Kontrol Energy Reports First Quarter 2020 Results

TORONTO, ON / ACCESSWIRE / June 1, 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 three months ended March 31^st, 2020.

A complete set of Financial Statements and Management's Discussion & Analysis will be filed on SEDAR (www.sedar.com) on June 1^st, 2020. A call to discuss the financial results has been scheduled for Monday, June 1^st, 2020 at 4:30pm (EST). See details below.

"In a challenging business environment, we continue to execute on our vision and strategic plan," says Paul Ghezzi, CEO Kontrol Energy. "We have been operating as an essential service provider, through the COVID-19 crisis, meeting the needs of our existing customers and expanding into new markets. We have been very focused on managing our costs and ensuring fiscal discipline across our operating platform and are pleased that we have been able to deliver positive EBITDA in Q1. The Company does not require to raise capital for daily business operations and following Q1 has entered into a definitive Share Purchase Agreement for an accretive acquisition to continue our growth."

Highlights

• Revenue of $2.8 million
• EBITDA of $241,343
• Significant operating expense reductions of approximately $250K in Q1
• Gross margin increased to 61% up from 51% for the comparative quarter in prior year
• Announced signing of a new acquisition subsequent to Q1 with financial closing anticipated in Q2
• A portion of our Q1 revenues related to industrial customers were delayed and could not be completed in Q1 resulting in lower than anticipated revenues. As industrial facilities in Canada and the USA have commenced their re-opening in May 2020, following a period of shutdown related to COVID-19, these revenues are anticipated to be realized over the balance of 2020 calendar year.

Q1 2020 Financial Highlights

In Q1 the Company took decisive action to reduce all variable and discretionary costs associated with project delivery and on-site customer upgrades. This has allowed the Company to achieve approximately $250K in costs savings in Q1 to offset project revenues that have been impacted by plant shutdowns. A portion of our Q1 revenues related to industrial customers were delayed and could not be completed in Q1 resulting in lower than anticipated revenues. As industrial facilities in Canada and the USA have commenced their re-opening in May 2020, following a period of shutdown related to COVID-19, these revenues are anticipated to be realized over the balance of 2020 calendar year.

FY 2020 Outlook

The table below is prepared on a pro-forma basis to include the target acquisition announced for which a definitive Share Purchase Agreement was signed on May 28^th, 2020. The target acquisition has not yet been completed, and closing is subject to financing and other conditions. See the Company's news release dated May 28^th, 2020 for more information.

Despite the challenges presented by COVID-19 in Q1 the Company anticipates continued growth and assuming we are successful in closing our target acquisition, we anticipate delivering our strongest year of revenue and earnings in fiscal year 2020. The Company is updating its previously 2020 anticipated revenue and earnings target to $18 to $20 Million in revenue and $1.5 Million to $2 million of EBITDA.

In Q2 of 2020 the Company entered into a Memorandum of Understanding ("MOU") and 2 pilots with a European Original Equipment Manufacturer ("OEM") in the HVAC sector. The goal of the pilots is to establish Kontrol's enterprise software for energy and facilities management with the OEM and build a white label solution. The OEM has its HVAC technology deployed across 20,000 locations globally.

In Q2 of 2020 the Company also announced that it will be working with its building owner clients to use its energy software to better manage heating, cooling and ventilation systems in real-time in relation to COVID-19. There is growing concern in the broader economy that poorly managed buildings could be spreading COVID-19 inadvertently through poor air quality, poor air circulation and dense population. Kontrol will be deploying software and hardware solutions which include ultra-violet light solutions and building automation managed in real-time.

* 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.

Conference Call

The Company is hosting a conference call to discuss the financial results for the first quarter. The conference call will include prepared remarks, including a virtual presentation, from Paul Ghezzi, Chief Executive Officer. After the prepared remarks, the Company will accept questions. To access the conference call by telephone, dial toll free 1-877-407-0782, and for International dial 201-689-8569. A live audio webcast of the conference call will be available at https://www.webcaster4.com/Webcast/Page/2402/35105

Please connect at least 5 minutes prior to the conference call to ensure adequate time for any software download that may be required to join the webcast

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, the completion of Kontrol's most recently announced proposed acquisition (the "Target Acquisition") and the impact thereof on Kontrol's financial performance, and other statements that express the expectations of management or estimates of future performance constitute "forward-looking statements". Such forward-looking statements also 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, the closing conditions to the Target Acquisition not being satisfied and the Target Acquisition not being completed, 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.