Core Viewpoint - The article emphasizes the importance of identifying and maintaining trends in short-term investing, highlighting that sound fundamentals and positive earnings estimates are crucial for sustaining momentum in stocks [1]. Group 1: Recent Price Strength Screen - The "Recent Price Strength" screen is a unique short-term trading strategy that helps identify stocks with strong fundamentals capable of maintaining an uptrend [2]. - Stocks that pass this screen are trading in the upper portion of their 52-week high-low range, indicating bullish sentiment [2]. Group 2: Knot Offshore (KNOP) Analysis - Knot Offshore (KNOP) has shown a solid price increase of 33.4% over the past 12 weeks, reflecting investor confidence in its potential upside [3]. - Over the last four weeks, KNOP's price increased by 34.4%, indicating that the upward trend is still intact [4]. - Currently, KNOP is trading at 88.2% of its 52-week high-low range, suggesting it may be on the verge of a breakout [5]. Group 3: Fundamental Strength - KNOP holds a Zacks Rank 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks based on earnings estimate revisions and EPS surprises [5]. - The stock has an Average Broker Recommendation of 1 (Strong Buy), indicating strong optimism from the brokerage community regarding its near-term price performance [6]. Group 4: Broader Investment Opportunities - In addition to KNOP, there are several other stocks that meet the criteria of the "Recent Price Strength" screen, providing additional investment opportunities [7]. - The article suggests that investors can explore over 45 Zacks Premium Screens tailored to different investing styles to identify potential winning stocks [7].

These are only a few of the key metrics included in KNOT Offshore Partners's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, KNOP looks like an impressive value stock at the moment. One company value investors might notice is KNOT Offshore Partners (KNOP) . KNOP is currently sporting a Zacks Rank of #1 (Strong Buy) and an A for Value. Value investors also frequently use the P/S ratio. This metric is found by divid ...

Financial Data and Key Metrics - Q1 2024 revenues were $76.6 million, operating income was $19.7 million, net income was $7.4 million, and adjusted EBITDA was $47.5 million [11] - The company ended Q1 with $55 million in available liquidity, consisting of $50 million in cash and cash equivalents plus $5 million in undrawn credit facilities [11] - Vessel utilization was 97.6% in Q1, with no impact from planned drydocking [11] - A cash distribution of $0.026 per common unit was declared and paid in early May [11] Business Line Data and Key Metrics - In Brazil, Vigdis Knutsen was delivered to Shell in March for a three-year time charter, and Anna Knutsen's charter with TotalEnergies was extended to April 2026 [5] - Ingrid Knutsen and Torill Knutsen will commence charters with Eni in Q4 2024, with Ingrid Knutsen's charter deferred from April to October [6] - Torill Knutsen is undergoing repairs to a broken generator rotor, expected to be completed in Q2 or Q3, with repair costs and loss of hire covered by insurance [6] - Dan Sabia is due for redelivery in June, with focus on near-term deployment for Dan Cisne, Dan Sabia, and Hilda Knutsen [7] Market Data and Key Metrics - In the North Sea, Hilda Knutsen, Torill Knutsen, and Bodil Knutsen continued to operate under time charters to Knutsen NYK, with Bodil Knutsen delivered to Equinor at the end of March [12] - Dan Cisne was deployed on short-term conventional tanker work after redelivery in December 2023, with upgrades for North Sea shuttle tanker work planned [13] - Significant growth is anticipated in production fields served by shuttle tankers, with reported orders of around six vessels in early 2024, including three by the sponsor for delivery in 2026 and 2027 [14] Company Strategy and Industry Competition - The company remains positive on industry dynamics and its positioning, with significant growth expected in production fields served by shuttle tankers [14] - A material shortage of shuttle tanker capacity is projected in the coming years, with new build orders expected to service large new production volumes [8] - The company has a strong contracted revenue position of $683 million at the end of Q1, with fixed contracts averaging two years in duration and options averaging a further two years [15] Management Commentary on Operating Environment and Future Outlook - Management highlighted the consistency of revenues and operating income across quarters and 12-month periods [9] - The company remains financially resilient with a strong contracted revenue position and sufficient cash generation for operations and debt repayment [15] - The average age of the fleet is 9.9 years, well within the useful life model of 23 years [16] Other Important Information - The company completed refinancing of the loan secured by Hilda Knutsen, reducing overall liabilities by $42 million [17] - $880 million out of $925 million in debt facilities are secured by vessels, with two revolving credit facilities totaling $50 million unsecured [20] - The company has five existing vessels and five under construction eligible for purchase by the partnership, subject to board approval [22] Q&A Session Summary Question: North Sea Market Activity - Management anticipates significant demand increase in the North Sea once new FPSOs come online, with focus on marketing Hilda Knutsen and Dan Cisne [33][36] Question: Incremental Demand from New FPSOs - Management expects sufficient incremental demand to cover under-utilized vessels, with Hilda Knutsen and Dan Cisne available for North Sea work [44][45] Question: Dan Cisne Upgrades - Upgrades for Dan Cisne are expected to take around a month to six weeks, with costs not material to financial results [52][53] Question: Dan Sabia Market Position - Dan Sabia is being marketed in Brazil despite not being ideally sized, with potential for client demand [55] Question: Torill Knutsen Downtime - Torill Knutsen experienced around a month of downtime in Q1 due to a broken generator rotor, with earnings impacted but not fully lost [58] Question: Opex and G&A Trends - Opex increased slightly due to voyage expenses, with G&A remaining stable [64] Question: Interest Rate Hedges - The company added a small amount of interest rate hedges in Q1, staying within policy range for fixed-rate debt [66][67] Question: New Build Pricing Impact - New build pricing does not significantly impact existing fleet pricing, with demand dynamics being the primary driver [73][74] Question: Share Buybacks - The company prioritizes filling contract gaps and improving liquidity before considering share buybacks [79][82] Question: Dividend and Debt Reduction - Shareholders expressed support for maintaining the current dividend and aggressively reducing debt, with no immediate plans for drop-down acquisitions [89][93]

