Core Viewpoint - KNOT Offshore Partners LP is set to release its financial results for the 3rd Quarter of 2025 on December 5, 2025, before market opening [1] Financial Results Announcement - The financial results will be disclosed before the market opens on December 5, 2025 [1] - A conference call is scheduled for the same day at 9:30 AM (Eastern Time) to discuss the results [1] - Unitholders and interested parties are invited to join the conference call via a live webcast link on the Partnership's website [1]

Core Viewpoint - Knot Offshore (KNOP) shares experienced a significant increase of 9.7% to $9.89, driven by a takeover offer from Knutsen NYK Offshore Tankers AS, which proposed to acquire all publicly held common units for $10 each [1][2]. Company Performance - The upcoming quarterly earnings for Knot Offshore are projected at $0.13 per share, reflecting a substantial year-over-year growth of 218.2%. Revenue is expected to reach $86.33 million, marking a 13.2% increase from the same quarter last year [3]. - The consensus EPS estimate for Knot Offshore has remained stable over the past 30 days, indicating that the stock's price movement may not sustain without trends in earnings estimate revisions [4]. Industry Context - Knot Offshore is part of the Zacks Transportation - Shipping industry, where another company, Okeanis Eco Tankers Corp. (ECO), saw a decline of 3.4% to $34.37, despite a 20.8% return over the past month [5]. - Okeanis Eco Tankers Corp. has experienced a significant downward revision in its consensus EPS estimate, which decreased by 39.2% to $0.29, representing a year-over-year decline of 35.6% [6].

Core Viewpoint - KNOT Offshore Partners LP received an unsolicited non-binding proposal from Knutsen NYK Offshore Tankers AS to acquire all publicly held common units of the Partnership for $10 in cash per common unit [1] Group 1 - The proposal was dated October 31, 2025, and is intended to be executed through a wholly-owned subsidiary of KNOT [1]

Core Points - KNOT Offshore Partners LP has announced that its 2025 Annual Meeting will take place on December 15, 2025 [1] - The record date for voting at the Annual Meeting is set for November 6, 2025 [1] - The meeting will be held at 2 Queen's Cross, Aberdeen AB15 4YB, United Kingdom at 4:00 pm UK time [1]

Company Performance - Knot Offshore (KNOP) shares increased by 8.4% to close at $8.95, supported by high trading volume, contrasting with a 7.7% loss over the past four weeks [1] - The stock has gained 65% year to date, benefiting from high fleet utilization, operational efficiency, and effective fleet expansion [1] Earnings Expectations - The upcoming quarterly earnings for Knot Offshore are projected at $0.13 per share, reflecting a year-over-year increase of 218.2%, with revenues expected to reach $86.33 million, up 13.2% from the previous year [2] - The consensus EPS estimate for the quarter has been revised 26.7% higher in the last 30 days, indicating a positive trend that typically correlates with price appreciation [3] Industry Context - Knot Offshore is part of the Zacks Transportation - Shipping industry, which includes Kirby (KEX), whose stock rose 0.9% to $82.21 but has seen a -3.5% return over the past month [4] - Kirby's consensus EPS estimate remains unchanged at $1.6, representing a 3.2% increase from the previous year, and it also holds a Zacks Rank of 3 (Hold) [5]

Core Points - KNOT Offshore Partners LP has declared a quarterly cash distribution of US$ 0.026 per common unit for the quarter ended September 30, 2025 [1] - The distribution will be paid on November 6, 2025, to unitholders of record as of the close of business on October 27, 2025 [1] - The Partnership maintains a positive outlook on key components of its operations [1]

