Kraken Announces $2.8 Million of Contracts and Provides Corporate Update
6:00 AM ET 3/16/20 | GlobeNewswire
Kraken Announces $2.8 Million of Contracts and Provides Corporate Update
ST. JOHN'S, Newfoundland, March 16, 2020 (GLOBE NEWSWIRE) -- Kraken Robotics Inc. (TSX-V: PNG) (OTCQB: KRKNF) ("Kraken" or the "Company"), is pleased to announce new contracts for batteries, sonar sensors, and support totalling $2.8 million. We are also pleased to provide a corporate update on business activity.
New Contracts
Kraken has recently received orders from four US companies and one Canadian company totalling $2.8 million. The Company expects to fulfill these contracts in the first half of 2020. Due to confidentiality reasons, our customers cannot be named but are characterized below:
-- A new customer primarily targeting the defense industry will be using
Kraken SeaPower(R) batteries in its autonomous underwater vehicles
("AUVs"). Kraken currently expects another battery order from this
customer in Q3 of this year.
-- An existing defense industry customer is acquiring additional SeaPower(R)
batteries. This is the customer's third order of Kraken batteries.
-- An existing customer, a large defense contractor, is acquiring another
AquaPix(R) MINSAS sensor.
-- An existing Canadian commercial customer contracted Kraken for further
offshore asset inspection using Kraken's SeaVision(R) laser scanning
services.
-- An existing commercial customer contracted Kraken for offshore support.
Corporate Update
2019 was a very strong year of growth for Kraken, and we expect to report Q4 and full year financial results for the period ended December 31, 2019 in the second half of April 2020. While the auditors have recently started their field work and final results are subject to change, we expect 2019 revenue to be between $14.5 million and $15.5 million. This is more than double the $6.7 million we achieved in 2018. We expect strong growth to continue in 2020 and 2021 based on existing orders, orders we expect to close in the near term, and strategic wins with defense and commercial customers.
While we experienced delays in getting certain contracts signed (delays not related to Kraken or our products), we are excited about the opportunities ahead as military and commercial adoption of our products continues to increase. We have invested significantly in R&D as well as sales and marketing. We expect relationships with strategic partners such as ThayerMahan and Ocean Infinity and numerous customer sea trials to continue to generate revenue growth.
While we are not currently experiencing major impacts from the recent oil price collapse and Coronavirus pandemic, we are aware that this could affect our supply chain, customers, employees, and operations. That could impact the number of contracts we close, sales cycle lengths, and our ability to deliver product and services in a timely manner. However, we will continue to prudently monitor the situation and manage our business accordingly.
Notable Updates by Products and Service:
Underwater Vehicle Platforms
-- KATFISH(TM) towed underwater vehicle
-- In 2019, we completed several customer demonstrations at sea in
both the U.S. and Canada. Several military and commercial
companies are in various stages of evaluating KATFISH(TM) along
with our Autonomous Launch and Recovery Systems (ALARS). Given
where we are in the sales cycle with several of these customers,
we feel confident in our ability to deliver significant growth
from this platform in 2020 and 2021.
-- In October 2019, an unnamed international navy officially notified
Kraken that we were the successful bidder on a program for the
acquisition of new minehunting sonar systems utilizing several
KATFISH(TM) vehicles and Autonomous Launch and Recovery Systems.
The customer notified Kraken that it intended to enter a contract
with the Company after the expiration of a standstill period.
However, in these types of competitive bid processes, any losing
bidder has the right to file a protest of the decision. In this
case, one of the losing bidders filed a protest and the complaint
process is still ongoing. Due to confidentiality, Kraken is not
able to discuss the details of the complaint process. However,
currently we are hopeful that a contract will be executed with
this customer during Q2, 2020.
-- ThunderFish(R) Autonomous Underwater Vehicle (AUV)
-- Delivered ThunderFish(R) AUV prototype to the Canadian Navy in
2019, and in 2020 are providing additional SAS sensor integration
support to the customer.
