Kelso Technologies Inc. Financial Results for the Quarter Ended March 31, 2026
Rhea-AI Summary
Kelso Technologies (OTC: KIQSF) reported Q1 2026 results showing transitional performance amid a cyclical downturn. Revenue was $1.75M, gross margin 37%, and net loss from continuing operations $427,070 (≈ $0.01 per share). Total assets were $5.50M, cash $209,459, and working capital $2.14M. Management completed an orderly leadership succession on April 16, 2026, continues approval work for the Angle Valve and Bottom Outlet Valve, and expects Q1 to be the operational trough with recovery beginning in Q2 and stronger builds in 2027–2028.
AI-generated analysis. Not financial advice.
Positive
- Order flow improving entering Q2 2026
- Clean capital structure: 55,300,085 common shares outstanding
- Available credit of $750,000 on $1.0M revolving facility
- Product approvals in progress for Angle Valve and Bottom Outlet Valve
Negative
- Revenue declined to $1.75M from $3.16M year-over-year
- Net loss from continuing operations of $427,070 in Q1 2026
- Elevated non-recurring professional fees of $256,577 in Q1 2026
News Market Reaction – KIQSF
On the day this news was published, KIQSF declined 0.50%, reflecting a mild negative market reaction.
Data tracked by StockTitan Argus on the day of publication.
West Kelowna, British Columbia and Bonham, Texas--(Newsfile Corp. - May 6, 2026) - Kelso Technologies Inc. (TSX: KLS) ("Kelso" or the "Company"), reports that the Company has released the interim financial statements and Management Discussion and Analysis for the quarter ended March 31, 2026.
The 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 interim financial statements and MD&A for the quarter ended March 31, 2026 were approved by the Board of Directors on May 6, 2026.
HIGHLIGHTS:
Q1 2026 reflected a transitional quarter in which the Company maintained its core customer relationships, preserved balance sheet strength, advanced the wind-down of legacy operations, and executed an orderly senior leadership succession, leaving the rail tank car equipment business well-positioned for the remainder of fiscal 2026.
In the face of industry forecasts indicating that North American tank car deliveries will decline by more than
20% in 2026 relative to fiscal 2025, management is executing a focused strategy centered on revenue diversification, market share expansion, and disciplined cost management. The Company expects that the first quarter of 2026 will represent the operational trough for the fiscal year. Order flow and operational momentum have strengthened materially entering the second quarter, and management is encouraged by the early indicators of performance recovery.The Company maintained a solid financial position at March 31, 2026, with total assets of
$5,504,516 , shareholders' equity of$4,245,438 , working capital of$2,139,491 , and$750,000 availability on the company's$1 million line of credit.Quarterly revenue of
$1,749,058 and gross margin of37% reflected reduced customer order volume against a substantially fixed cost base; the Company recognized a net loss from continuing operations of$427,070 ($0.01 net loss per share) and ended the period with cash of$209,459 and accounts receivable of$860,751 , providing near-term liquidity coverage of operating commitments.Operating expenses of
$1,079,633 included elevated and substantially non-recurring accounting, legal, consulting, and filing fees of$256,577 (Q1 2025:$104,690) , associated with completion of the FY2025 audit and the related continuous disclosure cycle. Employee benefit expenses of$664,359 (Q1 2025:$663,838) remained substantially flat year-over-year, reflecting management's commitment to maintaining the Company's operational capacity through the cyclical industry downturn while preserving the engineering and production workforce required to support the anticipated recovery in tank car builds in 2027 and 2028.The Company preserved a clean and undiluted capital structure, with 55,300,085 common shares outstanding, no new share issuances during the period, no stock options outstanding, and only 203,329 unvested restricted share units remaining.
The wind-down of the KIQ X discontinued operations is substantially complete, with the loss from discontinued operations narrowing materially to
$3,917 from$92,645 in Q1 2025, allowing management to focus exclusively on the rail tank car equipment segment.Subsequent to quarter-end, the Board effected an orderly senior leadership succession on April 16, 2026. Jesse Crews was appointed Chief Executive Officer, supported by an Office of the CEO comprising the continuing Chief Operating Officer, Amanda Smith, and Chief Financial Officer, Sameer Uplenchwar. Mark Temen was appointed Lead Director. Paul Cass rejoined the Board as an Independent Director, and together with Laura Roach and Mark Temen continues the Board's complement of three knowledgeable independent directors, providing continuity of governance oversight through the leadership transition. The Company's previously disclosed financial guidance and strategic direction remain unchanged.
The primary focus for the remainder of FY2026 will be maintaining cost discipline and launching the new Angle Valve, as the company prepares for the projected increase in new tank car builds starting in 2027/2028.
Management is continuing to focus its attention on increasing shareholder value by diversifying the Company's product offering, building new strategic partnerships, and identifying opportunities for vertical integration in 2026. The Company maintains a disciplined approach to capital allocation, prioritizing the reinvestment of capital in the operating business and the evaluation of strategic transactions that support long-term growth objectives, while continuing to consider the full range of capital allocation alternatives available to the Company.
