OAKVILLE, ONTARIO — August 12, 2020 — Spark Power Group Inc. (TSX: SPG), parent company of Spark Power Corp. (“Spark Power” or the “Company”), today announced its financial results for the three and six month periods ended June 30, 2020. All amounts are in Canadian dollars unless otherwise specified.
“I am very proud of our second quarter results,” said Jason Sparaga, Co-CEO of Spark Power Corp. “The true measure of the quality of a team is performance under adversity – and we have weathered this unprecedented storm extremely well. We look forward to returning to our strategy, balancing organic growth, and pursuing acquisitions in our pipeline.” Sparaga continued.
“We are seeing the early fruits of our efforts in building a fully integrated One Spark culture, leveraging the best of each of the outstanding companies we have acquired,” said Andrew Clark, Co-CEO, Spark Power Corp. “The way our teams have come together over the past quarter gives me great confidence that we are on the right track. This experience has made us that much stronger,” added Clark.
“I am very pleased with our financial performance over the past quarter,” said Dan Ardila, CFO, Spark Power Corp. “While we endured a revenue shortfall, our early and aggressive actions – along with payments from both the CEWS and PPP programs – allowed us to support our employee base through the pandemic and enter the third quarter with the liquidity we now need to support our return to the growth trajectory of the three quarters preceding the pandemic.”
- Good results in Q2, in light of the significant effect of the pandemic on the economy.
- Quarterly revenue of $46.3 million, as compared to $44.3 million from the comparable quarter in 2019 representing an increase of 4.7%.
- On a proforma basis, revenue decreased by $8.9 million or 16.1%. Canadian sales were down $11.9 million or 24.3% in the quarter while U.S. sales increased $3.0 million or 46.4%.
- Quarterly adjusted EBITDA of $9.1 million, as compared to $5.5 million from the comparable quarter in 2019 representing an increase of 66.0%.
- On a proforma basis EBITDA grew $1.1 million or 13.3%
- Recognized $8.0 million in subsidies under the Canada Emergency Wage Subsidy (“CEWS”) program.
- Gross margin, including the impact of the CEWS, increased in the second quarter to 34.5% as compared to 33.0% in the comparable quarter in 2019
- Liquidity improved as draws on the Company’s $30.0 million operating line decreased to $8.7 million, down from $23.3 million at March 31, 2020 and $17.4 million at December 31, 2019.
Business Highlights – Operational
- Continued to prioritize the integration of core systems, sales processes, supply chain, and brand integration in the second quarter.
- Management and operational teams continued to focus on the following three areas: health and safety, liquidity, and maintaining service to customers.
- Focused on developing and implementing stringent health and safety procedures and protocols across the organization – for employees and customers safety – as jurisdictions began reopening at different speeds and with different rules across Canada and the US.
- Held weekly leadership meetings to ensure health and wellness of employees, customers and our business.
- Executed several large customer projects across all markets, despite COVID-19 impact.
Business Highlights – Corporate
- Formally signed a revised financing agreement with our banking partner, The Bank of Montreal (BMO).
- Focused on providing additional liquidity for the Company, including increased borrowing capacity, principal payment deferral, and covenant relief.
- Announced that the Board of Directors is considering a restart of our strategic review process (which has since been confirmed as of August 4, 2020). The strategic review is to be conducted by the Special Committee, who have been authorized to identify, evaluate, and consider a broad range of alternatives available to the Company, focused on providing the necessary capital to execute on the Company’s strategic plan.
- Held Annual General Meeting (AGM) of the shareholders – received shareholder approval for all resolutions.
Quarterly Conference Call
Management is hosting an investor conference call and webcast tomorrow, August 13, 2020, at 8:30 a.m. ET to discuss its financial results in greater detail. To join by telephone dial: +1 (844) 407-9500 (toll-free in North America) or +1 (862) 298-0850 (local and international), with conference ID: 36594. To listen to a live webcast of the call, please visit the investor relations section of Spark Power’s website at https://sparkpowercorp.com/about-us/investor-relations/. An archived replay of the webcast will be available following the conclusion of the call.
Please dial in or log on 10 minutes prior to the start time to provide sufficient time to register for the event.
Spark Power’s Second-Quarter 2020 Interim Unaudited Condensed Consolidated Financial Statements and Notes of its Second-Quarter 2020 Management Discussion and Analysis are available on Spark Power’s website at www.sparkpowercorp.com, and will be filed on SEDAR at www.sedar.com.
About Spark Power
Spark Power is the leading independent provider of end-to-end electrical contracting, operations and maintenance services, and energy sustainability solutions to the industrial, commercial, utility, and renewable asset markets in North America. We work to earn the right to be our customers’ Trusted Partner in Power™. Our highly skilled and dedicated people, located in the communities we serve, combined with our knowledge of the power industry, technology expertise, and commitment to safety, ensures we deliver the right solutions that keep our customers’ operations up and running today and better equipped for tomorrow. Learn more at www.sparkpowercorp.com.
This news release may contain forward-looking statements (within the meaning of applicable securities laws) which reflect Spark Power’s current expectations regarding future events. Forward-looking statements are identified by words such as “believe”, “anticipate”, “project”, “expect”, “intend”, “plan”, “will”, “may”, “estimate” and other similar expressions. The forward-looking statements in this press release include statements regarding the Company’s opportunities for future growth, acquisitions, future liquidity and other statements that are not historical fact, and without limitation, includes statements by Messrs. Sparaga and Clark relating to COVID-19 and the business and team.
The forward-looking statements in this news release are not guarantees of future performance and involve risks and uncertainties that are difficult to control or predict. Several factors could cause actual results to differ materially from the results discussed in the forward-looking statements. Such factors include, among others: the ability of the Company to find a suitable strategic partner, potential buyer or participants for a financing; currency fluctuations; disruptions or changes in the credit or security markets; results of operations; and general developments, market and industry conditions. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, these forward-looking statements are made as of the date of this news release and, except as expressly required by applicable law, Spark Power assumes no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise
Selected Consolidated Financial Information
The following table is a summary of Spark Power’s results for the periods indicated:
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Investor and Regulatory Inquiries:
Dan Ardila, Chief Financial Officer
+1 (905) 829-3336 x127
Kim Samlall, Director, Marketing Communications
+1 (905)-829-3336 x185