Legend Power® Reports Record Revenue in Q3 F2018 with 39% Year-Over-Year Revenue Growth; Achieves Improved Gross Margins and Near Break-Even EBITDA

08-23-18 | Featured News, Press Releases

Vancouver, Canada, August 23, 2018 – Legend Power® Systems Inc. (TSXV: LPS) (“Legend Power” or the “Company”), a global leader in voltage management technology, today reported its fiscal Q3 2018 financial results for the three and nine-month periods ended June 30, 2018. A conference call to discuss the results is set for 5pm 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.

Q3 F2018 Highlights

  • Record quarterly revenue of $2.1 million; up 39% compared with Q3 2017
  • 23 units recognized in revenue
  • Blended gross profit margin was 49%; up 2% compared with Q3 2017
  • Working capital of $14.5 million, including $10.9 million of cash and equivalents (at June 30, 2018)
  • Multi-system sale to Ontario college
  • Re-deployed key personnel to drive U.S. sales growth strategy

“Our record revenue quarter and operating results were predominantly driven by Ontario sales,” said Randy Buchamer, CEO of Legend Power. “We look forward to continued multi-vertical sales activity in Ontario and near-term meaningful impact in the U.S. as we implement our growth strategy south of the border. We are fully funded to execute our current operating plan and expect to deliver exceptional ongoing value for our customers and shareholders.”


Revenue for the third quarter of 2018 was $2,112,341, a 39% increase from $1,516,813 in the same period of fiscal 2017. Revenue for the first nine months of fiscal 2018 was $5,311,630, an increase of 68% from $3,163,042 in the same period in 2017. The revenue increase in 2018 is due primarily to building awareness of, and interest in, the Company’s technology across several market verticals as well as consistently demonstrating reliability and strong energy savings in a growing number of commercial buildings.

Gross Margin

Gross margin in the third quarter of fiscal 2018 was 49%, an increase from 47% in the third quarter of fiscal 2017. The improvement in Q3 2018 margin was due to a relative increase in the average system size recognized in revenue as well as a relatively higher system revenue to install services revenue ratio. In the nine months ended June 30, 2018 the Company recorded gross margin of 43%, a decrease from 48% in the nine months ended June 30, 2017. The decrease in the 2018 year-to-date period was due primarily to the comparatively higher relative amount of lower margin installation revenue realized (38% of total revenue compared to 13% in the same period of 2017) and a comparatively higher relative amount of sales in the Company’s smaller, lower margin units. We expect that as sales and production volumes increase, average size of systems sold moves closer to the middle of our product line and the impact of our installation margin improvement program continues, gross margin will continue to improve.

Operating Costs

Total operating expenses for the quarter ended June 30, 2018 increased to $1,222,809 up from $886,511 in same period of 2017. Total operating expenses for the nine months ended June 30, 2018 increased to $3,643,112 up from $2,395,580 in the nine months ended June 30, 2017. The increase in operating expenses in both comparative periods was primarily due to increased staffing costs associated with the addition of 10 net new staff members since the prior year period. The expansion of our team is the result of the Company’s growth in both existing and new geographical markets. Adding to the increase in overall operating expense in 2018 were general and overhead costs, which were due to higher office-related costs, and growth associated with sales and business development-focused travel costs. The increase in operating expenses experienced in both comparative periods was also impacted by the significant investments the Company is making in support of its U.S. expansion plan.

Financial summary for the three and nine-month periods ended June 30, 2018 and 2017

Three months ended June 30,

Nine months ended June 30,

(Cdn$, unless noted otherwise)



% Change



% Change








Cost of sales







Gross margin1







Gross margin %1







Operating expenses







Adjusted EBITDA2







Net (loss)







1 Gross margin is based on a blend of both equipment and installation revenue.

2 Adjusted EBITDA; for the periods reported, we are disclosing Adjusted EBITDA, which is a non-IFRS financial measure, as a supplementary indicator of operating performance. We define Adjusted EBITDA as net income or loss before; interest, income taxes, amortization, non-cash stock-based compensation and foreign exchange gains and losses, as well as unusual non-operating items such as bad debt. Warranty expense is no longer included in the Adjusted EBITDA calculation, as such historical amounts have been updated.

New York

Existing, experienced members of Legend’s senior sales staff have been relocated to New York to leverage the groundwork established over the last 6-months by the Company’s business development team. Since the beginning of 2018, business development activities in New York, that include education, marketing and advertising, have resulted in relationships with electrical firms, energy consultants, resellers, utility representatives, key influencers and prospective customers. The Company has seen meaningful growth in its New York sales funnel and is actively responding to an increasing number of customer requests for site assessments and project implementation proposals. 

