KLNG - Earnings call transcript Q3 2024 | Koil Energy Solutions, Inc.

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Operator

Good morning, ladies and gentlemen. Thank you for standing by. Welcome to Koil Energy's Third Quarter 2024 Conference Call. [Operator Instructions] As a reminder, this call is being recorded today, Monday, November 4, 2024. A detailed disclaimer related to Koil Energy's forward-looking statements is included in the press release issued Monday morning and filed with the SEC. It is also available on the company's website, koilenergy.com, or upon request. A reconciliation of non-GAAP financial measures used in the press release and on today's call is included in the press release and on the website. to only reliance made. as not statements, these cautioned speak which of are place on undue forward-looking Listeners the date Energy to events obligation forward-looking no I'd like date also any the time, Wiik. Koil its call turn of over made. At to this statements Erik circumstances or revise reflect to after CEO, the to undertakes go Please ahead.

Erik Wiik

our of Good ongoing update briefing, I'll this us today. morning, In and ladies and initiatives. performance an strategic gentlemen. our overview Thank you quarter you on for joining third provide

my Trevor will deliver Following financial detailed performance. a our review, analysis of

Next, I'll for road Koil provide future an and positioned strategic update of is map our growth. how

Finally, robust a proactive Compared increased to I'll EBITDA may of performance, you highlighted last questions the third by improved adjusted growth from strategy. quarter and a answer of revenue margin be to a gross happy of grew year-over-year XX%, any by to quarter have. We XX%. delivered year, and margin another growth loss XX% to driven

strong our price falls quarter-over-quarter is crucial consistent growth projects machining a and our as supply capacity growth chain caused generated percent far outcome $X internal million. Despite flow cash from aim of by especially on due by at was so strategy. of adequate XX% expanding to to demonstrate the revenue of QX overall fixed at to increase our delayed suppliers. POC, bit given expectations lower This backlog the deliveries sequentially have in collection, our Thanks million. to production a to service an from revenue effective our shareholders, we short We of decreased $X completion, end approximately cash contracts, capacity, of our quarter-over-quarter free our

the organizations. forward, QX. our be percent to supply deferred recognized to chain are And Consequently, in of much component have since committed projects more revenue completion forecasted and effectively. We is moving restructured managing this we management

Our clients team's performance. me our great continue on give to feedback

gas clients. ft. completed flying This the lift in our engineering unique lead. X,XXX design developed For innovation of a QX, team our with was steel instance, during tube collaboration close

the design developed Gulf to to solve took identified of of equipment. Another design, which team moment on turnaround existing Intervention applied to rapid issue reduces Drift enthusiastic this Mexico, successfully the a quarter less campaign need client also can of device. pinnacle This of team this parts, The the address Koil's in. regarding be the future an Cap build the feedback offshore, from is for XX having the From fabrication our than included pour hours of in and solution Logic pressure-tested Frame, campaigns. Perhaps the the was a turnaround continues client's the and problem vessels example the subsea to with source similar and to an problem was to client. comprehensive mobilize subsea our an was our expensive accomplishments equipment performance a that approve, concept installation

the third During Bend were provide Latchers a to contract region. to significant the we an in operator awarded quarter, new Stiffener

need the secure the in is top markets team's without is new subsea and recognition Koil's our designed contract a a to continuously of to subsea in cable side diverse. underscoring our for Our technology a proprietary industry. umbilical facility position growth enabling developing This in strong product, solution award endeavors global

control projects, gas work of platform termination provide well demonstrating specialty number as and hydraulic that commissioning significant alloy the of and engineering control tubing an now Koil's Ashurst. over and before and maintenance overview, been the as facility the electrical at expertise spaces. chemical Houston. And includes similar and Planning in to risks hazards for cables. Koil company. announced commenced a call to and scope well with The includes identifying services startup termination both has to I'll and work of that activities increasing This testing used Trevor confined procurement in awarded and safe injection of mitigating turn swift Finance, repairs of resume an in have company's contract termination production secured oil for an a removal, welding, expertise begins, managing production. for our the critical ensuring projects international already also We Vice on we offshore President

Trevor Ashurst

you, Thank Erik.

