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Spark Power’s Revenue Returning to Pre-Pandemic Levels with Renewables and Sustainability Leading the Charge

Wednesday, 11 November 2020 07:30 PM

Spark Power Group Inc.


OAKVILLE, ON / ACCESSWIRE / November 11, 2020 / Spark Power Group Inc. (TSX:SPG), parent company of Spark Power Corp. ("Spark Power" or the "Company"), today announced financial results for the three and nine month periods ended September 30, 2020. All amounts are in Canadian dollars unless otherwise specified.

"Economies across North America and around the world continue to be impacted by the COVID-19 pandemic, and Spark Power is no different," says Jason Sparaga, co-CEO of Spark Power. "Thanks to our diversification across geographies and customer segments, our focus on industries with stable and growing underlying demand, and our high-quality team, we have been able to weather the worst of the pandemic extremely well, and are coming out strong," he says. "Our quarterly revenue is now back to pre-pandemic levels, and we expect to see a return to historic rates of organic growth over the next several quarters. While we are continuing to experience margin compression due to competitive pricing pressures and some job inefficiencies arising from COVID-19 restrictions, we are seeing month-to-month improvements, with further gains expected in the coming months."

"I am particularly excited by the performance of Spark's Renewables and Sustainability divisions, which have both achieved significant milestones," says Andrew Clark, co-CEO of Spark Power Corp. He adds: "Our Renewables division is tracking at record revenue levels and growing faster than the industry as a whole. Our Sustainability team continues to develop new offerings designed to bring cost-effective sustainability solutions to our customers. A major milestone was the signing of the Company's first Power Purchase Agreement, sharing the output of a solar project developed by BluEarth with our long-time customer, the Royal Bank of Canada."

"We continue to be focused on managing our liquidity as our business grows and demands additional working capital, and our bank, (the Bank of Montreal, "BMO"), continues to be very supportive of our business," says Dan Ardila, CFO, Spark Power Corp. "While the Canada Emergency Wage Subsidy was critical to us, especially in the second quarter, as our business returns to prepandemic levels we are far less dependent on these subsidies and, in fact, we do not expect to qualify for any further funding support in the fourth quarter."

Financial Highlights

  • Quarterly revenue of $61.4 million, as compared to $52.0 million from the comparable quarter in 2019, representing an increase of 18.0%.
  • On a proforma basis, revenue decreased by $0.8 million or 1.3%. Canadian sales were down $5.6 million or 10.0% in the quarter, while U.S. based sales increased $4.8 million or 77.7%.
  • Quarterly adjusted EBITDA of $9.0 million, as compared to $8.2 million from the comparable quarter in 2019 representing an increase of 9.2%. On a proforma basis, Adjusted EBITDA was down $0.8 million or 8.0%.
  • Liquidity decreased from the prior quarter as draws on the Company's $30.0 million operating line increased to $15.7 million, up from $8.7 million at June 30, 2020, but down from $23.3 million at March 31, 2020 and $17.4 million at December 31, 2019.

Business Highlights-Operations

  • BluEarth Renewables signed power purchase agreements with Bullfrog Power and RBC, a 39 MW solar project to be built in southern Alberta.

  • Fisher River Cree Nation unveiled Manitoba's biggest solar farm, a source of Bullfrog Power's green energy.
  • Crews from Spark Power's Eastern Canada High Voltage team spent nearly two months completing storm restoration projects across the Eastern and Southern United States, including restoring power for those affected by Hurricane Laura.
  • Spark Power announced a partnership with EcoGrid Technologies Inc., an energy equipment company that implements advanced IoT-enabled lighting systems that optimize lighting levels and energy use.
  • Spark Power's Renewables division has entered into a partnership with Envision Digital International Pte. Ltd. and Heliolytics to launch SolarCareTM, a fully integrated operations and maintenance program for solar energy.