Financial Performance and Distribution - The company reduced its quarterly common unit distribution to $0.026 per unit starting from the fourth quarter of 2022, which may impact its ability to raise capital[34]. - The company’s cash distribution policy may limit its growth potential as it prioritizes distributions on Series A Preferred Units over reinvestment into operations[35]. - The company must make substantial capital expenditures to maintain its fleet, which reduces cash available for distribution[37]. - The company’s ability to generate cash from operations is influenced by various factors, including charter rates, fleet utilization, and operating costs[33]. - The company’s financing agreements impose restrictions that may limit its ability to pay distributions, including failure to meet financial covenants and other operational conditions[51]. - Distribution payments on common units are prohibited until all accrued and unpaid distributions on Series A Preferred Units are paid[150]. - The company can borrow money to pay distributions, which may reduce available credit for business operations[162]. - Unitholders may have liability to repay distributions if they are found to be impermissible under the Marshall Islands Limited Partnership Act[166]. Operational Challenges - In 2023, the company experienced approximately 192 off-hire days due to the scheduled drydocking of five vessels, which could adversely affect cash available for distribution[40]. - The company may experience operational problems with vessels that could reduce revenue and increase costs, impacting overall financial results[29]. - The company faces risks related to macroeconomic conditions, including inflation, interest rates, and supply chain constraints, which may impact its financial performance[29]. - Throughout 2023, the company experienced significant increases in costs due to inflation, supply chain disruptions, and labor shortages, which may continue to affect operations in 2024[72]. - Supply chain disruptions and shortages of essential materials may adversely impact the company's operations and ability to meet customer demands[71]. - The partnership's operations are subject to risks from outbreaks of infectious diseases, which could disrupt supply chains and operational capabilities[117]. - Increased operational costs may arise from compliance with enhanced safety and security requirements due to heightened environmental and security concerns[110]. Customer Dependency and Revenue Generation - The company is dependent on charters for revenue generation, with several vessels, including Hilda Knutsen and Torill Knutsen, having charters expiring in 2024 with no firm contracts beyond that time[41]. - For the year ended December 31, 2023, key customers accounted for significant portions of revenue: Knutsen Shuttle Tankers Pool AS (10%), Brazil Shipping I Limited (12%), Equinor ASA (13%), Repsol Sinopec Brasil B.V. (13%), Total Energies (14%), and Fronape International Company (18%)[59]. - The company derives all of its time charter and bareboat revenues from eleven customers, indicating a high dependency on a limited customer base[59]. - If the company loses a key customer, it may struggle to obtain replacement long-term charters, exposing it to a volatile spot market[60]. Debt and Financing - As of December 31, 2023, the company had consolidated debt of approximately $963.0 million, with all revolving credit facilities fully drawn[43]. - The company entered into a new $60 million senior secured term loan on April 5, 2024, to replace a $100 million facility, subject to definitive documentation and closing conditions[43]. - The company’s ability to service or refinance its debt is contingent on its financial and operating performance, which may be affected by economic conditions[44]. - Approximately $63.4 million of the partnership's debt is due to be repaid or refinanced during 2024, with potential challenges in refinancing on satisfactory terms[121]. Market and Competitive Environment - The company faces substantial competition for long-term, fixed-rate charters, which may impact its ability to expand relationships with existing customers and obtain new ones[80]. - An increase in global shuttle tanker capacity without a corresponding increase in demand may adversely affect hire rates and vessel values, impacting financial performance[81]. - The company’s growth depends on the demand for shuttle tanker transportation services, which may be affected by persistent low oil prices[29]. - The company’s growth is contingent on the demand for shuttle tanker transportation services, which is influenced by external factors beyond its control[66]. Regulatory and Compliance Issues - Compliance with safety and vessel requirements may incur significant costs, affecting revenue and cash available for distribution[83]. - Compliance with new climate regulations may increase operational costs and require installation of new emission controls, impacting revenue generation[89]. - The SEC has proposed rules requiring public companies to disclose material climate-related risks and GHG emissions, which may lead to increased compliance costs[92]. - The partnership agreement designates the Court of Chancery of the State of Delaware as the exclusive forum for certain disputes, potentially limiting unitholders' options[174]. - Tax obligations in various jurisdictions may reduce cash available for distribution to unitholders, with potential challenges from tax authorities[177]. Environmental, Social, and Governance (ESG) Factors - Increased scrutiny on ESG practices may hinder access to capital, as investors focus on companies' environmental and social governance[91]. - The Initial IMO GHG Strategy aims for a 40% reduction in carbon intensity for international shipping by 2030, compared to 2008 levels[88]. - The 2023 IMO GHG Strategy sets a goal of achieving net-zero GHG emissions from international shipping by around 2050, with interim targets of a 20% reduction by 2030 and 70% by 2040[88]. - Long-term climate change mitigation efforts may reduce demand for oil, adversely affecting shuttle tanker services[90]. - The partnership's operations are significantly impacted by extensive and changing environmental regulations, including the IMO 2020 sulfur content requirement, which reduced the maximum sulfur content in marine fuels from 3.5% to 0.5%[109]. Management and Governance - KNOT owns 28.4% of the common units and all Class B Units, which may lead to conflicts of interest affecting unitholder interests[134]. - The partnership agreement limits unitholders' voting rights, allowing common unitholders to elect only four of the seven board members[132]. - The general partner has significant influence over board decisions, which may not align with the interests of common unitholders[136]. - The partnership agreement discourages removal of the current management without KNOT's consent, which could impact unitholder influence[143]. Fleet and Operations - As of April 11, 2024, the company had a fleet of eighteen shuttle tankers[196]. - The average remaining term of the charters for the vessels in the fleet is 2.0 years, with options to extend by an additional 2.1 years on average[201]. - The company aims to generate stable cash flows and provide sustainable quarterly distributions to unitholders through strategic acquisitions and long-term charters[204]. - The company was formed to operate shuttle tankers under long-term charters, defined as five years or more[187]. - The company has a strategy to expand operations in high-growth regions such as the North Sea and Brazil[204].