-- Continuing development of ThunderFish(R) XL, a subsea resident,
large payload AUV as part of the OceanVision(TM) project.
Sensors
-- Synthetic Aperture Sonar - AquaPix(R) MINSAS sensors
-- Kraken continues to see growing interest in our AquaPix(R) MINSAS
sensors, and specifically an interest by numerous AUV
manufacturers to evaluate and integrate Kraken SAS in their AUV
offerings to customers.
-- Development of a new, low-power, man portable AquaPix(R) MINSAS
sensor is ongoing, and Kraken expects to make its first product
delivery to the United States Navy under the Foreign Comparative
Test program in Q2, 2020.
-- Development of next generation Multi-Spectral Synthetic Aperture
Sonar continues, with first sea trials expected later this year.
This product will provide a unique capability, enabling
simultaneous ultra-high-resolution acoustic imagery and buried
object detection from the same sensor.
-- We continue to develop numerous other innovative sensor
technologies, further separating Kraken from traditional sonar
market competitors. Two of these technologies include an
ultra-high-resolution nadir gap filler solution and seamless SAS
capabilities. We expect to provide further details on these new
technologies and related products in the coming months.
-- SeaVision(R) Laser Scanner
-- In collaboration with an international oil and gas company,
Kraken's development of a unique, non-contact mooring chain
inspection tool continues, with commercialization scheduled for
Q4, 2020. This tool can be used to support existing offshore oil
and gas inspection requirements, as well as upcoming offshore wind
inspection requirements. This new platform is anticipated to
significantly reduce the cost of inspecting critical
infrastructure, which must be inspected regularly.
-- Under a recently signed Canadian government contract for our
SeaVision(R) underwater laser imaging platform, we expect to be
working with Parks Canada's Underwater Archaeology Team in the
Arctic this summer, as a continuation of the 2014 Franklin
Expedition.
-- In the last 6 months, Kraken has completed several successful
demonstration trials and commercial contracts with offshore oil
and gas customers in North and South America for laser scanning of
a wide variety of subsea assets.
Power
-- Subsea Pressure Tolerant Batteries - SeaPower(R)
-- Completed delivery of sixteen (16) 6000-meter rated pressure
tolerant battery systems to Ocean Infinity, representing
approximately 1,300 kWh. At a recent industry conference, Ocean
Infinity noted that they are achieving AUV mission lengths of
almost 700-line kilometers with Kraken batteries as compared to
approximately 300-line kilometers with the original AUV batteries.
This has resulted in launch and recovery operations being reduced
by approximately 50%, yielding increased safety and cost
efficiencies.
-- Expecting follow on orders from existing battery customers in 2020
as well as new customer announcements and deliveries.
-- Planning a move into new larger facility in Rostock, Germany in
Q4, 2020 in order to handle additional battery and thruster
production.
-- Pressure Tolerant Thrusters - SeaThrust(R)
-- Signed supply agreement with the world's leading supplier of robot
cleaners to the aquaculture industry, MPI of Norway.
Services
-- OceanVision
-- Ocean Supercluster contract for the OceanVision(TM) project has
been formally signed and includes multiple industry, government
and academic partners.
-- This 3-year, $20 million project will see the development of new
sensor and underwater vehicle technologies as well as services
(including Robotics as a Service and Data as a Service).
-- Kraken is currently planning its Spring 2020 ocean survey campaign,
which will include collection of ocean data offshore Nova Scotia
and Newfoundland and Labrador as we continue to demonstrate our
technologies to our industry partners in the fishing, oil and gas,
and ocean survey industries.
-- SeaVision
-- Kraken has recently been growing its service business, by offering
offshore asset integrity inspection using its SeaVision underwater
laser scanner.
-- Kraken expects significant growth in this service business in
2020, incorporating dedicated personnel and equipment to service a
broad customer base domestically and internationally.
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March 16, 2020 06:00 ET (10:00 GMT)
