VANCOUVER, British Columbia, May 28, 2020 (GLOBE NEWSWIRE) — Legend Power® Systems Inc. (TSX.V: LPS) (“Legend Power” or the “Company”), a global leader in onsite energy management technology, today reported its Q2 fiscal 2020 financial results for the six months ended March 31, 2020. A conference call to discuss the results is set for 4:15pm EST today (dial in details below). A complete set of Financial Statements and Management’s Discussion & Analysis has been filed at www.sedar.com. All dollar figures are quoted in Canadian dollars.
Financial Highlights for the three months ending March 31, 2020Revenue of $676k down 12% year-over-year from $769k reported in Q2 2019;Gross margin of 32% down from 54% in the quarter a year-ago, due to sales incentives offered in the quarter;Adjusted EBITDA loss of $1.5 million versus $1.3 million loss in Q2 2019;Net loss of $1.5 million versus the $1.4 million loss in Q2 2019; andCash of $2.6 million, no debt, and $4.9 million of working capital at March 31, 2020.Working Capital Update to May 28, 2020The Company received payment from customers for in excess of 50% of receivables at March 31, 2020;During the month of May 2020, the Company received U.S. and Canadian COVID-19 related subsidies totaling approximately $250k, all of which are anticipated to be forgiven;All sales during quarter were from existing, paid-for inventory;In response to COVID-19, on April 1, 2020 management implemented a pro-active cost reduction and continuity plan. It is anticipated that the cost cutting measures will reduce overall expenditures by approximately $1 million during the period from April 1, 2020 to September 30, 2020. These cost-containment efforts can be extended, if required, and pared back or removed as the economy gets back on track;Current cash position of $3.3 million up $700k from March 31, 2020; receipt of additional government subsidies anticipated.Objectives through fiscal year-end (September 30)Establish presence with large multi-family operator in a new major metropolitan centre;Sign at least one deal with an Energy Services Company (ESCO) and establish a relationship with a second;Leverage all COVID-19 related government small business programs;Ship first SmartGATE 2.0 platform to customer in Q4/20;Enter industrial vertical and sign first SmarGATE Insights led transaction with significant customer.Management Commentary
“Like most industries, the last few weeks of our the second quarter of 2020 saw a significant decline of sales activity across all of our markets as school boards and commercial property owners worked to understand COVID-19 prior to temporarily closing their properties,” said Legend Power Systems CEO Randy Buchamer. “In response, we took quick action in March to implement cost reduction measures of approximately $1 million for our third and fourth quarters. This together with receipt of various government subsidies and a significant inflow of funds from customer receivables has significantly shored up our working capital. I am very pleased to report that subsequent to quarter end we are seeing some sectors of our business reopen and our sales activities have re-started.”Financial summary for the three and six months ended March 31, 2020 and 2019¹ Gross margin is based on a blend of both equipment and installation revenue.
² Adjusted EBITDA is a non-IFRS financial measure. See EBITDA Reconciliation for details.Revenue for the second quarter of 2020 was $676,359, a 12% decrease from $769,443 in the same quarter of 2019. Revenue for the six months ended March 31, 2020 was $1,679,688, a 43% increase from $1,172,843 in the same period 2019.Gross margin in the second quarter of fiscal 2020 was 32%, a decrease from 54% in second quarter of fiscal 2019. Gross margin in the first half of fiscal 2020 was 26%, a decrease from 63% over the first half of 2019.  The lower gross margins experienced in the first half of 2020 was due primarily to:two projects completed for an early adopter, marquee, New York City customer during Q1 of 2020. Early projects in new regions typically involve higher overall install costs, in particular electrical contractor costs due to a significant learning curve in understanding the nuances of installing a new and unfamiliar technology; anda disproportionate amount of total revenue derived from installation services during the six-month period, which has historically yielded lower gross margins. The fiscal 2020 Q1 negative effect on gross margin was offset by stronger margins in fiscal Q2 of 2020 which were the result of a larger relative amount of high margin equipment sales.Adjusted EBITDA for the second quarter of fiscal 2020 was negative $1,467,805, compared with negative $1,285,984 in the second quarter of fiscal 2019. Adjusted EBITDA for the first half of fiscal 2020 decreased to negative $2,792,966, from negative $2,334,336 in the first half of fiscal 2019.Net loss for the second quarter of fiscal 2020 was $1,516,627, compared with a net loss of $1,402,451 in the second quarter of fiscal 2019. Net loss for the first six months of 2020 was $2,998,825, an increase of 20% from a loss of $2,493,783 in the same period of 2019. Lower gross margins were the prime contributor to the increase in net loss compared with the same six-month period in fiscal 2019. The Company’s operating expenses for the second quarter of 2020 were $1,736,091, down from $1,845,557 in the same quarter of 2019 and for the first six months of fiscal 2020 were $3,356,522 compared with $3,330,400 in the same six months of 2019.CONFERENCE CALL DETAILS:The Company has scheduled a conference call to provide a business update and discuss its Q2 2020 financial results for Thursday, May 28, 2020 at 4:15PM ET (1:15PM PT). The call will be hosted by Randy Buchamer, President & Chief Executive Officer and Steve Vanry, Chief Financial Officer. About Legend Power® Systems Inc.Legend Power® Systems Inc. (www.legendpower.com) is a global leader in onsite energy management technology. They help buildings to overcome grid volatility challenges common to utilities around the world. Legend’s industry-proven SmartGATE™ enables dynamic power management of an entire building.The proprietary and patented system reduces total energy consumption and power costs, while also maximizing the life of electrical equipment. Legend Power’s unique solution is also a key contributor to both corporate sustainability efforts and the meeting of utility energy efficiency targets.For further information, please contact:Steve Vanry, CFO
+ 1 604 671 9522
[email protected]Sean Peasgood, Investor Relations
+ 1 647 503 1054
[email protected]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 StatementsThis 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 to 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.

Bay Street News