Kontrol Energy Announces Fiscal Year 2019 Financial Results

-Revenue Grows 35% Year on Year-

TORONTO, ON / ACCESSWIRE / April 29, 2020 / Kontrol Energy Corp. (CSE:KNR)(OTCQB:KNRLF)(FSE:1K8) ("Kontrol" or "Company") a leader in the energy efficiency sector through IoT, Cloud and SaaS technology announces its financial results for the fiscal year ended December 31, 2019.

A complete set of Financial Statements and Management's Discussion & Analysis will be filed on SEDAR (www.sedar.com) on April 29^th, 2020. A call to discuss the financial results has been scheduled for Wednesday, April 29^th, 2020 at 4:40 PM (EST). See details below.

Highlights

• Revenue for the year ended December 31, 2019 was $14.6 million, up 35% over the prior year
• Strong organic growth
• Adjusted EBITDA for the for year ended December 31, 2019 was $525,121 an improvement of $692,693 over the 2018 negative Adjusted EBITDA of ($167,572)
• Kontrol Energy was selected to the Startup 50 ranking for the second year in a row
• Kontrol Energy received certification of its new SmartSuite® energy technology for the commercial, multi-residential, hospitality and industrial building market
• Kontrol Energy completed pilot of its process analyzer equipment and secured an initial order with global leading plant-based meat substitute company
• Kontrol Energy received its first Smart Factory order from Toyota Tsusho Canada for deployment of IoT enabled energy monitoring and plant upgrade program
• Convertible debenture offering raised gross proceeds in excess of $1 million
• The Company refinanced a secured debt facility which resulted in additional Company funding

"Fiscal year 2019 was another strong year of sales growth as we continue to deliver solutions to an impressive customer base including large established industrials to leading property managers and building owners," said Paul Ghezzi CEO of Kontrol Energy. "Kontrol's focus for 2020 is to continue its strategic growth and expand its portfolio of connected buildings and to accelerate revenues through software as a service (SaaS), Internet of Things (IoT) devices and smart building automation."

2019 Financial Highlights

For the year ended December 31, 2019, revenue increased by 35% to $14,558,567 compared to $10,727,301 in 2018. Revenue for the three months ended December 31, 2019 was $3,701,750 a decrease of $393,320 over the comparative quarter in the prior year due to timing of projects delivered.

For the year ended December 31, 2019 a full year of activity was recognized in connection with the two acquisitions made in the 2018 fiscal year. These accretive acquisitions, plus strong organic growth, have contributed to the overall increase in revenue year-over-year.

Gross margin for the year ended December 31, 2019 was 48.5% compared to 60% for the prior year. The gross margin is in line with management's expectations and reflects the adjusted mix of revenue and cost of sales under a growing organization with changing product and service offerings. Management is pleased with gross profit levels; contributions have come from all business activities.

For the year ended December 31, 2019, Adjusted EBITDA improved significantly to $525,121 compared to negative $(167,572) in the prior year.

Fiscal year 2019 Adjusted EBITDA improvement in part is attributable to organic growth in our energy retrofit and SaaS activities, and contribution coming from accretive acquisitions. Total operating expenses (excluding share-based compensation) for the year ended December 31, 2019 was $7,624,435 or 52% of revenue and that compares to a ratio of 67% in 2018.

Cash flows used in operating activities was $214,003 for the year ended December 31, 2019. For the year ended December 31, 2018, cash flows used in operating activities was $1,012,510. This is a positive change of $798,507 and reflects strong working capital management and improved operational performance. This positive change is also due to the application of IFRS 16, which requires the recognition of lease contracts on a lessee's statement of financial position as a lease liability and a right-of-use asset.

Current liabilities as at December 31, 2019 include debentures of $5,491,000. Management's intention is to re-finance the current obligations at the appropriate time and subject to market conditions which may be impacted by the COVID 19 crisis. Management has a track record of successfully re-financing obligations as they come due and in 2019 management did extend the current debenture obligations for one year.

