ST. JOHN’S, NEWFOUNDLAND, August 30, 2018/GLOBE NEWSWIRE/ — Kraken Robotics Inc. (TSX-V: PNG, OTCQB: KRKNF) announced it has filed its financial results for the second quarter ended June 30, 2018. Additional information concerning the Company, including its unaudited condensed consolidated interim financial statements and related management’s discussion and analysis (“MD&A”) for the quarter ended June 30, 2018, can be found at www.sedar.com. Unless otherwise stated, all dollar amounts are Canadian dollar denominated.
Q2 2018 Financial Highlights
- Revenue was $3.7 million for the quarter as compared to $0.2 million in the year ago quarter, driven by delivery of a KATFISH™and several AquaPix®sensors to military and commercial customers.
- Operating income was $0.7 million as compared to an operating loss of $1.1 million in the year ago quarter. The improvement was due to higher revenues, year-over-year.
- Kraken exited the quarter with a cash balance of $2.3 million, as compared to cash indebtedness of $0.3 million at December 31, 2017. The Company’s $0.3 million line of credit is unused.
- At quarter-end, Kraken had $1.1 million of funding awards (i.e. grants) to draw upon from the National Research Council of Canada Industrial Research Assistance Program and Innovate Newfoundland. These grants will be drawn down over the next four quarters.
Q2 2018 Notable Operational Highlights
- Completed a strategic financing with Ocean Infinity for gross proceeds of $2.3 million.
- Sonar sensors – Completed first two units of a multi-unit AquaPix® contract announced in Q3 2017.
- Sonar sensors – Announced development of next generation of sonar sensor. The AquaPix® Multispectral Synthetic Aperture Sonar (SAS) will be the world’s first commercial SAS to operate over such a wide spectrum, ranging from low audible frequencies to high ultrasonic frequencies. This new technology will significantly extend search range at constant high-resolution seabed pixels; will allow for sub-bottom 3D volumetric imaging (i.e. finding objects buried beneath the seafloor); and will increase the speed and accuracy for seabed classification and characterization.
- Laser sensors – Received first commercial order of SeaVision®laser imaging system.
- Laser sensors – Pre-qualified for a Build in Canada Innovation Program(BCIP) contract for our SeaVision®laser scanner product.
- Sensors and software – Continued work on a contract for sensors and robotics for ship hull inspections that was announced in Q4 2017.
- ThunderFish® – Pre-qualified for a BCIP contractfor our ThunderFish®AUV platform.
- KATFISH™ – Successfully completed military standard certification testing of the KATFISH-M, a ruggedized version of Kraken’s KATFISH™Towed Synthetic Aperture Sonar Platform. While the commercial version of KATFISH™ is priced at US$1.5 million, the military certified version, KATFISH-M, is priced at US$2.5 million.
- KATFISH™– Completed military version of KATFISH™towed underwater vehicle for European customer.
“Our second quarter revenues were a record for Kraken,” said Karl Kenny, Kraken’s President and CEO. “Given our recent strategic partnership with Ocean Infinity and a $9 million contract for deep sea pressure tolerant batteries, we are starting to reap benefits from strategic decisions on product development, acquisitions, and partnerships made over the last three years. Our new KATFISH™and SeaVision®products are seeing strong interest in both the military and commercial markets while adoption of our traditional AquaPix®sensor products are now growing beyond the military market and into the commercial market. We continue to round out our sensor and robotics technology portfolio with ongoing development of products such as the ThunderFish® Autonomous Underwater Vehicleandour next generation Multispectral SAS sensor. Our new Tentacle™ Intelligent Winch product development is being trialed with our MIL-STD KATFISH™at the U.S. Advanced Navy Technology Expo trials in Rhode Island this week after the last two weeks of successful surveys with NUWC and NOAA. We continue to believe we are nicely positioned as the defense market undergoes an upgrade cycle and commercial markets increasingly adopt underwater robotic technology.”
Subsequent Highlights since June 30 Quarter End
- Formed a strategic partnership with US-based Ocean Infinityand subsequently received the first purchase order of $2.5 million with an expected follow on purchase order in January 2019 of $6.5 million. This order is for deep sea pressure tolerant batteries that will be supplied using Kraken Power’s pressure tolerant gel encapsulation technology.
- Announced formation of Kraken’s Acoustic Signal Processing Groupwith a Toronto-based team with 80+ years of combined experience that will focus on anti-submarine warfare applications.
- Announced Cooperative Research and Development Agreements with both the Naval Underwater Warfare Center(NUWC) – Division Newport and the National Oceanic and Atmospheric Administration(NOAA).
- Announced$0.5 million contractfrom a leading military customer for AquaPix® sonar sensor.
- Received $1 millionfrom exercise of previously issued common share purchase warrants.
With order activity to date including the recent battery contract, we expect strong momentum in the second half of 2018 and 2019. The strategic financing and recent warrant exercises have strengthened our balance sheet. With a pipeline of more than $200 million of opportunities, we are excited to have the right technology at the right price as the military goes through a long-awaited upgrade cycle and the commercial markets accelerate the adoption of underwater robotics.
ABOUT KRAKEN ROBOTICS INC.
Kraken Robotics Inc. (TSX.V:PNG) (OTCQB: KRKNF) is a marine technology company that is dedicated to the production and sale of software-centric sensors and underwater robotic systems. The company is headquartered in St. John’s, Newfoundland with offices in Dartmouth, Nova Scotia; Toronto, Ontario; Bremen, Germany; and Fairfax, Virginia. Kraken is ranked as a Top 100 marine technology company by Marine Technology Reporter. For more information, please visit www.krakenrobotics.com, www.krakenrobotik.de, www.krakenpower.de. Find us on social media on Twitter (@krakenrobotics), Facebook (@krakenroboticsinc) and LinkedIn.
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.
For further information, please contact:
Greg Reid, Chief Financial Officer
Sean Peasgood, Investor Relations
Glenda Leyte, Marketing Manager
(709) 757-5757 extension 288