Kelso Technologies Inc. Financial Results for the Six Months Ended June 30, 2023
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VANCOUVER, British Columbia and BONHAM, Texas, Aug. 10, 2023 (GLOBE NEWSWIRE) -- Kelso Technologies Inc. (“Kelso” or the “Company”), (TSX: KLS), (NYSE American: KIQ) reports that it has released its unaudited consolidated interim financial statements and Management Discussion and Analysis for the six months ended June 30, 2023.
The unaudited consolidated interim financial statements were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”). All amounts herein are expressed in United States dollars (the Company’s functional currency) unless otherwise indicated.
The Company’s unaudited consolidated financial statements and MD&A for the six months ended June 30, 2023 were approved by the Board of Directors on August 09, 2023.
SUMMARY OF FINANCIAL PERFORMANCE
Six months ended June 30, | 2023 | 2022 | ||||||
Revenues | $ | 4,612,420 | $ | 5,833,347 | ||||
Gross profit | $ | 1,879,122 | $ | 2,701,955 | ||||
Gross profit margin | 41 | % | 46 | % | ||||
Adjusted EBITDA (loss) | $ | (1,140,131 | ) | $ | 283,482 | |||
Non-cash expenses | $ | 602,267 | $ | 821,165 | ||||
Taxes | $ | 91,398 | $ | 35,900 | ||||
Net income (loss) | $ | (1,833,796 | ) | $ | (573,579 | ) | ||
Basic earnings (loss) per share | $ | (0.03 | ) | $ | (0.01 | ) | ||
Three months ended June 30, | ||||||||
Revenues | $ | 2,152,462 | $ | 2,869,496 | ||||
Gross profit | $ | 792,554 | $ | 1,273,561 | ||||
Gross profit margin | 37 | % | 44 | % | ||||
Adjusted EBITDA (loss) | $ | (608,513 | ) | $ | 75,606 | |||
Net Income (loss) | $ | (1,047,119 | ) | $ | (519,443 | ) | ||
LIQUIDITY AND CAPITAL RESOURCES
As at June 30, 2023 the Company had cash on deposit in the amount of
The Company had income tax payable of
The working capital position of the Company as at June 30, 2023 was
Net assets of the Company were
OUTLOOK
During the first half of 2023 the owners and shippers that utilize rail tank cars continue to cautiously consider the timing and investment in new tank car equipment and/or the re-qualification of their existing rail tank car fleets. Industry experts anticipate that new car production will track replacement demand for the 438,000 tank car fleet estimated to be in the range of 7,000 – 10,000 new cars per year. Rail tank car re-qualifications activities will be in the range of 40,000 – 50,000 cars per year for the next several years.
Rail tank car activity requiring Kelso components has remained mostly unchanged based on general economic recoveries and manufacturing supply chain disruptions that may require an increase in rail tank car transportation solutions. Traditional foreign supply chains in the rail tank car industry have become unreliable. The Company’s “
Rail industry projections indicate that the rail tank car market is in a period of modest fleet growth in rail tank car utilization. Industry analysts predict new tank car volume rate at approximately 7,000 to 10,000 tank cars in 2023. For the first half of 2023 approximately 4,100 new rail tank cars were produced and delivered.
Management believes that there are significant opportunities to grow from the introduction of new innovative products in both the rail and automotive industries that are emerging from our R&D activities. The Company continues to research, develop and engineer promising new transportation related equipment. In the heavily regulated transportation industries, the Company’s R&D projects are complex, time consuming and expensive. The primary purpose of our R&D investments is to advance and elevate the probability of future financial successes from a larger and more diverse product line.
Several new rail products currently in AAR service field trials continue to progress well during the first and second quarters of 2023. The Company anticipates regulatory progress in 2023 that can lead to new revenue sources when full approval and early AAR vetted conditional sales to qualified customers are permitted.