* Adjusted EBITDA is a non-IRFS financial measure. The Company defines Adjusted EBITDA as net income or loss before interest, income taxes, amortization and depreciation, share based compensation, and acquisition related expenses.

Zoom Call Details

Wednesday, April 29, 2020 at 4:40 PM (EST)

Telephone Number: +1 (438) 809-7799

Meeting ID: 973 8260 9815

Find your local number (if needed): https://zoom.us/u/aSe6zvm7h

About Kontrol Energy

Kontrol Energy Corp. (CSE: KNR) (OTCQB: KNRLF) (FSE: 1K8) is a leader in the energy efficiency sector through IoT, Cloud and SaaS technology. With a disciplined mergers and acquisition strategy, combined with organic growth, Kontrol Energy Corp. provides market-based energy solutions to our customers designed to reduce their overall cost of energy while providing a corresponding reduction in greenhouse gas (GHG) emissions.

Kontrol Energy is one of Canada's fastest growing companies in 2018 and 2019 as ranked by Canadian Business and Maclean's.

Additional information about Kontrol Energy Corp. can be found on its website at www.kontrolenergy.com and by reviewing its profile on SEDAR at www.sedar.com

For further information, contact:

Paul Ghezzi, Chief Executive Officer
[email protected] or [email protected]
Kontrol Energy Corp.
180 Jardin Drive, Unit 9, Vaughan, ON L4K 1X8
Tel: 905.766.0400, Toll free: 1.844.566.8123

Neither IIROC nor any stock exchange or other securities regulatory authority accepts responsibility for the adequacy or accuracy of this release.

Forward-Looking Information

Certain information included in this press release, including information relating to future financial or operating performance and other statements that express the expectations of management or estimates of future performance constitute "forward-looking statements". Such forward-looking statements include, without limitation, statements regarding possible future acquisitions and/or investments in operating businesses and/or technologies, accelerated organic growth, Adjusted EBITDA, expansion of smart energy technologies into US markets, strategic partnerships to expand into North American Markets, acceleration of recurring SaaS revenues, the provision of solutions to customers and Greenhouse Gas emissions reductions, proposed financial savings and sustainable energy benefits and energy monitoring. Subsequent to year-end, there was a global outbreak of COVID-19 (coronavirus), which has had a significant impact on businesses through the restrictions put in place by the Canadian, provincial and municipal governments regarding travel, business operations and isolation/quarantine orders. At this time, it is unknown the extent of the impact the COVID-19 outbreak may have on the Company as this will depend on future developments that are highly uncertain and that cannot be predicted with confidence. These uncertainties arise from the inability to predict the ultimate geographic spread of the disease, and the duration of the outbreak, including the duration of travel restrictions, business closures or disruptions, and quarantine/isolation measures that are currently, or may be put, in place by Canada and other countries to fight the virus. Where the Company expresses or implies an expectation or belief as to future events or results, such expectation or belief are based on assumptions made in good faith and believed to have a reasonable basis. Such assumptions include, without limitation, that suitable businesses and technologies for acquisition and/or investment will be available, that such acquisitions and or investment transactions will be concluded, that sufficient capital will be available to the Company, that technology will be as effective as anticipated, that organic growth will occur, and others. However, forward-looking statements are subject to risks, uncertainties and other factors, which could cause actual results to differ materially from future results expressed, projected or implied by such forward-looking statements. Such risks include, but are not limited to, lack of acquisition and investment opportunities or that such opportunities may not be concluded on reasonable terms, or at all, that sufficient capital and financing cannot be obtained on reasonable terms, or at all, that technologies will not prove as effective as expected that customers and potential customers will not be as accepting of the Company's product and service offering as expected, and government and regulatory factors impacting the energy conservation industry. Accordingly, undue reliance should not be placed on forward-looking statements and the forward-looking statements contained in this press release are expressly qualified in their entirety by this cautionary statement. The forward-looking statements contained herein are made as at the date hereof and the Company does not undertake any obligation to update publicly or revise any such forward-looking statements or any forward-looking statements contained in any other documents whether as a result of new information, future events or otherwise, except as required under applicable securities law.

SOURCE: Kontrol Energy Corp.