Financial Performance - 4Q 2023 revenues were $73.0 million[11] - 4Q 2023 operating income was $18.1 million[11] - 4Q 2023 net income showed a loss of $5.3 million, after accounting for an unrealized loss of $8.9 million on derivatives[11] - 4Q 2023 adjusted EBITDA was $45.7 million[11] - Available liquidity as of December 31, 2023, was $63.9 million, all in cash and cash equivalents[11] Contractual Developments - Repsol exercised a 1-year extension option for Carmen Knutsen, commencing in January 2024, with a further 1-year option available[13] - Transpetro extended its bareboat charter for Dan Sabia to June 2024[13] - Windsor Knutsen secured a new time charter commencing February-May 2025 for 2 years fixed[13] - Tordis Knutsen and Lena Knutsen both secured a 1-year extension on their contract to Shell, seeing them employed until mid-2027[4] - Brasil Knutsen was substituted into the time charter with Equinor previously due for Windsor Knutsen, commencing 4Q 2024-1Q 2025 and lasting 1 or 2 years fixed and the potential for up to 2x 1-year extensions[26] Fleet Utilization and Outlook - Fleet operated with 99.6% utilization for scheduled operations, and 96.0% utilization taking into account the scheduled drydocking of the Torill Knutsen and the Ingrid Knutsen[11] - Remaining contracted forward revenue is $699 million, excluding charterer's options, and excluding contracts agreed or signed after December 31, 2023[16] - These contracts average 2.0 years of fixed periods, plus 2.1 years of charterers' options[16]

