ST. JOHN'S, NL--(Marketwired - May 02, 2016) - Kraken Sonar Inc. (TSX VENTURE: PNG) announced it has filed its financial results for the fourth quarter and year ended December 31, 2015. Additional information concerning the Company, including its audited consolidated financial statements and related management's discussion and analysis ("MD&A") for the year ended December 31, 2015, can be found at Unless otherwise stated, all dollar amounts are Canadian dollar denominated.

2015 Financial Highlights

  • Revenues for the 12 months ended December 30, 2015 were $1.9 million as compared to $2.4 million in the comparable year ago period. Excluding a one-time research contract in 2014, revenues declined slightly from $2.1 million to $1.9 million. In addition, a customer product shipment slipped into early 2016 and as a result, Kraken was unable to recognize this $0.2 million of revenue in Q4 2015.
  • Approximately 90% of Kraken's 2015 revenues were generated from Synthetic Aperture Sonar sensor sales, with the balance from the new KATFISH™, AquaTrak® and SoundPix® products. These new products were introduced in the second half of 2015 and their revenues are expected to materially ramp in 2016.
  • Excluding non-cash items including RTO listing expenses, stock compensation and a bad debt expense, the operating loss for 2015 was $0.8 million versus an operating profit of $0.4 million in 2014. The difference reflects our investment in new product development, people, and marketing.
  • Kraken ended Q4 2015 with approximately $0.8 million in cash and was debt free. Cash increased approximately $0.1 million from the September quarter, but was down $0.6 million from the end of 2014. At 2015 year-end, Kraken still had over $1.4 million in awarded but unbilled customer contract milestone payments and financial contribution payments. We expect these revenues will be collected during 2016.
  • In the second half of 2015, Kraken recorded a bad debt expense of approximately $0.3 million on a receivable from a foreign customer in the oil and gas survey sector. Kraken had collected approximately two-thirds of the revenue from this customer, but due to their business challenges the customer had not paid the balance. In Q4 Kraken repossessed the sensor with plans to use this equipment for sea trials with a potential European customer in Q1 2016. Kraken expects to monetize this asset with the European customer in Q2 2016.
  • Basic and diluted weighted average shares outstanding were unchanged at 71 million.

Subsequent to the 2015 year-end, other notable events include:

  • Awarded a $600,000 contract by Woods Hole Oceanographic Institution
  • Received repayment of the shareholder loan receivable of $200,000
  • Awarded a non-dilutive financial contribution of $500,000 from the National Research Council of Canada Industrial Research Assistance Program (NRC-IRAP) for KATFISH™ product development.

CEO Comments

"This has been an exciting year for Kraken, as we continued to invest and evolve our SAS sonar technology into integrated systems. During 2015 we continued implementation of our Sensors to Systems strategy to be positioned to meet the emerging market opportunities in marine robotics", stated Karl Kenny, President and CEO of Kraken. "We believe our investments in 2015 will pave the way for an acceleration of bookings and revenue in 2016 and 2017. As the Company's largest shareholder, I remain very enthusiastic about Unmanned Maritime Systems (UMS) and their multi-billion dollar potential within the ocean technology industry. Both the military and commercial UMS markets are very dynamic with new research, development and procurement programs appearing around the world. "