third to take We will more a now detail. in minute our review quarter results

year-over-year revenues margin of subsea X For the of of profit this period million for generated or and at Energy equipment. Gross X% the increased XX% a third compared and quarter $X.X million, to in revenues improvement or mainly of increase product-oriented This increase and XX, of fixed-price million improved XXXX compared project stems the gross in million revenues $X.X revenues ended million. a remained representing driven improvement XXXX, year-over-year $X.X XXXX, expenses XXXX. the steady XX% the same was quarter by and Selling, $X.X of manufacturer third distribution revenues administrative Koil from in contracts to revenues, months XX% of reflecting general in primarily September higher was margins. $X.X for

reported and shift recorded positive moving to to share. profit a primarily driven substantial is diluted third net XXXX. $XXX,XXX So or higher of This $XXX,XXX fixed from increased earnings project loss improvement We the loss per due growth in in per revenue income. approximately for gross activity. $X.XX This was net to QX $X.XX the share by translates quarter, of which

of balance million capital as $X.X net XX, receivables, Turning XXXX, million working million in capital to and in net favorably and receivables. $X.X to December of compares in million $X.X cash $X this $X.X million in XX, XXXX, net included sheet. our million including $X.X had September cash working in as which We in

in year a early effectively converted this Our balance quarter resulting stronger investments working cash, to have capital from end. cash by

months the financial liquidity $X to the call cash in the reinforcing of turn now approximately concludes generated Erik. we quarter. X for Additionally, for XXXX, million you free time, further your and over flow I'll our Thank the position. This summary first third in

Erik Wiik

Trevor. Thank you,

our address growth. strategic we update future Koil is Before I'll map how and for an positioned any road questions, on provide

You can of web the copy map on view in page. our investor our road a presentation

by grown XX% of revenue During we the first approximately X months have year-over-year. XXXX,

continues significant progress product strategy our domestic equipment. and us prompted of business invest upgrading existing focusing with Our on service our on of to in growth key pool spending secured strategic plan. By success we accounts, share a increasing rental number propel performance has backlog of an increasing contracts This Koil's have with contracts. of to our

to growing to an response demand services also the Our in targeted of increase has subsea led retermination brownfield for bookings for the umbilicals.

positive is continue strategy supporting clients results. to key abroad, is yielding which Another our

to client. Furthermore, in that is with subsea U.S.-based client already I'm expand deepwater are Koil's though international participating first providing specific to making next initially share development markets well strategy to even pleased by For portfolio instance, was capabilities. we the planned support geo that year. The with we're for this our targeting our in progress align Mexico, our expansion,

to generated and For managing for and in we prospects de in presence is South services in pipeline a based currently hired example, rise. on America, in to strengthen order being director has Rio coil represent in demand subsea have the equipment Brazil. Global our bid clients Janeiro of already a Brazil. He's to

that sales XX Koil potential We team over and small, both pursuing currently and large projects, have to are deliver. may our be qualified expanded

a a in aboard several support Energy for to is prepared and with entry. thank experiencing great our company deepwater to no share today. I exceptional Koil mission-critical let barrier investors. a long-term our shareholders price with We're solutions high development. That interest Before strong remarks we new Koil We me continued and fast-growing investment is welcome offer their company. our market would a debt. conclude, foundation opportunity. an like concludes also

to back questions. the investor I Operator? the operator So turn to call will take

Operator

[Operator Instructions] with from first Treasure Hunting. And comes Sebastian our question Krog

Sebastian Krog

So is Mexico. my Flying year, in regarding contract December the Gulf Leads last of first the announced question the in you

give most if the think revenue maybe in revenue is completely contract us said already how in back percentage basically the XXXX. and will collected? of will is fulfilled the -- this release Could of the I maybe it update an many all year? flow already revenue press be Or the QX this then done of you into all you

Erik Wiik

Yes.

be how project for split don't some installation So part exact well. work but up, the will is -- in particularly it. I but that And of done that obviously it's the have commencing of numbers XXXX,

Sebastian Krog

Okay.

a that and other will QX? correct? fulfilled in Is XXXX that portion a small in or expect be portion you So maybe significant

Erik Wiik

is That correct.

