Deep Down Inc., now known as Koil Energy Solutions, announced its first quarter results. Its revenues decreased 8 percent to $3.6 million compared to $3.9 million for the quarter ended. This decrease is primarily due to a higher mix of short duration projects utilizing their support services and rentals.
Moreover, the company reported a gross profit of $1.4 million or 39 percent of revenues. It had a decrease compared to 2021 1Q results due to lower revenues from short duration project activity. The decrease in gross profit percentage is driven by increases in labor and lower margin passthrough service costs.
In addition, the company had a net loss of $0.3 million or a $0.02 loss per diluted share. Also, reported a modified EBITDA of negative $0.1 million in Q1 2022; compared to a modified EBITDA of $0.4 million in Q1 2021.
Likewise, at March 31, 2022, Deep Down had a working capital of $6.5 million; total shareholders’ equity was $9.8 million. Given the company’s current capital structure, it remains in a strong position for continued growth.
Charles Njuguna, Deep Down’s CEO, commented, “Deep Down’s results for the first quarter of 2022 reflect the ongoing challenges that face the offshore industry. Inflation, certain geopolitical events, and the lingering effects of the pandemic continue to weigh on our customers’ abilities to commit to long-term deepwater projects. Our customers’ cautious return to increased activities presented topline and margin pressures to us. Aside from pricing pressure from customers, margin compression also came in the form of low margin pass-through third-party costs on select projects and general price increases due to the inflationary macro environment in which we currently operate. While some of these factors are systemic, we remain focused on the levers within our control as we work to grow the business.”
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About Deep Down Inc.
Depp Down, Inc. is a leading energy services company offering subsea equipment and support services to the world’s energy and offshore industries. Likewise, their core services and technological solutions include distribution system installation support. Also, engineering services umbilical terminations, loose-tube steel flying leads, and related services.
Moreover, the company recently announced the relocation of the business and rebranding of the company to Koil Energy Solutions, Inc. Their objective is to further enhance their growth prospects, promote their core competencies to expand their product and service offerings into new markets.