KNOT Offshore Partners LP (NYSE:KNOP) Q4 2023 Earnings Conference Call February 27, 2024 9:30 AM ET Company Participants Derek Lowe - Chief Executive Officer & Chief Financial Officer Conference Call Participants Liam Burke - B. Riley Poe Fratt - Alliance Global Partners Jim Altschul - Aviation Advisory Service Operator Hello. My name is Drew and I will be your conference operator today. At this time, I would like to welcome everyone to the KNOT Offshore Partners Fourth Quarter 2023 Earnings Results Confere ...

On the Slide 3, we have the financial and operational headlines for Q3. Revenues were $72.7 million, operating income $20.6 million, net income $12.6 million, and adjusted EBITDA $48.1 million. I will now turn the call over to your host, Derek Lowe. Please go ahead. On Slide 5, our outlook remains positive on both industry dynamics and the partnership's positioning to participate fruitfully in our markets. The net supply of shuttle tankers into the global fleet appears very constrained with only five new ve ...

5 6 Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure used by management and external users of our financial statements. Please see the Appendices for a definition of Adjusted EBITDA. Second Quarter 2020 2023 2027 2028 2021 2022 2024 2025 2026 2023 (1) Shell Shell Oil major Insurance PetroChina Windsor B Equinor KNOT Equinor Bodil * II | |an Transpetro (Bareboat charter) Transpetro Fortaleza Transpetro (Bareboat charter) Transpetro Recife Repsol Carmen E Eni KNOT Hilda * 国 100 KNOT Eni Torill ...