Sebastian Krog

then fixed price we in a I saw revenues contract mean, quarter-to-quarter basis, And from decrease QX Okay. basically -- onwards. on from a

is it -- positive going the my negative revenue, product maybe basically, just Or we the QX? product about lower reason So now how the What terms QX for outlier in should How revenue of was think is the in forward, on direction? and question in outlier this the in high the was is in in an direction? future? QX so revenue side extremely the QX maybe

Erik Wiik

Okay.

just QX a profit of the level. So same didn't and the had million in second QX quarter. the $X.X improve revenue at We

didn't chain that did Now happen what we we as manage was in our third the as supply to. want well quarter

And recognized so expecting of that now QX. delivered QX that some and were in to be over we moved revenue to has

maintained we're will high of of yet, right the hard any order make Will high that and Obviously, tally executing QX? maintain is to revenue really revenue sure in it at into up but to of that now. certain how are that much not working QX? in about project revenue regardless level level. Now also we that push a that profit We're a

tell you normal. is to able not I'm what So

have And to We'll that goes to have in execute we available We I'll trying -- of a will percent is the are pull model. that we're everything get recognition to have trying of We're up. the you we're through down. But what the quarters quarter. completion as that company growing trying that goes to quarters in show we us doing complete work.

company, don't And grow. to that to we slide. going a status can if that so defines to want like growing happen. let And continue quo, things working We status make we we're quo. hard We're right? So

and is, to hard order going So all in pull execute to work of us. we're I'm say can front in work assure is really I to the in you, what going

Sebastian Krog

correctly not project So then understand as that revenue been have delayed, would a would QX did have similar on level the if it QX? I been

Erik Wiik

$XXX,XXX. gap the gap. filled The of Maybe, moved the Would it was put have is certainly filled perhaps. majority gap? that that be we obviously, out there very close work that Well, would

Sebastian Krog

Okay. on question. SG&A quarter-to-quarter increase in And one The last a then basis.

service sales revenues? to was expanding due You to expanding team more the this the -- or of due the

Trevor Ashurst

of then to of kind with contractors, really also that Brazil. some do And the associated et We services efforts professional It a with engaged some we in our growth strategy. housekeeping like are few needed. efforts that were has there and cetera, our more just

there's cybersecurity, for attention being of lot a around example. So paid like

help -- risk assessment there. some had And provide like a to so we some services hired

So contract and least year then are onetime or just some are cost a there, but little some a uptick time, ongoing. some at in once

Operator

a private as Travel, Our next Mike investor. question comes from

Unknown Attendee

a out the was in they a used level. Are now? backlog day you Back to when that there communicate down deep doing incorporated, all

Erik Wiik

as been a you meaningful yes, your that something Currently, we And our even we not our question. that that So have system, is the thank and not thinking have we consider metrics, for our financial us in improving is meaningful backlog a forecasting are and for it's because may long time That's number future. some planning, about. we term.

get that intake We same the work we we order have quarter. execute the in some and backlog

have of and a We services. mix products

future this as time. moment, in for number for we the a that some it's will meaningful said, you. consider at I us So not or But at

Unknown Attendee

you're just in is Or about that Was question, pursuing saying worldwide? XX that you're Brazil? projects. Another

Erik Wiik

No, worldwide. that's worldwide. is That

Unknown Attendee

that's like seems it a lot insider, industry projects. of an being Not

better much company the business the saying, people go, and out woodwork let's marketing do been you Are or? of recently. here coming You've

Erik Wiik

are Yes. to shared and the current with a been you wallet with mean, we with years. for wider increase the to means more earlier, customers, was we thing selling customers as which that share we the I have dealing strategy, portfolio one

the our just So capability. that give is awareness to necessary them of

introduced we're also customers of always which west more Second, pursue supply have particularly in new doing clients, our lead of us markets clearly have for the to particularly Koil America, South that now past of some on internationally, competitive, Africa particularly to instance. made the and recently for an more done business are we is in standardize we and not with that we we moving the now in see time. And work. started to clients scope then have not towards with follow which being some also new improved subsea there opportunity of now to new technology, What we're our our to is done, what is only solutions, that

Operator

This like for conference I concludes turn the remarks. to our Erik would question-and-answer over any back session. Wiik closing to

Erik Wiik

look appreciate who Thank concludes you, our Energy Thank today. all operator. forward call. in the This our We and call Koil to you. of to call. the And your earnings thanks you interest joined next

Operator

presentation. has you for Thank today's now attending The concluded. conference

now may disconnect. You

Koil Energy Solutions (KLNG) 4 Nov 242024 Q3 Earnings call transcript