Legend Power Reports Fiscal 2019 Financial Results Investor Conference Call Scheduled for 10am Eastern on January 29
Vancouver, B.C., Canada – January 29, 2020 ‐ Legend Power® Systems Inc. (TSX.V: LPS) (“Legend Power” or the “Company”), a global leader in onsite energy management technology, today reported its fiscal 2019 financial results for the year ended September 30, 2019. A conference call to discuss the results is set for 10:00am EST today (dial in 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 Fiscal 2019
Financial summary for the three and twelve months ended September 30, 2019 and 2018.
1 Certain components of previous year columns have been reclassified to conform with the presentation of fiscal 2019 periods.
Revenue for the fourth quarter of 2019 was $485,543, a 62% decrease from $1,283,433 in the fourth quarter of fiscal 2018. Revenue for fiscal 2019 was $2,334,525 down 65% from $6,595,063 in 2018.
Gross margin in the fourth quarter of fiscal 2019 was negative 20% down from 16% in the fourth quarter of fiscal 2018. Gross margin for fiscal 2019 and 2018 were similar at 42% and 45% respectively. The significantly lower gross margin experienced in the fourth quarter of 2019 was due primarily to a disproportionate amount of production overhead costs realized in the quarter on lower than forecasted throughput during the year. The lower gross margin realized in the fourth quarter of 2018 was primarily the result of year‐end adjustments to cost of goods sold relating to inventory valuation amounts and a proportionately higher amount of low margin installation revenue recorded during those quarters.
Adjusted EBITDA for the fourth quarter of fiscal 2019 decreased by 71% to negative $1,798,936 from negative $1,050,094 in the fourth quarter of fiscal 2018. For the year ended September 30, 2019 adjusted EBITDA was negative $5,265,924, compared to negative $1,981,639 in the year ended September 30, 2018.
Net loss for the fourth quarter of fiscal 2019 was $2,243,219, an increase of 105% from $1,181,896 in the fourth quarter of 2018. Net loss for the year ended September 30, 2019 was $6,093,156, an increase of 138% from $2,559,385 in the year ended September 30, 2018. The net loss in both Q4 2019 and fiscal 2019 were impacted by an impairment of intangible assets totaling $772,818. During the fourth quarter of fiscal 2019, the Company tested its product development costs for impairment. The tests were performed using pro‐forma cash flow projections and certain other assumptions. Based on this analysis development costs associated with internally generated technologies was impaired.
The Company’s operating expenses for the quarter ended September 30, 2019 were $1,476,683, up from $1,154,348 in the same period of 2018. Fiscal year 2019 operating expenses were $6,351,413 up from $3,758,599 in fiscal 2018. The trend of higher operating expenses is expected to continue during this phase of the Company’s U.S. expansion and then level off when the optimum number of U.S. regions has been established (currently projected at a total of 6 including NY).
CONFERENCE CALL DETAILS:
DATE: Wednesday, January 29, 2020
About Legend Power® Systems Inc.
For further information, please contact:
Steve Vanry, CFO
Sean Peasgood, Investor Relations
Neither the TSX Venture Exchange nor the Investment Industry Regulatory Organization of Canada accepts responsibility for the adequacy or accuracy of this release.
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