Consolidated Financial Highlights2:
Revenue3 in the quarter increased by 13% year-over-year to $9.1 million for the quarter.
Despite inflationary pressures, Gross Profit Margin4 remained relatively constant at 46% for the quarter.
Due to investments being made in R&D to bring new products to market, Adjusted EBITDA was ($1.5 million) for the quarter. These near-term investments in R&D are tied to key growth initiatives for the Company.
The Balance Sheet remained strong with total assets amounting to $37.8 million, inclusive of $9.8 million in cash. Adjusted Working Capital5 was $6.6 million.
"As we continue to witness favorable tailwinds across the utility industry, we are investing heavily in the development of our TRUSense IP Gateway, expanding our AI-enabled data analytics capabilities and integrating the software capabilities of Congruitive, our recently announced acquisition. The combination of the TRUSense IP Gateway and Congruitive's software places Tantalus at the forefront of becoming a market leader in assisting utilities with their preparation for the integration of electric vehicle charging infrastructure and the adoption of distributed energy resources, such as solar, storage and microgrids, and the delivery of broadband services. Our near-term R&D investments are buttressed by the largest qualified sales pipeline in our Company's history. While the current business environment remains fluid, we continue to witness strong momentum as utilities seek to digitize distribution grids to improve their resiliency and prepare for the energy transition."
The Company will hold a conference call and webcast to discuss the financial results on Wednesday, August 10, 2022 at 11:00 am Eastern Time.
Conference Call
Participant Dial In (Toll Free) 1-844-854-4410
Participant International Dial In 1-412-317-5791
Please ask to join the Tantalus Systems earnings call.
Webcast
https://event.choruscall.com/mediaframe/webcast.html?webcastid=nEEOr7AX
Replay Information
A conference call replay will be available until August 18, 2022. The webcast will be available until August 17, 2023 at the link set out above. To access the conference call replay, please see details below:
US Toll Free: 1-877-344-7529
International Toll: 1-412-317-0088
Canada Toll Free 1-855-669-9658
Replay Access Code 3817309
Financial Statements and Management Discussion & Analysis
Please see the Company's consolidated financial statements ("Financial Statements") and related Management's Discussion & Analysis ("MD&A") for more details. The consolidated financial statements for the three and six months ended June 30, 2022, and related MD&A have been reviewed and approved by Tantalus' Audit Committee and Board of Directors. For a more detailed explanation and analysis, please refer to the MD&A that has been filed on SEDAR at www.sedar.com and is also available on the Company's website at www.tantalus.com.
Non-IFRS and Other Financial Measures
This press release refers to the following non-IFRS measures:
"EBITDA" is comprised as income (loss) less interest, income tax and depreciation and amortization. Management believes that EBITDA is a useful indicator for investors, and is used by management, in evaluating the operating performance of the Company. See "Reconciliation of Net (Loss) / Income to Adjusted EBITDA" for a quantitative reconciliation of Adjusted EBITDA to the most directly comparable financial measure. "Adjusted EBITDA" is comprised as income (loss) less interest, income tax, depreciation, amortization, stock-based compensation, foreign exchange gain (loss) and other income / expenses not attributable to the operations of the Company. Management believes that EBITDA is a useful indicator for investors, and is used by management, in evaluating the operating performance of the Company. See "Reconciliation of Net (Loss) / Income to Adjusted EBITDA" for a quantitative reconciliation of Adjusted EBITDA to the most directly comparable financial measure.
"Gross Profit" is comprised as the Company's revenues less cost of sales. Management believes that Gross Profit is a useful indicator for investors, and is used by management, in evaluating the operating performance of the Company. See "Gross Profit Reconciliation" for a quantitative reconciliation of Gross Profit to the most directly comparable financial measure. This press release refers to "Gross Profit Margin" which is a non-IFRS ratio. Gross Profit Margin is comprised of Gross Profit expressed as a percentage of the Company's revenues. Management believes that Gross Profit Margin is a useful indicator for investors, and is used by management, in evaluating the operating performance of the Company.