U.S. Expansion

The Company has identified and is targeting expansion to additional regions in the U.S. including: Maryland / DC, New England, southern California, northern California, the mid-west and the pacific northwest. The new regions were identified based on: utility rates, incentive programs, state-wide energy efficiency resource standards, growth forecasts, and energy efficiency programs. The Company has initiated the hiring of business development and sales personnel for each of the new targeted regions. To further support the U.S. expansion, Legend has engaged a corporate growth consultant to design the Company’s channel growth programs with a focus on development of a complete “personalized reseller program” for the Company’s planned U.S. reseller network.

Canada Sales and Operations

The Ontario region continued to exhibit meaningful sales growth and yielded strong activity in the Company’s sales funnel across multiple verticals. During fiscal Q3 the Company received purchase orders for follow-on orders from three existing customers for a total of 12 units. One of the follow-on orders for 10 units, totalled $931,000, bringing the customer’s total purchase of Harmonizers to 19 units. The Company also recorded sales to three first-time customers for a total of 9 units. Two existing customers also placed orders for the Company’s new remote metering / analytics feature.

Sales in fiscal Q3 featured purchases by colleges and universities including five Harmonizer systems by an Ontario-based college, totalling $597,585. This is the Company’s seventh sale in the post secondary subset of its Ontario education market vertical, and its third sale in fiscal 2018. Year-to-date, Legend Power’s three contracts in this vertical have averaged 4.5 systems and $520,000. Compared to contracts typically seen in the first half of fiscal 2018, these three contracts generally reflect a greater number of units sold, as well as higher margins.

Product Development

The Company recently completed the installation of remote metering / analytics capability in 30 Harmonizer installations. The test market installs are providing valued insight to the Company’s ability to provide its customers with enhanced, real-time data on power performance in their commercial properties and do so on any device with a web browser. The already ‘smart’ controller is at the core of the Harmonizer’s™ ability to assess, then manage incoming voltage levels more cost-effectively in real time. It can now send the data captured from it’s power meter, to a central Legend database. The system’s simple, intuitive user interface then displays key customer metrics including consumption, savings, maintenance status, operational and other parameters directly to their web-enabled device via simple log-in. The remote metering / analytics system refreshes the database in real-time and updates the user interface every minute. Once testing and customer feedback gathering from the 30 test locations is completed, Legend plans to commercialize remote monitoring as an optional, high-margin, add-on feature set available with all new product purchases and as a retrofit for any of the Company’s 250+ installations to date.

The Company also recently completed the design of a new 4000 Amp system, which significantly exceeds the capacity of the previously largest system rated at 2500 Amp. The first 4000 Amp system was installed as a specified component in the overall electrical infrastructure per the construction of a major Canadian retailer’s newest location. This represents the first time that one of Legend’s Harmonizers was engineered into the construction of a multi-million-dollar energy unit. The enhanced capacity of the 4000 Amp system provides the Company a strong value proposition for the many prospective customers with buildings exhibiting significantly higher power demand, which Legend was not previously able to offer a solution for.


In May 2018, the Company enhanced its marketing depth with the hire of seasoned marketing professional, Michael Davis. Mr. Davis is leading aspects of various sales-oriented campaigns as well as brand enhancement, and updates for Legend’s website, trademark portfolio and sales collateral library. He has facilitated the Company’s admission to various key trade associations including NESEA and others aligned with target verticals. He is also playing a leading role in the US Expansion initiative with support in the macro strategy, initial reseller program, and overall business support elements.

Working Capital

As at June 30, 2018 the Company had working capital totaling $14.5 million, up from $4.1 million at September 30, 2017. The increase in 2018 was due in large part to the $10.5 million private placement closed in April (see “Private Placement”), exercise of 4,464,382 warrants at a price of $0.40 each for total proceeds of $1.8 million, and exercise of 611,993 options at prices ranging from $0.20 to $0.30 each for total proceeds of $180,332. As of June 30, 2018, the Company had $10.9 million of cash and cash equivalents.

Investor Conference Call

The Company will host a conference call to provide a business update and discuss its fiscal Q3 2018 financial results. The call will be hosted by Randy Buchamer, President & Chief Executive Officer and Steve Vanry, Chief Financial Officer. Investors may access the conference call via the following numbers:


Thursday, August 23, 2018


2:00pm PT (5:00pm ET)


Toronto (647) 788-4901

Toll Free – North America (877) 201-0168




Available at: www.legend20.wpengine.com


About Legend Power® Systems Inc.

Legend Power® Systems Inc. (www.legend20.wpengine.com) is a global leader in voltage management technology. We help buildings use less energy by eliminating ‘overvoltage’; an inherent challenge associated with power grids around the world.  Legend’s industry-proven Harmonizer™ 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’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

Sean Peasgood, Investor Relations
+ 1 647 503 1054

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.