Tantalus Systems Holding Inc. Reports Financial Results for Q4 and Fiscal Year of 2022

Burnaby, British Columbia--(Newsfile Corp. - March 14, 2023) - Tantalus Systems (TSX: GRID) ("Tantalus" or the "Company"), a smart grid technology company focused on helping build sustainable utilities for the future, is pleased to announce its financial and operating results for the fourth quarter and year ended December 31, 2022.

Q4 Financial Highlights¹:

• Revenue: Generated $12.2 million (CND$16.6 million), representing the highest quarterly revenue in Tantalus' history and approximately 60% growth over the prior year period.
• Gross Profit² Margin: Increased to 45% as compared to 44% over the prior year period.
• Adjusted EBITDA²: Delivered positive $0.1 million (positive CND$0.1 million).

Year-End Financial Highlights¹:

• Revenue: Generated $39.6 million (CND$51.5 million), representing approximately 23% growth over the prior year.
• Annual Recurring Revenue (ARR)²: Estimated at approximately $9.8 million (CND$12.8 million) as at December 31, 2022, representing approximately 36% growth over the prior year.
• Gross Profit² Margin: Increased to 48% as compared to 45% over the prior year.
• Adjusted EBITDA²: Delivered negative $2.4 million (negative CND$3.1 million) reflecting the Company's ongoing investments in the TRUSense Gateway R&D initiative and the integration of Congruitive.
• Total Assets: The Company had total assets amounting to $37.4 million (CND$50.6 million), inclusive of $5.9 million (CND$7.9 million) in cash but exclusive of $0.7 million (CND$0.9 million) restricted cash supporting performance and payments bond in connection with a customer deployment. Adjusted Working Capital was $5.0 million (CND$6.7 million).
• Sales Orders: The Company converted approximately $42 million (CND$54.7 million) in orders from its sales pipeline, representing the highest order conversion for a calendar year in the Company's history and year-over-year growth of approximately 12%.

"Achieving 23% revenue growth and an increase in our Gross Profit Margin percentage as compared to the prior year reflects the significant effort put forth by our employees throughout 2022 and the value we are delivering to the utilities we serve," said Peter Londa, President & CEO of Tantalus. "As utilities seek to prepare for the accelerated adoption of electric vehicles (EVs) while also leveraging data to protect their power transformer fleets, we increased our investment in R&D to accelerate the delivery of our next-generation TRUSense Gateway, expand our AI-enabled data analytics capabilities and integrate the engineering team from Congruitive into our broader product development group. These investments in R&D negatively impacted our Adjusted EBITDA throughout 2022, but we believe the Company is well-positioned to deliver shareholder value given the strong tailwinds across the utility industry. While we remain mindful of the uncertain economic climate, we enter 2023 with sufficient flexibility and visibility to maintain our growth trajectory."

The Company will hold a conference call and webcast to discuss the financial results on Wednesday, March 15, 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

Participants please ask to be joined to the Tantalus Systems call.

Webcast

https://event.choruscall.com/mediaframe/webcast.html?webcastid=31FmeqGY

Replay Information

A conference call and webcast replay will be available until March 22, 2023 at the link referenced 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: 1963285

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 twelve months ended December 31, 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. "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 Adjusted 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 and other 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

To view an enhanced version of this graphic, please visit:

https://images.newsfilecorp.com/files/7752/158440_60637886d4906bbc_002full.jpg

Reconciliation of Net (Loss)/Income to Adjusted EBITDA
 

To view an enhanced version of this graphic, please visit:

https://images.newsfilecorp.com/files/7752/158440_60637886d4906bbc_003full.jpg

(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

To view an enhanced version of this graphic, please visit:

https://images.newsfilecorp.com/files/7752/158440_60637886d4906bbc_004full.jpg

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: increasing demand for the Company's solutions going forward arising from the need for utilities to prepare for the accelerated adoption of electric vehicles (EVs) while also leveraging data to protect their power transformer fleets, the adoption, performance and development of the Company's solutions, including the TRUSense Gateway, data analytics and C.IQ offerings, and the benefits of investment in related R&D initiatives to support and accelerate growth for the Company.

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 Financial information is reported in United States dollars ("$") unless otherwise stated and in accordance with International Financial Reporting Standards ("IFRS"). Where balances are also expressed in Canadian dollars in this press release, an average foreign exchange rate of 0.7366 and 0.7685 for the three and twelve months ended December 31, 2022 for income statement items and a foreign exchange rate of 0.7383 as at December 31, 2022 for balance sheet items has been applied.
 

² See "Non-IFRS and Other Financial Measures."

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/158440

SOURCE Tantalus Systems Holding Inc.