Kelso Technologies Aims for Modest Growth and Strategic Gains in FY2025
Kelso Technologies Inc. anticipates flat to modest sales growth for fiscal year 2025, with a strategic focus on cost control and proactive initiatives.
Overview of FY2025 Financial Expectations
On February 26, 2025, Kelso Technologies Inc. announced that its Board of Directors approved the fiscal year 2025 budget. The company predicts a sales growth ranging from 0% to 5% compared to the previous year, with FY2024 revenue projected at $10.7 million. As it gears up for an expected rise in tank car builds in 2026, Kelso is committed to maintaining cost discipline to strengthen operational efficiency and financial health. CEO Frank Busch highlighted that 2025 is intended to be a rebuilding year, addressing shareholder concerns while focusing on increasing revenues and managing expenses. The company is also actively seeking crucial AAR approvals for new products, enhancing its revenue prospects. Despite facing current challenges, Kelso is strategically positioning for future recovery and profitability.
Positive Aspects to Consider
- The approved budget signals proactive financial oversight and strategic planning by the Board of Directors.
- Kelseo aims to exercise cost control while gearing up to benefit from a projected rise in tank car builds set for 2026, which may boost profitability.
- By pursuing AAR approvals for innovative products, the company could unlock additional revenue sources, enhancing competitiveness in the marketplace.
- The establishment of a $250,000 line of credit with Texas Capital Bank improves liquidity, helping the company fulfill vendor obligations and support operational stability.
Challenges Ahead
- With projected sales growth remaining flat to slightly positive (0% to 5%), there are concerns regarding the ability to achieve significant revenue enhancements shortly.
- Kelso expects to report significant losses for FY2024 due to one-time expenses and write-offs, which may dampen investor confidence.
- The company’s emergence from a “challenging financial landscape” suggests ongoing operational difficulties and uncertainty in achieving stronger financial stability.
Frequently Asked Questions
What is Kelso Technologies’ sales growth forecast for FY2025?
Kelso Technologies projects sales growth to be flat or slightly positive, estimating a range of 0% to 5% compared to FY2024.
What strategic initiatives is Kelso pursuing for FY2025?
Kelso is concentrating on cost discipline, securing AAR approvals for its product lines, and optimizing its balance sheet for greater profitability.
How did Kelso Technologies perform in FY2024?
For FY2024, Kelso anticipates reporting revenue of $10.7 million but expects a significant loss stemming from one-time expenses and write-offs.
What is the market outlook for tank car deliveries?
The market outlook for tank car deliveries shows slight improvement, with projections indicating an increase to 10,325 units in 2025.
What products does Kelso Technologies focus on?
Kelso specializes in transportation equipment, notably rail tank car valves and advanced driver assistance systems for automotive applications.
Disclaimer: This summary is generated from a press release disseminated by GlobeNewswire, which may contain errors. For the full release, click here.
Full Release
WEST KELOWNA, British Columbia, and BONHAM, Texas, Feb. 26, 2025 (GLOBE NEWSWIRE) — Kelso Technologies Inc (TSX: KLS) today announced the approval of its budget for fiscal year 2025. The company anticipates sales growth to be flat or slightly positive, projecting an increase of 0% to 5% compared to fiscal year 2024. For FY2024, the Company expects to report revenue of $10.7 million. A primary objective for FY2025 is maintaining strict cost discipline while preparing for the forthcoming upswing in tank car builds anticipated to ramp up in 2026. This approach aims to position the company to leverage the increased demand and enhance profitability.
“We are pleased to have reached an agreement on a budget that aligns with our strategic goals for 2025,” stated Paul Cass, Lead Independent Director. “While we project modest sales growth, we have confidence in our ability to navigate the current economic environment, uphold cost discipline, and provide value to our shareholders as we anticipate the increased tank car build cycle.”
As it enters 2025, Kelso Technologies Inc is moving past a challenging financial backdrop, influenced by market conditions and strategic efforts throughout 2024. The new management team has concentrated on boosting operational efficiency and cutting overhead costs, expecting a favorable impact on profitability in 2025. Kelso aims to optimize its balance sheet for FY2024 through reassessing inventory levels and the carrying value of KXI. Consequently, the company projects a significant loss for FY2024 due to one-time expenses and write-offs.
