Revenue increases 91% year-over-year

ST. JOHN’S, NL–(Marketwired – November 30, 2016) – Kraken Sonar Inc. (TSX VENTURE: PNG) announced it has filed its financial results for the third quarter ended September 30, 2016. Additional information concerning the Company, including its condensed consolidated interim financial statements and related management’s discussion and analysis (“MD&A”) for the quarter ended September 30, 2016, can be found at Unless otherwise stated, all dollar amounts are Canadian dollar denominated.


Q3 2016 Financial Highlights

  • Revenues for the three months ended September 30, 2016 were up 91% year-over-year to $0.944 million as compared to $0.493 million in the comparable year ago period.
  • Year-to-date revenue of $2.121 million is up 33% from $1.596 million from the year ago nine-month period.
  • Year-to-date revenues consist of three main product areas: MINSAS sensors, CVL sensors, and KATFISH underwater vehicles.
    • MINSAS sensors have been shipped to both military and commercial customers in 10 countries since Kraken first commercialized the product in 2013.
    • CVL sensors, a speed sensor derivative of Kraken’s SAS technology, are just starting the commercialization phase. The largest market opportunity for CVL is on ROV’s for the oil and gas sector. Kraken has shipped initial units to its distribution partner and expects to ship additional units in Q1/2017.
    • KATFISH is Kraken’s largest revenue opportunity. KATFISH is the world’s most advanced actively controlled towfish, providing customers with a significant improvement in area coverage rate versus conventional sonar and is priced at a significant discount to high-end competitor products. The first commercial unit is expected to be delivered in Q1/2017. This first sale was based on a series of milestones and Kraken expects to collect approximately $0.8 million of remaining milestone payments in the first half of 2017.
  • Gross margins for the quarter were 74% as compared to 62% in the year-ago quarter. For the nine months to date, gross margins were 66% as compared to 49% in the year ago quarter. Gross margins will vary depending on product mix and the level of development spending in the quarter. Kraken’s product gross margins are generally in the 55% to 75% range.
  • Kraken reported a profit of $0.019 million for the quarter versus a net loss of $0.393 million in the year ago quarter. Year-to-date, Kraken reported a net loss of $0.573 million versus a net loss of $1.565 million in the year ago comparable period.
  • Kraken ended Q3 2016 with $1.2 million in working capital, up from $0.2 million in the June quarter. Kraken is debt free and has an unused credit line with RBC for $250,000.
  • At the end of Q3, Kraken had over $1.1 million in customer contract milestone payments and awarded financial contributions payments, not yet received.
  • Basic and diluted weighted average shares outstanding were 75.0 million, up from 71.1 million in the year ago quarter. During the quarter, Kraken completed a private placement unit financing consisting of one common share at $0.15 per share and a half warrant at $0.30 raising gross proceeds of approximately $1.1 million.


Q3 2016 Strategic Investment

  • During the quarter, as part of a strategic partnership agreement with Square Robot Inc., Kraken made final seed funding investments in SRI. Kraken currently owns 16% (basic, 24% fully diluted) of SRI. SRI expects to close a financing round with at least one large industrial company in the near term at a significant increase in valuation as compared to the seed round funding. Kraken is working with SRI to design, manufacture, and support advanced robotic systems for confined area inspection applications used by the oil and gas industry and expects this will generate significant revenues in the coming years.


Subsequent to Quarter End

  • Kraken received approximately $0.7 million from collection of customer receivables.
  • Kraken announced it will receive a non-repayable financial contribution of $0.5 million from the NRC IRAP program to cover costs associated with its Autonomous Launch and Recovery System (LARS) program. This is a new product area for Kraken and ancillary to its current products. Customers using underwater vehicles require launch and recovery equipment to handle the dangerous and challenging job of launching and recovering expensive underwater equipment.
  • Kraken announced two new additions to its Board of Directors: Mr. Larry Puddister, P.Eng (Co-Chairman of Pennecon Ltd.) and Mr. Shaun McEwan, CPA, CA (CFO of WiLAN Inc.) bring significant experience in managing growth, accessing capital and developing strategic partnerships and M&A.


CEO Comments

“I’m pleased with our financial performance. We continue to focus on executing against our long-term Sensors-to-Systems strategic plan and are very optimistic given the opportunities that we see emerging in the underwater robotics industry. We have a great team, our technology portfolio is growing and we have proven and robust products,” said Karl Kenny, President and CEO of Kraken.

“We’re excited about the many requests for proposals we have received regarding KATFISH from international military and commercial customers. We are now in the final stages of production, and we expect KATFISH sea trials to start in mid-December. We plan delivery of our first KATFISH product to Elbit Systems Ltd. in early 2017. We are continuing discussions with several strategic partners for the development of an underwater drone that will incorporate Kraken’s AquaPix® Synthetic Aperture Sonar technology for advanced seabed survey applications.”



Kraken Sonar Inc. (TSX VENTURE: PNG) is a marine technology company, founded in 2012, that is dedicated to the production and sale of software-centric sensors and underwater robotic systems. For more information, please visit

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