"Adjusted Working Capital" is comprised as current assets less current liabilities exclusive of the Company's bank loan. Management believes Adjusted Working Capital is a useful indicator for investors, and is used by management, for evaluating the operating liquidity to the Company. See "Adjusted Working Capital Reconciliation" for a quantitative reconciliation of Adjusted Working Capital to the most directly comparable financial measure.
"Recurring Revenue" is comprised of the Company's revenues that are recurring in nature and attributable to its analytics software as a service ("SaaS") offering, hosting services and software maintenance and technical support agreement services. "Annual Recurring Revenue" or "ARR" is comprised of the Company's Recurring Revenue as expressed on an annualized revenue basis attributable to its customer agreements at a point in time.
Such non-IFRS measures and non-IFRS ratio do not have a standardized meaning under IFRS and may not be comparable to a similar measure disclosed by other issuers.
Gross Profit Margin Reconciliation
| | | Three months ended June 30, 2022 | | | % | | | Three months ended June 30, 2021 | | | % | | | Six months ended June 30, 2022 | | | % | | | Six months ended June 30, 2021 | | | % | |
| Revenue | $ | 9,075,464 | | | 100% | | $ | 8,013,262 | | | 100% | | $ | 18,366,942 | | | 100% | | $ | 16,024,593 | | | 100% | |
| Cost of sales | | 4,911,669 | | | 54% | | | 4,221,177 | | | 53% | | | 9,782,034 | | | 53% | | | 8,630,496 | | | 54% | |
| Gross Profit | $ | 4,163,795 | | | 46% | | $ | 3,792,085 | | | 47% | | $ | 8,584,908 | | | 47% | | $ | 7,394,097 | | | 46% | |
Reconciliation of Net (Loss) to Adjusted EBITDA
| | | Three months ended June 30, 2022 | | | Three months ended June 30, 2021 | | | Six months ended June 30, 2022 | | | Six months ended June 30, 2021 | |
| Loss for the period | $ | (2,410,646 | ) | $ | (607,226 | ) | $ | (4,200,029 | ) | $ | (3,515,658 | ) |
| Finance expense (a) | | 252,249 | | | 173,489 | | | 489,235 | | | 339,818 | |
| Income taxes | | 30,983 | | | - | | | 30,983 | | | - | |
| Depreciation and amortization | | 551,225 | | | 446,647 | | | 1,044,394 | | | 881,604 | |
| EBITDA | | (1,576,189 | ) | | 12,910 | | | (2,635,417 | ) | | (2,294,236 | ) |
| Stock-based compensation (b) | | 201,940 | | | 62,707 | | | 404,996 | | | 258,476 | |
| Foreign exchange (c) | | (121,575 | ) | | (10,142 | ) | | (506,625 | ) | | 3,926 | |
| Congruitive acquisition related costs (d) | | - | | | - | | | 586,960 | | | - | |
| RiseTech reverse acquisition listing expense (e) | | - | | | - | | | - | | | 1,188,175 | |
| Reverse acquisition legal, professional and related costs (e) | | - | | | - | | | - | | | 964,484 | |
| Adjusted EBITDA | $ | (1,495,824 | ) | $ | 65,475 | | $ | (2,150,086 | ) | $ | 120,825 | |
(a) Finance expense comprised of interest and related finance expense on bank loans and lease liabilities.
(b) Share-based non-cash compensation expense.
(c) Foreign exchange comprised of unrealized (gain) / loss from non-functional currency assets and liabilities.
(d) General and administrative expenses pertaining to the Company's acquisition of Congruitive.
(e) Reverse acquisition listing expense comprised of excess purchase price over RiseTech net assets acquired and costs.
