Koil Energy Solutions, Inc. (OTC:KLNG)

Koil Energy Solutions, Inc. (OTCQB:KLNG) ($2.25; $27.9M market cap) announced Q1 2025 results:

• Q1 2025 sales of $5.3 million vs. $5.8 million in the prior year
• Q1 2025 EPS of $(0.00) vs. $0.05 in the prior year

"After four consecutive quarters of stellar performance, these results fell short of our expectations. We increased our base cost structure in response to last year’s elevated revenue levels, without adequately accounting for the inherent volatility in fixed-price contracts. We always knew our growth journey would have its ups and downs, and while this quarter presented a challenge, it reinforces our commitment to carefully building sustainable momentum and delivering long-term value to our shareholders.”

"Our team will remain focused on growing the company and delivering on our growth strategy. We are excited to see that two-thirds of the recent growth in service contracts was tied to the installation of the equipment we built last year, affirming the success of our bundling strategy. Order intake and bidding activity have picked up significantly, and we believe this momentum will continue throughout 2025."

"In the coming quarters we will focus on sharpening our financial execution, driving higher utilization across our workforce, managing working capital with discipline, and ensuring that our growth investments are appropriately scaled and timed."

"KOIL Energy remains a great investment opportunity! We offer mission-critical deepwater solutions with a high barrier to market entry. KOIL Energy is a fast-growing company with a strong foundation and no long-term debt."

Koil Energy Solutions, Inc. provides engineering, equipment, and support services for offshore energy operations, specializing in subsea system design, installation, maintenance, and hardware products for energy and maritime industry clients.

Koil Energy Solutions, Inc. (OTCQB:KLNG) ($1.75; $23.2M market cap) announced Q3 2024 results:

• Sales of $5.2 million vs $4.1 million in the prior year
• EPS of $0.04 vs a loss of $0.01 in the prior year

“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.”

Although this was the weakest quarter so far in 2023, revenues remained above the critical $5 million threshold, and the company was able to report earnings of $0.04. Notably, the company recently announced a significant contract win expected to be completed in the first quarter of 2025. As previously communicated, we anticipate quarterly results to be somewhat unpredictable, though they should stabilize as the company progresses through its restructuring process. This restructuring includes expanding the product and service offerings to customers, such as maintenance projects.

Koil Energy Solutions' core services and technological solutions include distribution system installation support and engineering services, umbilical terminations, loose-tube steel flying leads, and related services

Open Forum Focus Model Portfolio Holding Koil Energy Solutions, Inc. (OTCQB:KLNG) announced a significant contract to provide maintenance services on an offshore platform for an international oil and gas company.

“Planning, engineering, and procurement activities have already commenced at KOIL's facility in Houston, TX, with the offshore maintenance work projected to be completed in the first quarter of 2025.”

We think the company is ridiculously cheap. However, the key for unlocking value will be in the ability of management to reduce quarterly lumpiness by securing more projects that have recurring revenue.

As a reminder, Open Forum Model portfolio holdings are stocks reiterated via Open Forums as some of the very highest conviction picks in our coverage universe.

Koil Energy Solutions' core services and technological solutions include distribution system installation support and engineering services, umbilical terminations, loose-tube steel flying leads, and related services