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KRAKEN Kraken Reports Q3 2021 Results and Re - Iterates Annual Guidance ST . JOHN'S , Newfoundland , Nov. 29 , 2021 ( GLOBE NEWSWIRE ) -- Kraken Robotics Inc. ( TSX - V : PNG , OTCQB : KRKNF ) , Canada's Ocean Company , announced it has filed its financial results for the quarter ended September 30 , 2021. Additional information concerning the Company , including its consolidated financial statements and related management's discussion and analysis ( " MD & A ” ) for the quarter ended September 30 , 2021 , can be found at www.sedar.com . Unless otherwise stated , all dollar amounts are Canadian dollar denominated . 2021 Financial Guidance Remains Unchanged • We continue to expect revenue for the year ended December 31 , 2021 , to be $ 28 million to $ 30 million , an increase of more than 130 % as compared to $ 12 million in 2020. The forecasted growth is driven by initial deliveries of KATFISH ™ 180 towed sonars and Autonomous Launch and Recovery Systems for the Danish and Polish navies , various orders for AquaPix® MINSAS sensors and SeaPower ™ batteries , and five months of contribution from the acquisition of PanGeo , which closed on July 30 , 2021 . • Gross margins for 2021 are expected to be in the 47 % -50 % range versus 47 % in 2020 . • Adjusted EBITDA * excluding transaction cost related to the acquisition of PanGeo for 2021 is expected to be in the range of $ 3.0 million to $ 4.5 million compared to an Adjusted EBITDA * loss of $ 2.7 million in 2020. The year over year improvement is expected as a result of higher revenue offset by increased expenses on headcount and infrastructure related spending , and overall costs due to the growth of the business . • Over the last 12 months , Kraken has purchased significant inventory to de - risk delivery schedules that could be negatively impacted by the COVID 19 pandemic's impact on supply chains . The Company continues to pre - buy long lead - time inventory for planned 2022 deliveries with a primary focus being on electronic integrated circuits . While part availability has been challenging even as we exit the Covid environment , with the ongoing efforts of our engineering and procurement teams to expedite parts orders , we continue to mitigate inventory supply risks as best we can . * Adjusted EBITDA and Adjusted EBITDA margin do not have standardized meaning under IFRS and may not be comparable to similar measures used by other issuers . We define Adjusted EBITDA as revenue less costs of sales , administrative expenses , research and development costs plus investment tax credits . We define Adjusted EBITDA margin as Adjusted EBITDA divided by revenues . 2022 Outlook for Solid Growth Ⓡ While we are not currently providing guidance for 2022 , we do expect solid growth driven by a number of factors . On the Products side , these include continued shipments of KATFISHTM 180 towed sonars and Autonomous Launch and Recovery Systems for the Danish navy , and current and expected orders for AquaPixⓇ MINSAS sensors and SeaPower ™ batteries . On the Services side , we will have a full year of PanGeo results ( vs just 5 months in 2021 ) and expect to see meaningful growth versus 2022 driven by strong industry trends in the offshore renewable energy space . Combined with expected RaaS revenue from our KATFISHTM towed sonar and SeaVision lasers , we expect overall Services revenue at Kraken to show solid growth in 2022. While continued Covid and global supply chain concerns cannot be ruled out , we are well positioned for program awards that have been delayed in 2020-2021 to be awarded in 2022 , thus forming the basis for continued strong growth for Kraken in 2023 and beyond . These include a variety of multi - year programs ( sensors and systems ) in North America , Europe , and Asia Pacific . In addition , we are bidding as a prime on another major minehunting contract pursuit for a leading NATO navy . Q3 2021 Financial Highlights • Revenue for the quarter was $ 5.1 million compared to $ 1.5 million in the year ago quarter . Growth was driving by progress on the Danish Navy order , as well as shipments of sonar sensors and batteries . • Adjusted EBITDA * in the quarter was negative $ 0.7 million , compared to Adjusted EBITDA * loss of $ 1.7 million in the year ago quarter . The year - over - year improvement was driven by higher revenue . • Net loss in the quarter was $ 2.6 million ( including transaction costs of $ 0.6 million ) compared to a net loss of $ 2.6 million in the year ago quarter . • Net working capital at the end of Q3 , 2021 was $ 8.3 million , up from $ 8.0 million at the end of Q2 , 2021 , and compared to $ 10.5 million at the end of 2020. Kraken exited the quarter with a cash and restricted cash of $ 5.0 million , down slightly from $ 5.4 million at the end of Q2 , 2021. Cash has declined since year end 2020 , mainly driven by a planned increase in inventory builds ( $ 9 million inventory increase since end of 2020 ) to address potential supply chain challenges and prepare for major deliveries starting in Q4 2021 . • Including federal funding we will receive for our Ocean Vision project , at quarter end Kraken had $ 7.8 million in previously awarded funding to draw upon from government agencies and project funding partners . Subsequent to quarter end this amount grew by $ 7.6 million with recent funding awards discussed below . These amounts are not recorded in our financial statements until the cash is received . Q3 2021 Corporate Developments