Kraken Robotics Inc. (TSX-V: PNG, OTCQB: KRKNF) ("Kraken" or the
"Company"), announced it has filed financial results for the
quarter ended March 31, 2023 (“Q1 2023”). "With more than $120
million of large contract wins since the beginning of 2022, we are
seeing an acceleration in end market demand driven mainly by a
heightened geopolitical focus on maritime security and growth in
offshore renewable energy," said President and CEO Greg Reid. “We
have started 2023 on solid footing. Q1 is seasonally our slowest
quarter, and we expect to see accelerating results throughout the
year driven by defense contracts in hand and normal ramping of
activity in our services business focused on offshore wind.”
Q1 2023 Financial
Highlights
- Total revenue
was $7.6 million versus $5.5 million for the quarter ending March
31, 2022 (“Q1 2022”), a 38% increase.
- Products revenue
was $5.3 million compared to $3.7 million in Q1 2022, a 43%
increase, which was driven by a record number of synthetic aperture
sonar (SAS) being delivered, work on our large subsea battery order
received in Q4 2022 as well as production of a KATFISH™ high-speed
towed synthetic aperture sonar (SAS) system.
- Services revenue
increased 26% to $2.3 million over Q1 2022, driven by completion of
a Robotics-as-a-Service (RaaS) contract utilizing our KATFISH
system.
- Gross margins in
Q1 2023 were 59.4% as compared to 32.9% in Q1 2022 and increased
due to a change in product and project mix.
- Adjusted EBITDA1
for the quarter was $0.9 million compared to an Adjusted EBITDA
loss of $0.4 million in the comparable quarter. The impact was due
to higher revenue and improved gross margins.
- Net loss in the
quarter was $1.3 million, compared to net loss of $2.6 million in
Q1 2022.
- Cash balance at
March 31, 2023 was $4.0 million. Subsequent to the quarter,
payments on large projects totalling over $8.0 million were
received.
- Total assets
were $65.2 million at March 31, 2023, compared to $63.9 million at
March 31, 2022.
- At March 31,
2023, Kraken had $13.8 million in previously awarded non-repayable
funding to draw upon from government agencies and project partners
for research and development. Of this, $2.2 million of cash has
been received for contracts to be completed.
Q1 2023 Operational
Highlights
Product Business
- During the
quarter, Kraken announced $2.8 million in SAS purchase orders from
defence customers. These systems will be integrated to Autonomous
Underwater Vehicles (AUVs) for use in minehunting and security
applications.
- January 10,
2023: Appointed David Shea to Chief Technology Officer.
Service Business
- Q1 is seasonally the slowest quarter
for our Services business given offshore weather conditions in our
main operating geographies.
- During Q1, Kraken completed a
200-kilometer KATFISH seabed survey in coastal waters of a large
Asia Pacific country.
- During Q1, Kraken completed several
smaller sub-seabed services jobs (cable depth of burial and boulder
detection) for offshore wind projects.
Operational Highlights Subsequent to End
of Q1 2023
- May 15, 2023:
$1.1 million of SAS orders.
- May 9, 2023: $16
million order for subsea batteries.
- April 20, 2023:
$3 million order for subsea power systems.
- April 18, 2023:
$4 million order from a NATO navy.
Outlook for 2023
Kraken Robotics reiterates its financial
guidance provided on May 1, 2023. For fiscal 2023, we expect
revenue to be in the $66 - $78 million range and adjusted EBITDA in
the $12 - $17 million range. The mid-point of our guidance range
($72 million in revenue and $14.5 million in EBITDA) implies
revenue growth of 76% over 2022 and adjusted EBITDA growth of 275%.
Capex in 2023 is expected to be $5-$6 million.
NON-GAAP MEASURES
Non-GAAP measures, including non-GAAP financial
measures and non-GAAP ratios not recognized under IFRS are provided
where management believes they assist the reader in understanding
Kraken's results. The Company utilizes the following terms for
measurement within the MD&A that do not have a standardized
meaning or definition as prescribed by IFRS and therefore may not
be comparable with the calculation of similar measures by other
entities and should not be considered in isolation or as a
substitute for measures of performance prepared in accordance with
GAAP.
Adjusted EBITDA and Adjusted EBITDA
Margin
The Company believes that, in addition to
conventional measures prepared in accordance with IFRS, Adjusted
EBITDA is useful to securities analysts, investors and other
interested parties in evaluating operating performance by
presenting the results of the Company on a basis which excludes the
impact of certain non-operational items which enables the primary
readers of the MD&A to evaluate the results of the Company such
that it was operating without certain non-cash and non-recurring
items. Adjusted EBITDA is calculated as earnings before interest
expense, interest income, income taxes, depreciation and
amortization, stock-based compensation expense and non-recurring
impact transactions, if any. Adjusted EBITDA Margin is defined at
Adjusted EBITDA divided by Total Revenue.
|
|
|
Q1 2023 |
Q1 2022 |
Net Loss |
(1,336 |
) |
(2,559 |
) |
Income Tax |
86 |
|
(135 |
) |
Financing costs |
553 |
|
884 |
|
Foreign exchange (loss) gain |
141 |
|
56 |
|
Share-based compensation |
161 |
|
41 |
|
Depreciation and Amortization |
1,263 |
|
1,141 |
|
EBITDA - excluding restructuring and other
costs |
868 |
|
(572 |
) |
Acquisition costs and restructuring |
35 |
|
204 |
|
Adjusted EBITDA |
903 |
|
(368 |
) |
Adjusted EBITDA Margin |
11.9% |
|
- |
|
Gross margin is defined as revenue less cost of total sales.
