Kelso Technologies reports 2H EPS (3c) vs. (1c) last year

Reports Q2 revenue $2.15M vs. $2.87M last year. The company said, “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 “100% American-Made” reputation and a new distribution agreement with a third party producer of rail tank equipment give the Company additional competitive capabilities. The Company’s proven ability to service customer orders even during the most challenging of times have improved Kelso’s reputation and brand recognition as a reliable go-to primary supplier. 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.”