Financial Data and Key Metrics Changes - The company reported a cash and cash equivalents balance of $63.1 million at the end of the quarter, with a reduction in the current portion of long-term debt following successful refinancings [18][22] - Adjusted EBITDA for the second quarter was solid, despite recognizing non-cash impairments totaling $49.6 million related to two smaller vessels [16][18] - The partnership had $620 million of forward contracted revenue as of June 30, 2023, with firm charters averaging two years remaining [19][34] Business Line Data and Key Metrics Changes - The fleet operated with 99.3% utilization for scheduled operations and 95.5% utilization when accounting for scheduled dry dockings [29][22] - A new time charter contract for the Brasil Knutsen was agreed upon, set to commence in January 2024 for a fixed period of one year [31] - The company successfully extended the bareboat charter for the Dan Cisne with Transpetro, which will now run until the end of December 2023 [30] Market Data and Key Metrics Changes - The Brazilian market is tightening, with a limited newbuild order book and increasing demand for shuttle tankers due to offshore oil production growth [34][20] - The North Sea market is expected to take several more quarters to recover, while the Brazilian market shows signs of improvement [34][20] Company Strategy and Development Direction - The company is focused on securing additional contract coverage and rebuilding liquidity, prioritizing long-term charter visibility over immediate acquisitions [66][102] - Management expressed confidence in the mid to long-term outlook for the business, particularly in Brazil, due to the anticipated startup of new FPSOs [20][21] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the need for stability in liquidity and the importance of maintaining sufficient working capital to operate the fleet [4][23] - The company is optimistic about the future, citing a positive mid to long-term outlook driven by tightening market conditions and operational improvements [20][21] Other Important Information - The company has largely addressed its near-term refinancing needs, successfully closing a new $240 million senior secured term loan facility [22][14] - The partnership paid its 41st consecutive distribution since its IPO in 2013, reflecting ongoing commitment to returning value to shareholders [29] Q&A Session Questions and Answers Question: What needs to happen for the partnership to return to higher payouts or resume drop-downs? - Management indicated that the focus is currently on securing long-term charter visibility and building liquidity, with drop-downs not being a priority at this time [39][66] Question: Is it feasible to move the Torill and Hilda vessels to the Brazilian market? - Management stated that while it is an option, timing and costs are critical factors, and they are evaluating this possibility carefully [40][46] Question: Can you explain the dynamics of the balance sheet changes, particularly the increase in long-term debt? - Management clarified that the increase in long-term debt is primarily due to reclassification related to refinancing, and the drop in long-term assets is due to depreciation and impairments [62][78] Question: How are the new charter rates compared to previous contracts? - Management noted that new charter rates reflect a tightening market, but providing specific percentage increases would be misleading due to the variability in contracts [105][121] Question: What is the timeline for potential acquisitions? - Management confirmed that while there are vessels available for acquisition, the current focus is on liquidity and securing charters rather than pursuing new acquisitions [100][102]

Financial Data and Key Metrics Changes - The company announced a quarterly cash distribution for the 40th consecutive quarter, albeit at a reduced level [53] - The adjusted EBITDA for the first quarter was solid and consistent with previous periods [36] - Cash and cash equivalents at the end of the quarter stood at $52.4 million, with a significant portion of total debt hedged against interest rate changes [27][28] Business Line Data and Key Metrics Changes - The fleet operated at 100% utilization for scheduled operations, with 96.6% utilization when accounting for scheduled drydocking [21] - The company secured new three-year time charter contracts for two vessels, enhancing revenue visibility [32] Market Data and Key Metrics Changes - The North Sea market is experiencing softness, but there are expectations for recovery, while the Brazilian market is tightening [3][49] - The company anticipates that the limited global fleet orderbook of only five new shuttle tankers until 2026 will drive charter rates up in Brazil and the North Sea [40] Company Strategy and Development Direction - The company is focused on securing additional contract coverage and improving liquidity, with a strategy to avoid dropdowns until market conditions improve [51][135] - Management emphasized the importance of signing new charters at favorable rates to enhance revenue and liquidity [133][134] Management Comments on Operating Environment and Future Outlook - Management acknowledged the current softness in the North Sea market but expressed optimism about long-term recovery [2][49] - The company is monitoring inflationary pressures and interest expenses closely, with a focus on maintaining operational efficiency [50] Other Important Information - The company is in discussions with lenders regarding refinancing existing credit facilities, with expectations of favorable terms [24][22] - The average age of the fleet is 8.9 years, with an estimated useful life of 23 years for each vessel [48] Q&A Session Summary Question: What is the expected impact of the transition from bareboat to time charters on revenue and costs? - Management indicated that while there will be higher revenue and operating expenses due to the transition, the overall impact on operating income for Q2 is expected to be marginally positive [66][79] Question: How will the refinancing affect liquidity? - The refinancing is expected to be a continuation of existing finance, maintaining similar terms and not significantly impacting liquidity [69][96] Question: What is the company's strategy regarding dropdown vessels? - Management stated that dropdowns would be evaluated carefully, with a preference to avoid them until market conditions improve, particularly given the current unit price [135][137]