2023
Revenues		$	5,791			$	3,724
Cost of sales			3,761				2,081
Selling, general and administrative			1,460				1,738
Operating income (loss)			570				(95	)
Total other (income) expense			(9	)			1
Income (loss) before income tax expense			579				(96	)
Income tax expense			3				1
Net income (loss)		$	576			$	(97	)
Net income (loss) per share, basic		$	0.05			$	(0.01	)
Weighted-average shares outstanding, basic			11,971				11,888

 

 

 

 

Comparative Condensed Consolidated Balance Sheets

		March 31,				December 31,
(In thousands)		2024				2023
Assets:
Cash		$	1,978			$	2,030
Other current assets			7,163				5,819
PP&E, net			2,849				2,968
Other non-current assets			6,094				6,245
Total assets		$	18,084			$	17,062
Liabilities:
Current liabilities			5,841				5,284
Other long-term liabilities			6,030				6,160
Total liabilities			11,871				11,444
Stockholders' equity			6,213				5,618
Total liabilities and stockholders' equity		$	18,084			$	17,062

 

 

 

3

 

 

KOIL ENERGY SOLUTIONS, INC.

SUMMARY FINANCIAL DATA, CONTINUED

(UNAUDITED)

 

 

Adjusted EBITDA

		Three Months Ended March 31,
(In thousands)		2024				2023
Net income (loss)		$	576			$	(97	)
(Deduct) Add: Interest (income) expense, net			(8	)			2
Add: Income tax expense			3				1
Add: Depreciation and amortization			144				152
Add: Share-based compensation			19				24
Deduct: Gain on sale of asset			–				(1	)
Add: Relocation costs			–				9
Adjusted EBITDA		$	734			$	90

 

 

Cash Flow Data

		Three Months Ended March 31,
(In thousands)		2024				2023
Cash provided by (used in):
Operating activities		$	(307	)		$	(674	)
Investing activities			(10	)			(78	)
Financing activities			265				(82	)
Change in cash		$	(52	)		$	(834	)

 

 

 

 

 

 

 

 

 

 

 

 

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Cover	May 06, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	May 06, 2024
Entity File Number	000-30351
Entity Registrant Name	KOIL ENERGY SOLUTIONS, INC.
Entity Central Index Key	0001110607
Entity Tax Identification Number	75-2263732
Entity Incorporation, State or Country Code	NV
Entity Address, Address Line One	1310 Rankin Road
Entity Address, City or Town	Houston
Entity Address, State or Province	TX
Entity Address, Postal Zip Code	77073
City Area Code	(281)
Local Phone Number	517-5000
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Entity Emerging Growth Company	false

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