VANCOUVER, BC–(Marketwired – February 23, 2017) – Legend Power Systems Inc. (TSX VENTURE: LPS) today reported its first quarter 2017 financial results for the three months ended December 31, 2016. Currency amounts are in Canadian dollars.
Summary:
- Achieved revenue of $644,847
- Blended gross profit margin of 43%
- 9 unique customer transactions
- Total of 11 unit sales
- $58,622 average unit sales price
- Committed orders1 for 20 units
Corporate Update
The Legend Power sales team continued to increase opportunity flow in core target markets during the quarter. Several proof-of-concept deals are expected to move to full product rollouts as new opportunities and markets continue to materialize. Revenue of $644,847 was realized in the first quarter of fiscal 2017 and the company boasts a sizeable number of Committed orders.
In many ways, the beginning of Legend’s Fiscal year was the beginning of its transition from a startup entity to a growth stage company. The Company has a strengthened balance sheet, the product is a strong performer offering appreciable value, and the five pillars required to support a growth stage company are now in place. The five pillars are:
- Having the right people;
- Sufficient capital to fuel growth;
- The operational capacity to support growing sales;
- A proven product that meets or exceeds customer expectations; and
- Demonstrable customer success with anticipated sales growth.
The primary operational initiatives Legend Power is focused on are:
- Methodical sales growth — introduction of Legend to new geographical regions
- Implement major account management methodology
- Leverage marketing plan as an enabler and accelerator of sales
- Develop and introduce a professional “reseller franchise” offering
- Increase profitability
- Proactive cost management
- Margin improvement for installation component of sale
- Manage working capital requirements
- Improve field service levels to shorten sales cycle and increase customer satisfaction
- Deliver next generation product on time and on budget
Financial summary for the three month periods ended December, 2016 and 2015
| Three-months ended December 31 | ||||||||||
| (Canadian dollars) | 2016 | 2015 | Change | |||||||
| Revenue | 644,847 | 533,387 | 20.9 | % | ||||||
| Cost of sales | 369,688 | 392,161 | (5.7 | )% | ||||||
| Gross margin2 | 275,159 | 141,226 | 94.8 | % | ||||||
| Gross margin % | 42.7 | % | 26.5 | % | 16.2 | % | ||||
| Operating expenses | 748,947 | 671,597 | 11.5 | % | ||||||
| Operating expenses as % of sales | 116.1 | % | 125.9 | % | (9.8 | )% | ||||
| Adjusted EBITDA3 | (345,714 | ) | (372,941 | ) | 7.3 | % | ||||
| Net (loss)4 | (477,755 | ) | (530,130 | ) | (9.9 | )% | ||||
2 Gross margin is based on a blend of both equipment and installation revenue.
3 Adjusted EBITDA; for the three months ended December, 2016 and 2015, we are disclosing Adjusted EBITDA, which is a non-IFRS financial measure, as a supplementary indicator of operating performance. We define EBITDA as net income or loss before interest, income taxes, amortization, foreign exchange amounts and non-cash stock based compensation.
4 Before other items.
Financial Results and Corporate Update Conference Call Details:
| DATE: | Thursday, February 23, 2017 |
| TIME: | 10:00 am PT (1:00 pm ET) |
| DIAL-IN NUMBER: | Toronto (647) 788-4901 Toll Free – North America (+1)(877) 201-0168 |
| CONFERENCE ID: | 75247738 |
| REPLAY: | Available at: www.legendpower.com |
A complete set of the December 31, 2016 Condensed Interim Consolidated Financial Statements and Management’s Discussion & Analysis are available on Legend’s corporate website. To view these documents, visit: http://legendpower.com/investors/financial-statements/. Both documents are also filed on SEDAR (www.sedar.com (link is external)).
1 Committed orders is a non-IFRS measure, which is a supplementary indicator of sales activity.
We are presenting this measure because we believe it provides the reader a clearer and more current understanding of the Company’s sales activity which is typically not apparent until much later when components of a sale have achieved minimum revenue recognition criteria.
The measure does not have any standardized meaning under IFRS and therefore may not be comparable to similar measures presented by other issuers. The Company defines committed orders as the total number of units committed for purchase by customers, evidenced by either a purchase order, purchase agreement or both as at the date of this MD&A, which had not been recognized in revenue during the proceeding financial periods.
About Legend Power Systems Inc.
Legend Power Systems Inc. (www.legendpower.com) markets a proprietary device, the ‘Harmonizer’ that helps individual buildings reduce energy consumption through the utility-proven concept of Conservation Voltage Reduction, (CVR). Legend provides customers risk free energy savings, improves the value of their physical assets, and enhances their sustainability efforts. As an application with demand side benefits, Legend is also a key contributor toward utility conservation goals. Legend was recognized as the top performing cleantech company on the TSX Venture Exchange in 2015.
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
This Press Release may contain statements which constitute “forward-looking information”, including statements regarding the plans, intentions, beliefs and current expectations of the Company, its directors, or its officers with respect to the future business activities and operating performance of the Company. The words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect” and similar expressions, as they relate to the Company, or its management, are intended to identify such forward-looking statements. Investors are cautioned that any such forward-looking statements are not guarantees of future business activities or performance and involve risks and uncertainties, and that the Company’s future business activities may differ materially from those in the forward-looking statements as a result of various factors. Such risks, uncertainties and factors are described in the periodic filings with the Canadian securities regulatory authorities, including the Company’s quarterly and annual Management’s Discussion & Analysis, which may be viewed on SEDAR at www.sedar.com. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although 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 be as anticipated, estimated or intended. The Company does not intend, and does not assume any obligation, to update these forward-looking statements other than as may be required by applicable law.
For further information, please contact:
Randy Buchamer
CEO and President
+ 1 778 945 1501
rbuchamer@legendpower.com
Steve Vanry
CFO
+ 1 604 671 9522
svanry@legendpower.com
Sean Peasgood
Investor Relations
+ 1 416 565 2805
sean@sophiccapital.com