Vancouver, B.C., Canada – March 1, 2021 – Legend Power® Systems Inc. (TSX.V: LPS) (OTCQB: LPSIF) (“Legend Power®” or the “Company”), a global leader in commercial electrical system solutions, today reported its Q1 2021 financial results for the three months ended December 31, 2020. The Company has also scheduled a conference call to provide a business update and discuss its Q1 2021 financial results for Tuesday, March 2, 2021, at 11:00 AM ET (8:00 AM PT). The call will be hosted by Randy Buchamer, President & Chief Executive Officer, and Steve Vanry, Chief Financial Officer (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 quarter ending December 31, 2020 (Q1 2021)
- Revenue of $766k versus $1.00 million reported in Q1 2020;
- Gross profit of $202k compared to $137k in Q1 2020;
- Adjusted EBITDA loss of $678k versus a $1.33 million loss in Q1 2020;
- Net loss of $874k versus the $1.48 million loss in Q1 2020; and
- Cash of $2.04 million, no debt, and $2.99 million in working capital at December 31, 2020.
Legend’s pipeline of opportunities – both with prospective and existing clients – continued to grow through the first quarter of fiscal 2021 ending December 31, 2020. The Company gained more access to senior decision-makers, especially those concerned with tenant safety and reducing costs by optimizing incoming grid power. The increase in commitments from building owners continues to scale. Some of these commitments include multi-building assessments with our SmartGATE Insights™ service and others for full SmartGATE™ Platforms. This resurgence in activity has been broad-based and includes engagements in the multi-family, schools, commercial office, and ESCO verticals. During the first quarter of fiscal 2021, these resulted in:
- Verbal commitments for over 50 new SmartGATE Insights™ engagements for the first three months of calendar 2021;
- The first phase of SmartGATE Insights™ Service engagements resulted in customer commitments for SmartGATE™ platform purchases and follow-on requests to analyze more buildings;
- The Region of Peel in Ontario, Canada invested in SmartGATE™ platforms for four of its low-income multi-residential buildings;
- A joint project with the ESCO of a Fortune 100 Global Corporation entered the optimization and testing stage;
- Channel sales partner Haven Consultants International purchased an additional 3 SmartGATE™ platforms, and;
- An Ontario-based College purchased 2 SmartGATE™ platforms, becoming the 10th leading college or university to deploy SmartGATE™.
Financial summary for the three months ended December 31, 2020, and 2019
|Three months ended December 31,|
|(Cdn$, unless noted otherwise)||2020||2019||Change|
|Cost of sales||564,180||866,237||(35)%|
|Gross margin %1||26%||14%||12%|
1 Gross margin is based on a blend of both equipment and installation revenue.
2 Adjusted EBITDA is a non-IFRS financial measure.
Revenue for the first quarter of 2021 was $766,226 compared with $1,003,329 in the same quarter of fiscal 2020. During Q1 of fiscal 2021, an abundance of sales activity late in the quarter and specific customizations for an order from a repeat customer caused delivery and related recognition of revenue to fall outside of the quarter, which is now expected to be booked in Q2 of fiscal 2021. In the absence of this timing constraint, Q1 fiscal 2021 revenue would have likely been materially higher than that of the comparative period of fiscal 2020.
Gross margin in the first quarter of fiscal 2021 was 26%, compared with 14% in the same quarter of fiscal 2020. The comparative increase in gross margin experienced during Q1 of fiscal 2021 was due primarily to low gross margin in Q1 of fiscal 2020 which was the result of i) a reclassification of inventory impairment to cost of goods sold of $77,000 and ii) a significant project completed for a marquee customer in a new region with unusually high install costs. The Company’s goal is to achieve a 50% gross blended margin and it anticipates improvement on recent results as the business continues to scale.
The Company’s operating expenses for the first quarter of fiscal 2021 were $1,077,392, down significantly from $1,620,431 in the same quarter of fiscal 2020. The primary cause for the decrease in the comparative fiscal quarters is cost-cutting measures implemented and still in place, in response to the economic slowdown caused by COVID-19.
Adjusted EBITDA for the first quarter of fiscal 2021 was negative $677,607, compared with negative $1,325,161 in the same quarter of fiscal 2020.
Net loss for the first quarter of fiscal 2021 was $873,792, compared with a net loss of $1,482,198 in the same quarter of fiscal 2020. Higher gross margins and significantly reduced operating costs in Q1 of fiscal 2021 compared with the same quarter of fiscal 2020 resulted in a significantly lower net loss.
CONFERENCE CALL DETAILS:
DATE: Tuesday, March 2, 2021
TIME: 11:00AM ET (8:00AM PT)
DIAL-IN NUMBER: North America Toll-Free Dial-in Number (877) 201-0168
International Dial-in Number – (647) 788-4901
ONLINE LISTENING: Legend Power Q1 2021 Audience Webcast
CONFERENCE ID: 3871453
REPLAY: Available at www.legendpower.com
About Legend Power® Systems Inc.
Legend Power® Systems Inc. (www.legendpower.com) provides an intelligent energy management platform that analyzes and improves building energy challenges, significantly impacting asset management and corporate performance. Legend Power’s proven solutions support proactive executive decision-making in a complex and volatile business and energy environment.
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
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.
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 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.