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.
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® 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® batteries. This is the customer’s third order of Kraken batteries.An existing customer, a large defense contractor, is acquiring another AquaPix® MINSAS sensor.An existing Canadian commercial customer contracted Kraken for further offshore asset inspection using Kraken’s SeaVision® 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 PlatformsKATFISH™ towed underwater vehicleIn 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™ 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™ 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® Autonomous Underwater Vehicle (AUV)Delivered ThunderFish® 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® XL, a subsea resident, large payload AUV as part of the OceanVision™ project.SensorsSynthetic Aperture Sonar – AquaPix® MINSAS sensorsKraken continues to see growing interest in our AquaPix® 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® 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® Laser ScannerIn 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® 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.PowerSubsea Pressure Tolerant Batteries – SeaPower®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®Signed supply agreement with the world’s leading supplier of robot cleaners to the aquaculture industry, MPI of Norway.ServicesOceanVisionOcean Supercluster contract for the OceanVision™ 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.
SeaVisionKraken 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.ABOUT KRAKEN ROBOTICS INC.Kraken Robotics Inc. (TSX.V:PNG) (OTCQB: KRKNF) is a marine technology company dedicated to the production and sale of software-centric sensors, subsea batteries and thrusters, and underwater robotic systems. The company is headquartered in St. John’s, Newfoundland with offices in Dartmouth, Nova Scotia; Toronto, Ontario; Bremen & Rostock, Germany; and Boston, Massachusetts. Kraken is ranked as a Top 100 marine technology company by Marine Technology Reporter. For more information, please visit www.krakenrobotics.com, www.krakenrobotik.de, www.krakenpower.de. Find us on social media on Twitter (@krakenrobotics), Facebook (@krakenroboticsinc) and LinkedIn.This news release contains forward-looking information. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or state that certain actions, events or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Kraken or its subsidiaries and customers to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained in this news release. Examples of such statements include statements with respect to the Company’s anticipated revenue growth; completion of industry contracts between the Company and its clients, and between its clients and other industry partners; anticipated impact of industry upgrade cycles in naval mine warfare and the anticipated and timely adoption of underwater robotics; the Company’s ability to capitalize on existing and future bids for services, including the Ocean Supercluster; among others. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information including such risks contained in the Company’s management’s discussion and analysis for the fiscal year ended December 31, 2018 and filed with Canadian securities regulators available on the Company’s issuer profile on SEDAR at www.sedar.com. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all.Certain forward-looking information in this press release constitutes future-oriented financial information or financial outlooks, within the meaning of securities laws. Such information is being provided to demonstrate the potential of the Company and readers are cautioned that this information may not be appropriate for any other purpose. Future-oriented financial information and financial outlooks, as with forward-looking information generally, are based on assumptions and subject to risks, uncertainties and other factors. Actual results may differ materially from what the Company currently expects. Readers are cautioned that any such future oriented financial information contained herein should not be used for purposes other than those for which it is disclosed herein. The Company and its management believe that that the prospective financial information as to the Company’s anticipated 2019 financial results has been prepared on a reasonable basis, reflecting management’s best estimates and judgments. However, because this information is highly subjective, it should not be relied on as necessarily indicative of future results.The forward-looking information included in this news release are made as of the date of this news release and the Company does not undertake an obligation to publicly update such forward-looking information to reflect new information, subsequent events or otherwise unless required by applicable securities legislation. The reader should not place undue importance on forward-looking information and should not rely upon this information as of any other date. All forward-looking information contained in this press release is expressly qualified in its entirety by this cautionary statement.Neither the TSX Venture Exchange Inc. nor its Regulation Services Provide (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release, and the TSX Venture Exchange has neither approved nor disapproved the contents of this press release.For further information, please contact:Greg Reid, Chief Operating Officer
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