Mr. Richard Jackson reports
SPARK POWER SEES PROFITABILITY IMPROVE FROM PRIOR QUARTER AS MARGINS SHOW SIGNS OF RECOVERY AND INITIAL COST CUTS TAKE HOLD; ACHIEVES RECORD QUARTERLY REVENUE
Spark Power Group Inc. has released its financial results for the three-month period ended March 31, 2022.
"As expected, the company experienced early signs of margin recovery amid continued very strong demand for our services," said Richard Jackson, president and chief executive officer, Spark Power Corp. "Although challenging market conditions persist, we are confident that we will continue to see our margins improve and our business integration initiatives further reduce overhead costs, painting a more profitable path forward through the balance of 2022 and beyond," added Mr. Jackson.
"We are pleased to see sequential growth quarter on quarter for both revenues and adjusted EBTIDA margins as we execute on our plans to improve margin realization and rationalize our cost structure," said Richard Perri, executive vice-president and chief financial officer, Spark Power Corp. "With the tailwinds of the equity injection of $39.6-million and the continued support of our lender, we will continue the final stages of the wholesale integration of all acquired companies under our One Spark platform, positioning us well for scalability and profitable, long-term growth," added Mr. Perri.
Financial highlights -- first quarter 2022:
- Revenue of $70.0-million in Q1 2022, as compared with $56.0-million in Q1 2021 and $65.4-million in fourth quarter 2021, representing increases of 25.0 per cent and 7.0 per cent, respectively;
- Gross margins, excluding depreciation and amortization, were 23.7 per cent in Q1 2022, up 4.5 per cent from Q4 2021;
- Selling, general and administration costs, excluding depreciation and amortization, were $13.8-million, down $1.3-million or 8.6 per cent from Q4 2021;
- $4.5-million of pro forma annualized selling, general and administration cost savings executed through the start of second quarter;
- Adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) was $2.8-million or 4.0 per cent of revenue in Q1 2022, and $3.9-million or 5.6 per cent of revenue on a pro forma basis, as compared with $2.5-million or 3.6 per cent of revenue in Q4 2021.
Business highlights -- Q1 2022:
- Spark's sustainability business segment, which accounted for over 5.4 per cent of total revenue in the first quarter, continued its robust growth in Q1, up 37.4 per cent; this momentum is expected to be further powered by the signing of a power purchase agreement (PPA) contract for a particularly large utility-scale wind project in partnership with RBC, Shopify and Berkshire Hathaway Energy Canada;
- Key addition to Spark's leadership team with the hiring of April Currey as vice-president, sales and marketing:
- Experienced and operationally focused to support Spark through its next stage of maturity;
- Directly focused on increasing Spark's footprint across Canada and the United States, expanding sales pipeline and building a functional 4P marketing organization;
- Launching several new commercialization initiatives, including target market and segmentation, pricing standardization, management, and developing a fully integrated and standardized sales team;
- Closing of rights offering and the combined $39.6-million of equity financing primarily from the founders and three new institutional investors:
- Providing company with additional capital to execute its operational strategy and expansion opportunities;
- Continued momentum of integration of acquired companies under the One Spark project Darwin platform -- delivering business stability, scalability and profitability for the long term.
Quarterly conference call
Management is hosting an investor conference call and webcast on May 16, 2022, at 8:30 a.m. ET, to discuss its financial results in greater detail. To join by telephone, dial: 1-888-506-0062 (toll-free in North America) or 1-973-528-0011 (local and international), with conference ID 45326. To listen to a live webcast of the call, please visit the investor relations section of Spark Power's website. 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 first quarter 2022 interim unaudited condensed consolidated financial statements are available on Spark Power's website and will be filed on SEDAR.
About Spark Power Group Inc.
Spark Power is a leading independent provider of end-to-end electrical services, operations and maintenance services, and energy sustainability solutions to the industrial, commercial, utility and renewable asset markets in North America. It works to earn the right to be its customers' trusted partner in power. Its highly skilled and dedicated people, located in the communities it serves, combined with its knowledge of the power industry, technology expertise and commitment to safety, ensure it delivers the right solutions that keep its customers' operations up and running today and better equipped for tomorrow.
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