Strategic Initiatives
Kelso is diligently pursuing full Association of American Railroads (AAR) approval for its Bottom Outlet Valve (BOV) and Angle Valve (AV), both of which are currently deep into their required service trial periods. Securing this approval is expected to unlock new revenue possibilities, especially considering the higher unit value of pressure car packages.
“2025 will be a rebuilding year for Kelso,” CEO Frank Busch stated. “We continue to listen to our shareholders’ concerns and are acting on essential business fundamentals to increase revenue while reducing expenditures to improve EBITDA.”
Moreover, the company is undergoing a strategic reorganization aimed at enhancing financial stability without compromising production capabilities. This includes a thorough review of the KXI HD product line to maximize shareholder value.
Market Outlook
“The outlook for tank car deliveries has seen a slight improvement,” remarked Amanda Smith, EVP of Operations. “After averaging just above 8,700 cars annually from 2021 to 2023, actual tank car deliveries in 2024 surpassed 10,000 cars, with FTR forecasting a slight uptick to 10,325 for 2025. This production level indicates a 15.8% increase compared to the 2021-2023 average, presenting an opportunity for improved outcomes.”
Projections for 2026 and beyond show a positive trajectory, with anticipated growth to 13,000 units in 2027. Kelso’s focus on pursuing AAR approvals aligns with this forecast, preparing the company to benefit from increased market demand.
Liquidity and Capital Resources
Management’s efforts to reduce costs have yielded positive results, allowing the company to meet its vendor obligations on time. Furthermore, Kelso has secured a line of credit from Texas Capital Bank worth $250,000, strengthening its liquidity position.
Conclusion
Kelso Technologies is targeting a profitable FY2025. Despite current market headwinds, the Company’s strategic initiatives, including securing AAR approvals and financial restructuring, are designed to bolster performance moving forward.
Kelso Technologies Seeks Growth Amid Anticipated Rail Market Recovery
The coming years hold promise for Kelso Technologies as market conditions are expected to improve after 2025. This anticipated recovery presents a beneficial environment for the company as it seeks to expand its operations.
About Kelso Technologies
Kelso Technologies is a versatile transportation equipment firm. The company specializes in the design, production, sales, and distribution of proprietary products for rail and automotive transportation. Specifically, its rail equipment segment has positioned itself as a dependable domestic provider of high-quality rail tank car valves. These valves are engineered to ensure safe handling and containment of commodities during rail transport.
In addition to its rail business, Kelso’s automotive division has developed an innovative automated suspension-based Advanced Driver Assistance System. This system is tailored for commercial missions in challenging wilderness environments. All products under the Kelso banner are crafted with a focus on public safety, worker well-being, and minimizing environmental risks, while also providing significant operational efficiencies to clients.
Kelso’s commitment to innovation aims to reduce the risks associated with human error and technological mishaps through its extensive portfolio of proprietary products.
For a deeper insight into the company’s business and financial performance, interested parties can visit Kelso’s official website at www.kelsotech.com, as well as view public documents available on SEDAR in Canada and on EDGAR in the United States.
On behalf of the Board of Directors,
Frank Busch, CEO
Legal Notice Regarding Forward-Looking Statements: This news release includes “forward-looking statements” as defined by applicable securities laws. These statements refer to the company’s expectations or intentions. Forward-looking statements contained herein suggest that the company’s new rail products are likely to sell following AAR approvals, that the rail sector is experiencing slight improvements and presents growth opportunities for Kelso, and that the firm is focused on enhancing efficiency while reducing operational costs as part of its strategic plan.
While Kelso is optimistic about its anticipated future performance, there are no guarantees that these expectations will materialize. Readers should exercise caution regarding forward-looking statements due to inherent risks and uncertainties. Factors that could cause actual performance to differ include prolonged industry challenges such as high-interest rates, inflation, and supply chain disruptions. Additionally, product development timelines may extend, costs may escalate, and certain products may not materialize or meet sales expectations. Furthermore, competition may grow, potentially affecting market share, and regulatory approvals for new products aren’t guaranteed.
Except as legally required, the company does not plan to update the forward-looking statements included in this release.
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