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Kraken Robotics Reports Strong Q2 2024 Financial Results

ST. JOHN’S, Newfoundland and Labrador, Aug. 22, 2024 (GLOBE NEWSWIRE) — Kraken Robotics Inc. (TSX-V: PNG, OTCQB: KRKNF) (“Kraken” or the “Company”), announced it has filed financial results for the quarter ended June 30, 2024 (“Q2 2024”). Please refer to the unaudited Consolidated Financial Statements and Management’s Discussion and Analysis (“MD&A”) for the quarter ended June 30, 2024, filed on www.sedarplus.ca for more information. Unless otherwise specified, all dollar amounts are denominated in Canadian dollars.

Q2 2024 Financial Highlights

Year-to-date June 30, 2024

Q2 2024 Financial Summary

($ 000s) Unaudited Q2 2024 Q2 2023 % change YTD 2024 YTD 2023 % change
Consolidated revenue 22,758   13,655   67 % 43,633   21,233   105 %
Gross profit 1 11,607   7,744   50 % 20,953   12,247   71 %
Gross margin percentage 1 51 % 57 %   48 % 58 %  
Adjusted EBITDA 1 5,444   3,040   79 % 9,545   3,943   142 %
Adjusted EBITDA percentage 1 24 % 22 %   22 % 19 %  
Net Income 2,609   1,997   31 % 4,784   661   624 %
             

Management Comments
“We are pleased to report another strong growth quarter with adjusted EBITDA1 margins of 24% versus 22% in the year-ago quarter. During the quarter, we strengthened our balance sheet with a $20 million equity financing and $45 million of new committed credit facilities. The demand environment for our technology solutions has never been better and the opportunities we are seeing in both our defense and offshore energy markets continues to grow,” said Kraken President and CEO Greg Reid.

Recent Company Highlights and Industry Observations

2024 Financial Guidance Unchanged

Our annual financial guidance remains unchanged. Kraken expects revenue between $90.0 million to $100.0 million and Adjusted EBITDA1 in the $18.0 million to $24.0 million range. Capital and intangible asset expenditures in 2024 are expected to range from $6.0 million to $7.0 million. Our 2024 outlook is driven by contracts in hand and reflects strength across both our Product and Service groups addressing defense and offshore energy customers.

($ 000s) Actual 2024 Guidance Range Implied Change
  2023 Low High Low High
Consolidated revenue 69,581   90,000   100,000   29 % 44 %
Adjusted EBITDA 1 14,094   18,000   24,000   28 % 70 %
Adjusted EBITDA percentage 1 20 % 20 % 24 %   400 bps
Capital expenditures/Intangible assets 7,557   6,000   7,000   -21 % -7 %


NON-IFRS MEASURES

Non-IFRS measures, including certain non-IFRS financial measures and non-IFRS ratios in this press release, are provided where management believes they supplement measures determined in accordance with IFRS and provide readers with an improved ability to evaluate the underlying performance of the Company. Non-IFRS financial measures and non-IFRS ratios do not have any standardized meaning prescribed under IFRS, and therefore they may not be comparable to similar measures employed by other companies. This data is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.

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 this press release 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.

($ 000s) Q2 2024 Q2 2023 2024   2023  
Net Income 2,609   1,997   4,784   661  
Income Tax 735   238   791   324  
Financing costs 559   418   947   971  
Foreign exchange loss 138   129   69   270  
Share-based compensation 30   98   87   259  
Impairment of goodwill   2,757     2,757  
Gain on extinguishment of contingent consideration   (4,044 )   (4,044 )
Depreciation and amortization 1,373   1,232   2,798   2,495  
EBITDA – excluding restructuring and acquisition costs 5,444   2,825   9,476   3,693  
Restructuring and acquisition costs   215   69   250  
Adjusted EBITDA 5,444   3,040   9,545   3,943  
Adjusted EBITDA Margin 24 % 22 % 22 % 19 %
         

Gross profit is defined as revenue less cost of total sales. Gross margin is defined as gross margin dividend by total sales.

  Q2 2024 Q2 2023 2024   2023  
Revenue 22,758   13,655   43,633   21,233  
Cost of sales 11,151   5,911   22,680   8,986  
Gross profit 11,607   7,744   20,953   12,247  
Gross margin 51 % 57 % 48 % 58 %
                 

Figure 1: Kraken KATFISH Towed Synthetic Aperture Sonar System

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:

Erica Kierstead, Director of Global Marketing
erica.kierstead@krakenrobotics.com

Joe MacKay, Chief Financial Officer
(416) 303-0605
jmackay@krakenrobotics.com

Greg Reid, President & CEO
(416) 818-9822
greid@krakenrobotics.com

Sean Peasgood, Investor Relations
(647) 955-1274
sean@sophiccapital.com

Forward Looking Statements

The Company and its management believe that the statements regarding 2024 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.

A photo accompanying this announcement is available at https://www.globenewswire.com/NewsRoom/AttachmentNg/f1e239e1-68b4-41df-85eb-8e96fb59ed5e

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