SUMMARY OF FINANCIAL RESULTS FOR THE THREE MONTHS ENDED MARCH 31, 2026 & 2025
| Three Months Ended March 31 | 2026 | 2025 | ||||
| Revenues | $ | 1,749,058 | $ | 3,158,074 | ||
| Gross Profit | $ | 651,733 | $ | 1,409,754 | ||
| Gross profit margin | ||||||
| Expenses including non-cash items | $ | 1,079,633 | $ | 904,772 | ||
| Net income (loss) | ( | ) | $ | 412,337 | ||
| Basic/Diluted earnings (loss) per share - continuing ops | ( | ) | $ | 0.01 | ||
| Basic/Diluted earnings (loss) per share - discontinued ops | ( | ) | ( | ) | ||
| Non-cash expenses | $ | 0 | ( | ) | ||
| Adjusted EBITDA (loss) * | ( | ) | $ | 412,172 | ||
| Liquidity and Capital Resources | ||||||
| Working capital | $ | 2,139,491 | $ | 2,570,415 | ||
| Cash | $ | 209,459 | $ | 417,188 | ||
| Accounts receivable | $ | 860,751 | $ | 1,596,583 | ||
| Net Equity | $ | 4,245,438 | $ | 4,641,365 | ||
| Total assets | $ | 5,504,516 | $ | 6,877,978 | ||
| Weighted Average Basic/Diluted Common shares outstanding | 55,300,085 | 55,160,086 | ||||
| Three Months Ended March 31 | 2026 | 2025 | ||||
| Net Income (Loss) | ( | ) | $ | 412,337 | ||
| Unrealized foreign exchange loss (gain) | ( | ) | ( | ) | ||
| Amortization | $ | 3,741 | $ | 3,741 | ||
| Income Taxes | $ | 0 | $ | 0 | ||
| Loss from discontinued operations | $ | 3,917 | $ | 92,645 | ||
| Other Miscellaneous Income (loss) | $ | 830 | $ | 9,243 | ||
| Adjusted EBITDA (loss) * | ( | ) | $ | 412,172 |
(*) Reconciliation of Net Income (Loss) to Adjusted EBITDA for the first quarter ended March 31, 2026 and 2025
Readers are cautioned that Adjusted EBITDA (Loss) should not be construed as an alternative to net income (loss) as determined under IFRS Accounting Standards; nor as an indicator of financial performance as determined by IFRS Accounting Standards; nor a calculation of cash flow from operating activities as determined under IFRS Accounting Standards; nor as a measure of liquidity and cash flow under IFRS Accounting Standards. 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.
LIQUIDITY AND CAPITAL RESOURCES
As at March 31, 2026 the Company had cash on deposit in the amount of
The working capital position of the Company as at March 31, 2026 was
Total assets of the Company were
As at March 31, 2026, the company had drawn down
Management takes all necessary precautions to minimize risks, however additional risks could affect the future performance of the Company. Business risks are detailed in the Risks and Uncertainties section of this MD&A.
OUTLOOK
Kelso Technologies Inc. entered fiscal 2026 from a position of renewed profitability, having delivered its first full year of profitable operations since fiscal 2020 with FY2025 net income from continuing operations of
Operational efficiency and cost discipline remain foundational to Kelso's strategy. In the first quarter of fiscal 2026, employee benefit expenses of
Management is continuing to focus its attention on increasing shareholder value by diversifying the Company's product offering, building new strategic partnerships, and identifying opportunities for vertical integration in 2026. The Company maintains a disciplined approach to capital allocation, prioritizing the reinvestment of capital in the operating business and the evaluation of strategic transactions that support long-term growth objectives, while continuing to consider the full range of capital allocation alternatives available to the Company.
The Company's strategic focus in fiscal 2026 includes advancing full Association of American Railroads approvals for its Angle Valve and Bottom Outlet Valve, both of which remain in service trials. The principal operational priorities for the remainder of the fiscal year are the continuation of disciplined cost management and the commercial launch of the new Angle Valve, positioning Kelso to participate in the anticipated cyclical recovery in new tank car builds commencing in 2027 and 2028. These product approvals are expected to unlock new revenue streams and strengthen the Company's ability to offer comprehensive product packages to its customer base. The Company's
SUMMARY
Kelso Technologies Inc. is navigating a cyclical industry downturn in fiscal 2026 from a foundation of demonstrated operational improvement, disciplined cost management, and a clear diversification strategy. While the first quarter reflected reduced customer order volume and elevated non-recurring professional fees, the Company's sound financial position, clean capital structure, substantially completed wind-down of legacy operations, and orderly leadership succession collectively position Kelso to execute on its strategic priorities through the balance of the year. The Company's proactive measures — advancement of the Angle Valve and Bottom Outlet Valve approval processes, exploration of adjacent markets and vertical integration opportunities, and preservation of financial flexibility through its revolving credit facility — are aligned with the anticipated cyclical recovery in new tank car builds commencing in 2027 and 2028.
With an undiluted capital structure, strong asset base, no term debt obligations, a revolving credit facility providing working capital flexibility and a renewed focus on innovation and operational execution, Kelso remains well positioned to capitalize on industry recovery and rising demand for advanced valve technologies, with a view to driving sustainable profitability and shareholder value over the longer term.
About Kelso Technologies
Kelso is a diverse transportation equipment company that specializes in the creation, production, sales and distribution of proprietary products used in rail and other transportation. The Company's rail equipment business has been developed as a designer and reliable domestic supplier of unique high-quality rail tank car valves that provide for the safe handling and containment of commodities during rail transport. Kelso products are specifically designed to address the challenging issues of public safety, worker well-being and potential environmental harm while providing effective and efficient operational advantages to customers. Kelso's innovation objectives are to create products that diminish the potentially dangerous effects of human and technology error through the use of the Company's portfolio of proprietary products.
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 SEDAR+ in Canada and on EDGAR in the United States.
On behalf of the Board of Directors,
Jesse Crews, CEO
Legal Notice Regarding Forward-Looking Statements: This news release contains "forward-looking statements" within the meaning of applicable securities legislation. Forward-looking statements indicate expectations or intentions. Forward-looking statements in this news release include, but are not limited to, statements with respect to: the Company's rail tank car equipment business is well-positioned for the remainder of fiscal 2026; North American tank car deliveries will decline by more than
For further information, please contact:
Jesse Crews | Sameer Uplenchwar | Head office: |
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/296390