Gross margin percentage is defined as gross margin dividend by
total sales.
|
Q1 2023 |
Q1 2022 |
Revenue |
7,578 |
5,512 |
Cost of sales |
3,075 |
3,696 |
Gross margin |
4,503 |
1,816 |
Gross margin percentage |
59.4% |
32.9% |
ABOUT KRAKEN ROBOTICS INC.
Kraken Robotics Inc. (TSX.V: PNG) (OTCQB: KRKNF)
is a marine technology company providing complex subsea sensors,
batteries, and robotic systems. Our high-resolution 3D acoustic
imaging solutions and services enable clients to overcome the
challenges in our oceans - safely, efficiently, and sustainably.
Kraken Robotics is headquartered in Canada and has offices in North
and South America and Europe. Kraken is ranked as a Top 100 marine
technology company by Marine Technology Reporter.
LINKS:
www.krakenrobotics.com
SOCIAL MEDIA:
LinkedIn www.linkedin.com/company/krakenrobotics Twitter
www.twitter.com/krakenrobotics Facebook
www.facebook.com/krakenroboticsinc YouTube
www.youtube.com/channel/UCEMyaMQnneTeIr71HYgrT2A Instagram
www.instagram.com/krakenrobotics
For further information:
Stephen Griffin, Group Marketing
ManagerStephen.Griffin@krakenrobotics.com
Joe MacKay, Chief Financial Officer(416)
303-0605jmackay@krakenrobotics.com
Greg Reid, President & CEO(416)
818-9822greid@krakenrobotics.com
Sean Peasgood, Investor Relations(647)
955-1274sean@sophiccapital.com
Forward Looking Statements
The Company and its management believe that the
statements regarding 2023 revenue and adjusted EBITDA contained in
this press release are reasonable as of the date hereof, are based
on management's current views, strategies, expectations,
assumptions and forecasts, and have been calculated using
accounting policies that are generally consistent with the
Company's current accounting policies. These statements are
considered future-oriented financial outlooks and financial
information (collectively, "FOFI") under applicable securities
laws. These statements and any other FOFI included herein have been
approved by management of the Company as of the date hereof. Such
FOFI are provided for the purposes of presenting information about
management's current expectations and goals relating to the
Company's expected growth in its Products and Services groups.
However, because this information is highly subjective and subject
to numerous risks, including the risks discussed in the disclaimer
for forward looking statements below, it should not be relied on as
necessarily indicative of future results. Should one or more of
these risks or uncertainties materialize, or should assumptions
underlying the FOFI prove incorrect, actual results may vary
materially from those described herein as intended, planned,
anticipated, believed, estimated or expected. Although management
of the Company has attempted to identify important risks,
uncertainties and factors which could cause actual results to
differ materially, there may be others that cause results not to be
as anticipated, estimated or intended. The Company disclaims any
intention or obligation to update or revise any FOFI, whether as a
result of new information, future events or otherwise, except as
required by securities laws.
Certain information in this news release
constitutes forward-looking statements. When used in this news
release, the words "may", "would", "could", "will", "intend",
"plan", "anticipate", "believe", "seek", "propose", "estimate",
"expect", and similar expressions, as they relate to the Company,
are intended to identify forward-looking statements. In particular,
this news release contains forward-looking statements with respect
to, among other things, business objectives, expected growth,
results of operations, performance, business projects and
opportunities and financial results. These statements involve known
and unknown risks, uncertainties and other factors that may cause
actual results or events to differ materially from those
anticipated in such forward-looking statements. Such statements
reflect the Company's current views with respect to future events
based on certain material factors and assumptions and are subject
to certain risks and uncertainties, including without limitation,
changes in market, competition, governmental or regulatory
developments, general economic conditions and other factors set out
in the Company's public disclosure documents. Many factors could
cause the Company's actual results, performance or achievements to
vary from those described in this news release, including without
limitation those listed above. These factors should not be
construed as exhaustive. Should one or more of these risks or
uncertainties materialize, or should assumptions underlying
forward-looking statements prove incorrect, actual results may vary
materially from those described in this news release and such
forward-looking statements included in, or incorporated by
reference in this news release, should not be unduly relied upon.
Such statements speak only as of the date of this news release. The
Company does not intend, and does not assume any obligation, to
update these forward-looking statements. The forward-looking
statements contained in this news release are expressly qualified
by this cautionary statement.
Neither the TSX Venture Exchange Inc. nor its
Regulation Services Provide (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release, and the OTCQB has neither
approved nor disapproved the contents of this press release.
1Adjusted EBITDA is a non-GAAP financial measure and gross
margin, and adjusted EBITDA margin are non-GAAP ratios, in each
case with no standard meaning under IFRS, and may not be comparable
to similar financial measures disclosed by other issuers. Refer to
the "Non-GAAP Measures" section of this press release.
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