The KXI HD prototype vehicle has been completed and initial testing activities are above expectations. All mechanical and hydraulic components are proven technologies that are sourced from well-established OEM suppliers and stakeholders. Component designs have been scaled from existing uses in military and commercial applications to fit the specifications of KXI HD. The prototype vehicle has been commissioned with the Company’s proprietary encryption protected Road-To-No-Road™ wilderness driver assistance software which encompasses our trademarks PreciseRide™ and AdaptiveGrip™. The commissioned prototype vehicle is currently going through extensive software and engineering commissioning and integrity testing in preparation for Canadian Motor Vehicle Safety Standards compliance testing.
Once KXI HD has its commercial design specifications completed the final design will have to attain full proprietary rights and compliance with the Canadian Motor Vehicle Safety Standards (CMVSS). Successful completion of the CMVSS requirements should allow the Company to meet the Federal Motor Vehicle Safety Standards (FMVSS) in the United States including the majority of compliance requirements for each Canadian province and each American state. This is expected to provide the Company with a National Safety Mark awarded as a final stage manufacturer which is a key prerequisite for enabling full scale marketing initiatives and initial commercial sales in 2024.
Timing of regulatory approvals on new rail and automotive products and corresponding revenue streams remains unpredictable and cannot be guaranteed to be successful. Management continues to assess the Company’s research and development discoveries, new product viability, budget restrictions and market potential of all R&D programs. Management adjusts R&D plans based on testing results as part of the Company’s R&D risk management program. Despite the many challenges created by the COVID-19 recession, historic inflation rates and compromised supply chain issues, Management remains bullish on the longer term potential of the Company’s new product developments.
The Company deploys capital resources sensibly to maintain financial health and liquidity. The Company’s working capital was
About Kelso Technologies
Kelso is a diverse product development company that specializes in the design, engineering, production and distribution of proprietary service equipment used in transportation applications. The Company’s reputation has been earned as a designer and reliable supplier of unique high-quality rail tank car valve equipment that provides for the safe handling and containment of hazardous and non-hazardous commodities during transport. All Kelso products are specifically designed to provide economic and operational advantages to customers while reducing the potential effects of human error and environmental harm.
For a more complete business and financial profile of the Company, please view the Company's website at www.kelsotech.com and public documents posted under the Company’s profile on www.sedar.com in Canada and on EDGAR at www.sec.gov in the United States.
On behalf of the Board of Directors,
James R. Bond, CEO and President
Notice to Reader: References to Adjusted EBITDA refer to net earnings from continuing operations before interest, taxes, amortization, unrealized foreign exchange and non cash share-based expenses (Black Scholes option pricing model) and write-off of assets. Adjusted EBITDA is not an earnings measure recognized by IFRS and does not have a standardized meaning prescribed by IFRS. Management believes that Adjusted EBITDA is an alternative measure in evaluating the Company's business performance. Readers are cautioned that Adjusted EBITDA should not be construed as an alternative to net income as determined under IFRS; nor as an indicator of financial performance as determined by IFRS; nor a calculation of cash flow from operating activities as determined under IFRS; nor as a measure of liquidity and cash flow under IFRS. The Company's method of calculating Adjusted EBITDA may differ from methods used by other issuers and, accordingly, the Company's Adjusted EBITDA may not be comparable to similar measures used by any other issuer.
Legal Notice Regarding Forward-Looking Statements: This news release contains “forward-looking statements” within the meaning of applicable securities legislation. Forward-looking statements are indicated expectations or intentions. Forward-looking statements in this news release include that owners and shippers that use rail tank cars continue to cautiously commit to investment in new rail tank car equipment; that industry experts anticipate that new car production will track replacement demand for the 438,000 tank car fleet and be in the range of 7,000 – 10,000 cars per year; that rail tank car re-qualifications will be in the range of 40,000 – 50,000 cars per year for the next several years; that the Company’s reliable “
For further information, please contact:
James R. Bond, CEO and President | Richard Lee, Chief Financial Officer | Corporate Address: |
Email: bond@kelsotech.com | Email: lee@kelsotech.com | 13966 - 18B Avenue South Surrey, BC V4A 8J1 www.kelsotech.com |
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