Very promising update by management
"("Kontrol" or "Company") a leader in the energy efficiency sector through IoT, Cloud and SaaS technology is pleased to provide a corporate update relating to progress of operations.
Highlights
Closing of accretive acquisition anticipated in early Q3, 2019
First orders from the Toyota Tsusho Smart Factory partnership anticipated in Q2 2019
Continued organic growth from the Cannabis sector and growing software as a service (SaaS) platform
Revenue Growth
Over the 2-year period from 2016 to 2018, Kontrol has grown its revenue run rate from approximately $1.8 Million to $16 Million. In addition to accretive acquisitions, Kontrol's future organic growth is being driven by its energy software as a service (SaaS) platform, the scaling of its strategic partnership with Toyota Tsusho and its Cannabis industry solutions.
Due to the seasonal nature of stack testing, revenue from this emissions service is typically lower in Q1 and Q2 as compared with the balance of the year. This seasonality will have an impact on overall revenues in Q1 and Q2, consistent with prior years.
Next Acquisition
On March 14th, 2019 Kontrol announced that it had entered into a Letter of Intent (the "LOI") to acquire an established and leading provider of electrical retrofit services (the "Target").
The Target has been providing the Canadian market with high quality, value added electrical efficiency services and retrofit applications for more than 15 years. The Target has averaged revenues (unaudited) of over $6.5 Million and normalized EBITDA of approximately $700,000 over the past 3 years.
The purchase price is CAD $3.0 Million, subject to working capital adjustments with a holdback of $300,000 for 12 months. Additional performance payments may be made based on the Target achieving certain EBITDA performance levels.
The acquisition is anticipated to be completed in Q3, 2019.
Toyota Tsusho Smart Factor Partnership
On March 25th, 2019 Kontrol announced that it had entered into a strategic partnership with Toyota Tsusho. Working together Kontrol and Toyota will assist automotive and automotive parts factories achieve improved efficiencies in the areas of buildings, utilities and process. Kontrol will provide Toyota Tsusho with the software and hardware required to manage these critical areas in real-time. The key benefit to factory customers is the ability to reduce costs and improve operational profitability by being able to analyze, manage and adjust operations in real-time.
Following a series of pilots Kontrol anticipates initial orders from factory customers in Q2, 2019.
Cannabis Market
The Cannabis industry requires large amounts of low-cost energy to be successful, representing a new market for Kontrol. Through distributed generation, real-time energy analytics and emission technologies, Kontrol assists Licensed Producers in reducing their overall cost of energy while supporting mission critical infrastructure. Kontrol also provides solutions and technologies to meet air quality and emission compliance.
The Company is active in the sector and anticipates new customer wins in the coming months.