Adjusted Working Capital Reconciliation
| | | June 30, | | | | December 31, | |
| Adjusted Working Capital | | 2022 | | | | 2021 | |
| Total current assets | $ | 23,131,694 | | | $ | 26,427,657 | |
| Less current liabilities | | (25,741,326 | ) | | | (20,953,001 | ) |
| | | (2,609,632 | ) | | | 5,474,656 | |
| Add Bank loans - current portion | | 9,200,000 | | | | 8,100,000 | |
| Adjusted Working Capital | $ | 6,590,368 | | | $ | 13,574,656 | |
About Tantalus Systems Holding Inc. (TSX: GRID)
Tantalus is a smart grid technology company that transforms aging one-way grids into future-proofed multi-directional grids that improve the efficiency, reliability and sustainability of public power and electric cooperative utilities and the communities they serve. Our solutions are purpose-built to allow utilities to restore power quickly after major disruptions, adapt to rapidly shifting consumer expectations and population shifts, innovate new solutions based on the adoption of distributed energy resources and evolve their grid infrastructure at their own pace without needless cost or complexity. All this gives our user community the flexibility they need to get the most value from existing infrastructure investments while planning for future requirements. Learn more at www.tantalus.com.
Forward-Looking Statements:
This news release contains "forward-looking information" within the meaning of applicable securities laws. Forward-looking information is generally identifiable by use of the words "believes", "may", "plans", "will", "anticipates", "intends", "could", "estimates", "expects", "forecasts", "projects" and similar expressions, and the negative of such expressions. Forward-looking information in this news release includes statements such as those relating to: favorable tailwinds for the utility industry, the adoption, performance and development of the TRUSense IP Gateway, AI-enabled analytics and Congruitive software leading to Tantalus becoming a market leader, the Company's qualified sales pipeline (and the Company's ability to close sales in the current sales pipeline) and continuing momentum relating to utilities seeking to digitize distribution grids.
To the extent any forward-looking information in this news release constitutes a "financial outlook" within the meaning of securities laws, such information is being provided because management's estimate of the future financial performance of Tantalus is useful to investors, and readers are cautioned that this information may not be appropriate for any other purpose and that they should not place undue reliance on such information.
In connection with the forward-looking information contained in this news release, Tantalus has made numerous assumptions, regarding, among other things: the expected impact of COVID-19, the expected impact of supply chain constraints, the expected impact of inflationary pressures on costs and the expected timing of new product introductions. While Tantalus considers these assumptions to be reasonable, these assumptions are inherently subject to significant uncertainties and contingencies. Additionally, there are known and unknown risk factors which could cause Tantalus' actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking information contained herein. A complete discussion of the risks and uncertainties facing Tantalus is disclosed under the heading "Risk Factors" in the Tantalus' Annual Information Form dated March 23, 2022, as well as those risk factors included with Tantalus' continuous disclosure filings with Canadian securities regulatory authorities available at www.sedar.com. All forward-looking information herein is qualified in its entirety by this cautionary statement, and Tantalus disclaims any obligation to revise or update any such forward-looking information or to publicly announce the result of any revisions to any of the forward-looking information contained herein to reflect future results, events or developments, except as required by law.
Contact Tantalus:
Deborah Honig
Investor Relations
647-203-8793 | deborah@adcap.ca
Website: www.tantalus.com
LinkedIn: LinkedIn/company/tantalus
Twitter: @TantalusCorp
________________________________
1 See "Non-IFRS and Other Financial Measures."
2 Financial information is reported in United States dollars ("$") unless otherwise stated and in accordance with International Financial Reporting Standards ("IFRS").
3 Unless otherwise stated Q2, 2022 results are compared to the same period in 2021.
4 See "Non-IFRS and Other Financial Measures."
5 See "Non-IFRS and Other Financial Measures."
To view the source version of this press release, please visit https://www.newsfilecorp.com/release/133306
Cash Receipts for Q1 $2.18m an increase of 16% on Q4 2024