Financial Performance - Operating revenues for Q2 2025 reached $87.06 million, a 17% increase from $74.42 million in Q2 2024[6] - Net income for the first half of 2025 was $14.39 million, compared to a net loss of $5.41 million in the same period of 2024[9] - The company reported an operating income of $22.18 million for Q2 2025, significantly up from $1.33 million in Q2 2024[6] - For the six months ended June 30, 2025, the net income was $14,391, compared to a net loss of $5,413 for the same period in 2024, indicating a significant turnaround[19] - For the three months ended June 30, 2025, the net income was $6.81 million, compared to a net loss of $12.85 million for the same period in 2024[115] - Net income for the three months ended June 30, 2025, was $6.8 million, a significant improvement of $19.7 million compared to a net loss of $12.9 million for the same period in 2024[190] Expenses and Liabilities - Total operating expenses decreased to $126.81 million in the first half of 2025, down from $130.02 million in the first half of 2024[6] - Total current liabilities decreased to $219.11 million as of June 30, 2025, from $287.12 million at the end of 2024[12] - Interest expense for Q2 2025 was $14.72 million, down from $16.32 million in Q2 2024, representing a decrease of 9.8%[50] - Total interest expense for the first half of 2025 was $30.22 million, a reduction of 12.3% compared to $34.33 million in the same period of 2024[50] - The Partnership's total other finance expense for the first half of 2025 was $351, compared to $92 in the same period of 2024[51] Assets and Cash Flow - Cash and cash equivalents as of June 30, 2025, were $66.32 million, slightly down from $66.93 million at the end of 2024[12] - Total assets increased to $1.62 billion as of June 30, 2025, compared to $1.57 billion at the end of 2024[12] - The partnership's net cash provided by operating activities for the six months ended June 30, 2025, was $67,980, compared to $60,572 for the same period in 2024, showing an increase of approximately 12.4%[19] - The partnership's cash and cash equivalents at the end of the period were $66,322, compared to $56,619 at the end of June 30, 2024, representing an increase of approximately 17.5%[19] Debt and Financing - Long-term debt rose to $735.45 million as of June 30, 2025, up from $648.08 million at the end of 2024[12] - The carrying amount of long-term debt as of June 30, 2025, was $918.59 million, compared to $909.65 million as of December 31, 2024[64] - The Partnership's long-term debt repayment schedule includes a total of $918.6 million, with significant repayments due in 2026 amounting to $373.7 million[84] - The Live Facility, which became a debt obligation upon the acquisition of Live Knutsen, has an outstanding amount of $73.4 million as of March 3, 2025, and bears interest at SOFR plus a margin of 2.01%[85][88] Acquisitions and Fleet - The acquisition of the Daqing Knutsen was completed on July 2, 2025, which will be accounted for as an asset acquisition and included in consolidated operations from that date[23] - The Partnership acquired KNOT's 100% interest in KNOT Shuttle Tankers 27 AS on March 3, 2025, as part of its market expansion strategy[78] - The Partnership acquired the Live Knutsen for a purchase price of $100 million, netting an initial cost of approximately $26.6 million after accounting for outstanding indebtedness and capitalized fees[172] - The Partnership's fleet consisted of eighteen shuttle tankers as of June 30, 2025, with charter contracts expiring between 2026 and 2031[22] Revenue and Contracts - Time charter revenues for the three months ended June 30, 2025, were $85,920,000, up 20.8% from $71,075,000 in 2024[39] - Minimum contractual future revenues from time charters and bareboat charters total $895,203,000, with $178,012,000 expected in 2025[39] - Time charter and bareboat revenues increased by $12.5 million to $85.9 million for the three months ended June 30, 2025, compared to $73.4 million for the same period in 2024, primarily due to the inclusion of the Tuva Knutsen and Live Knutsen in the fleet[190] Tax and Valuation - The effective tax rate for the three months ended June 30, 2025, is -2%, compared to 2% for the same period in 2024[73] - The Partnership recognized a valuation allowance against deferred tax assets of $3.0 million as of June 30, 2025, down from $3.2 million as of December 31, 2024[72] Other Financial Metrics - The Partnership's total assets pledged as security for long-term debt and interest rate swap obligations amounted to $1.513 billion as of June 30, 2025, up from $1.462 billion at December 31, 2024[110] - The total notional amount of outstanding interest rate swap contracts as of June 30, 2025, was $421.2 million, up from $417.9 million at the end of 2024[59] - The Partnership's interest rate swap contracts had a net asset value of $6.2 million as of June 30, 2025, down from $13.3 million at the end of 2024[59] Shareholder Returns - The Partnership reported cash distributions declared and paid per unit of $0.03 for the three months ended June 30, 2025, consistent with the same period in 2024[115] - The Partnership authorized a common unit repurchase program of up to $10 million over the next 12 months[146] - As of September 29, 2025, the Partnership repurchased 226,374 common units at an average price of $7.24 per unit, totaling $1.64 million[148]

Group 1 - The focus has shifted from primarily tech stocks to include offshore drilling, supply industry, and shipping sectors such as tankers, containers, and dry bulk [1] - There is an emerging interest in the fuel cell industry, which is still in its nascent stage [1] Group 2 - The individual has a background in auditing with PricewaterhouseCoopers and transitioned to day trading nearly 20 years ago [2] - The experience includes navigating significant market events such as the dotcom bubble, the aftermath of the World Trade Center attacks, and the subprime crisis [2]

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Financial Data and Key Metrics Changes - Revenues for Q2 2025 were $87.1 million, with operating income at $22.2 million and net income at $6.8 million, while adjusted EBITDA was $51.6 million [3][11] - Available liquidity as of June 30, 2025, was $104 million, consisting of $66.3 million in cash and cash equivalents and $38.5 million in undrawn credit facilities, which is $4 million higher than at the end of Q1 [3][11] Business Line Data and Key Metrics Changes - The company achieved full utilization of its fleet, with an overall utilization rate of 96.8%, despite the start of two dry dockings [3] - The backlog as of June 30, 2025, was extended to $895 million in fixed contracts, averaging 2.6 years [9] Market Data and Key Metrics Changes - The shuttle tanker market is tightening in both Brazil and the North Sea, driven by Floating Production Storage and Offloading (FPSO) startups and ramp-ups [8][9] - The average age of the fleet was reduced from 10.1 years to 9.7 years with the addition of a new vessel [9] Company Strategy and Development Direction - The company is focused on fleet growth through acquisitions and maintaining high operational utilization, while also planning to increase distributions to unitholders [17][27] - The strategic acquisition of the Dakin Connexion is expected to enhance long-term contracts and fleet growth without drawing on cash reserves [5][8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the financial outlook, citing positive momentum in the shuttle tanker market and the company's ability to address debt maturities [12][16] - The company is optimistic about the demand for shuttle tankers, anticipating a medium-term shortage against forthcoming production [16] Other Important Information - A cash distribution of $0.026 per common unit was declared and paid in August 2025 [4] - The company initiated a $10 million unit buyback program, repurchasing 226,000 common units at an average price of $7.24 [6][10] Q&A Session Summary Question: Delivery timeline for Dakin Connexion - Management confirmed that the Dakin Connexion was delivered on July 2, 2025, the same day it was announced [19][20] Question: Future dropdowns and fleet growth - Management indicated that they do not have a specific timing for future dropdowns but will respond to opportunities as they arise, emphasizing the importance of financial capacity [22] Question: Contracting discussions for older vessels - Management clarified that their business model focuses on operating vessels rather than trading them, and they are actively discussing contracts for older vessels [26] Question: Balancing fleet growth and distribution increases - Management stated that fleet growth and returns to unitholders are both important and can be pursued simultaneously without conflict [27][28]