2015 Business Highlights

  • Going public in February 2015 has opened new doors for access to capital to allow us to invest in growth initiatives.
  • We added new names to our customer roster, including major brands across the military and commercial markets. We have now sold to customers across multiple regions including North America, Europe, the Middle East, Asia and Australia. Our customer base includes many world navies and leading defense contractors.
  • We increased our market access with new distribution partners Tritech (a subsidiary of Moog (NYSE: MOG.A), Elbit Systems (NASDAQ: ESLT), and Caris (recently acquired by Teledyne). While we are a leading sonar technology company, our distribution partnerships are essential to accessing large markets without having to invest significant resources in setting up new channels.
  • We added some of the best minds in the underwater robotics industry to our team in 2015. This expands our knowledge of the sector and enables us to continue with some of the most advanced technical innovation in the industry.
  • We launched several new industry changing products including the KATFISH™ intelligent towfish system, the AquaTrak® Correlation Velocity Log and our SoundPix® real-time 3D seabed mapping solution. New products like KATFISH™ have considerably higher ASPs than our traditional sensor business all the while still maintaining strong gross margins of 50%+.
  • We acquired the underwater robotics technology and related intellectual property rights previously owned by Marine Robotics Inc. This acquisition brings us an extensive underwater technology portfolio and builds upon our Sensors to Systems strategy to be a market leader in the UMS industry.
  • We recently added an additional 5,000 square feet of manufacturing space at a new facility to allow for enhanced manufacturing capacity required as our business ramps.

Outlook for 2016

In 2016, we will continue to invest to meet the expected demand driven by our recent product and partnering announcements and ongoing evolution of our Sensors to Systems strategy:

  • We believe our KATFISH™ product will disrupt current industry solutions based on market feedback to-date. While we will not deliver our first unit until later this year, we are seeing considerable interest from both military and commercial market sectors. At US$1.5 million per unit, KATFISH™ should drive considerable revenues compared to our historical financials.
  • We anticipate concluding additional strategic partnerships in 2016, both for new products and distribution, across military and commercial channels.
  • We expect to add additional world-class underwater robotics talent, technology and products.
  • We expect a material ramp in bookings and revenues versus 2015. While sales cycles are often long and timing of orders can be uncertain, the increased level of activity and discussions with current and potential customers make us confident that we should see strong growth in 2016 and 2017. Our technology and products are often key differentiators in our customer's solutions to their end customers.

"I would like to thank the Kraken team for their hard work in helping us move up the marine robotics value chain," said Mr. Kenny. During 2015, we made significant but prudent investments in growth initiatives including the hiring of new personnel, expanded engineering design and manufacturing operations, acquisition of underwater robotics IP, continued product innovation and development of international distribution channels. I would also like to thank our customers, partners and shareholders for their continued support in the pursuit of our objectives.


Kraken Sonar Inc. (TSX VENTURE: PNG) is an industrial technology company, founded in 2012, that is dedicated to the production and sale of software-centric Synthetic Aperture Sonar technology. The Company's products have been sold to leading defence contractors, commercial survey companies and research institutions for producing real-time, ultra high resolution imagery and bathymetry of the seabed. Marine Technology Reporter has three times named Kraken to their MTR100 -- a list of the 100 most influential companies in the international marine technology marketplace. For more information, please visit

Certain information in this news release constitutes forward-looking statements. When used in this news release, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "seek", "propose", "estimate", "expect", and similar expressions, as they relate to the Company, are intended to identify forward-looking statements. In particular, this news release contains forward-looking statements with respect to, among other things, business objectives, expected growth, results of operations, performance, business projects and opportunities and financial results. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in such forward-looking statements. Such statements reflect the Company's current views with respect to future events based on certain material factors and assumptions and are subject to certain risks and uncertainties, including without limitation, changes in market, competition, governmental or regulatory developments, general economic conditions and other factors set out in the Company's public disclosure documents. Many factors could cause the Company's actual results, performance or achievements to vary from those described in this news release, including without limitation those listed above. These factors should not be construed as exhaustive. Should one or more of these risks or uncertainties materialize, or should assumptions underlying forward-looking statements prove incorrect, actual results may vary materially from those described in this news release and such forward-looking statements included in, or incorporated by reference in this news release, should not be unduly relied upon. Such statements speak only as of the date of this news release. The Company does not intend, and does not assume any obligation, to update these forward-looking statements. The forward-looking statements contained in this news release are expressly qualified 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.

Contact Information:

Greg Reid
Chief Financial Officer
(416) 818-9822

Sean Peasgood
Investor Relations
(416) 565-2805

Glenda Leyte
Marketing Manager
(709) 757-5757 extension 288