Business Highlights-Corporate Development

  • Spark Power broke ground at the site of a new head office in Oakville, Ontario. This 40,000 square foot office space, set for completion in 2022, will be designed to focus on the training and development of our field technicians, will be bullfrogpowered and will encompass a number of sustainability features including rooftop solar, electric vehicle charging, and an indoor living wall.
  • During the third quarter, the Company and the Special Committee announced the resumption of the Strategic Review Process (which was paused during the second quarter), intended to explore strategic alternatives to provide equity capital.
  • Working with its bank, BMO, Spark Power extended its COVID-19 loan to November 30, 2020, and the Company is currently working with BMO on an extended repayment plan.
  • The Company has started working with BMO on the syndication of our credit facilities. Through the syndication process, Spark anticipates access to additional debt capital as the company continues to grow.

Quarterly Conference Call
Management is hosting an investor conference call and webcast tomorrow, November 12, 2020, at 8:30 a.m. ET to discuss its financial results in greater detail. To join by telephone dial: +1 844-602-0380 (toll-free in North America) or +1 862-298-0970 (local and international), with conference ID: 38057. To listen to a live webcast of the call, please visit the investor relations section of Spark Power's website at 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 Third-Quarter 2020 Interim Unaudited Condensed Consolidated Financial Statements and Notes of its Third-Quarter 2020 Management Discussion and Analysis are available on Spark Power's website at, and will be filed on SEDAR at

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

Forward-Looking Statements
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, Clark and Ardila relating to COVID-19, government subsidies relating to COVID-19, future revenues and gross margins, 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


  Three Months Ended September 30,     Nine months ended September 30,  
  2020     2019     % Change     2020     2019     % Change  
  61,436     52,045       18.0 %   161,288     130,592       23.5 %
Gross Profit
    17,909       17,344       3.3 %     47,213       43,394       8.8 %
Gross Profit Margin
    29.2 %     33.3 %             29.3 %     33.2 %        
Selling, General & Administration
    14,167       12,206       16.1 %     39,157       34,833       12.4 %
Income from Operations
  3,742     5,138       (27.2 %)   8,056     8,561       (5.9 %)
  8,872     6,807       (30.3 %)   22,245     11,885       (87.2 %)
EBITDA Margin (1)
    14.4 %     13.1 %             13.8 %     9.1 %        
Adjusted EBITDA (1)
  8,984     8,223       9.3 %   23,476     16,938       38.6 %
Adjusted EBITDA Margin (1)
    14.6 %     15.8 %             14.6 %     13.0 %        
Pro-forma Adjusted EBITDA (1)
  8,984     9,766       (8.0 %)   23,476     22,558       4.1 %
Pro-forma Adjusted EBITDA Margin (1)
    14.6 %     15.7 %             14.6 %     14.0 %        
Pro-forma Revenue (1)
  61,436     62,254       (1.3 %)   161,288     160,738       0.3 %
            Q3 2020       Q2 2020       Q1 2020       Q4 2019       Q3 2019  
Bank Indebtedness
          20,394     13,711     28,255     21,597     20,132  
Senior Secured Long-term Debt
          66,632     67,265     61,281     62,516     56,040  
Promissory Notes
          13,488     13,488     16,213     16,213     14,773  
Total Debt (2)
          100,514     94,464     105,749     100,326      90,945  

1 EBITDA, Adjusted EBITDA, Pro-forma Adjusted EBITDA, Adjusted EBITDA Margin, Pro-forma Adjusted EBITDA Margin and Pro-forma Revenue are non-IFRS measures. Refer to Non-IFRS measures for definitions of these terms.

2 Total debt includes Bank indebtedness, long-term debt and promissory notes.

The following table is a summary of Spark Power's results for the periods indicated:

(in $000's)
  Three months ended September 30,     Nine months ended September 30,  
  2020     2019     2020     2019  
  61,436     52,045     161,288     130,592  
Cost of sales
    43,527       34,701       114,075       87,198  
Gross profit
    17,909       17,344       47,213       43,394  
Selling, general and administrative expenses
    14,167       12,206       39,157       34,833  
Income from operations
    3,742       5,138       8,056       8,561  
Finance costs
    (1,571 )     (1,282 )     (4,969 )     (3,878 )
Transaction costs
    -       (905 )     -       (1,442 )
Reorganization and other non-recurring costs
    (112 )     (511 )     (1,231 )     (1,511 )
    -       -       -       (2,100 )
Foreign exchange gain
    187       112       274       84  
    (1,496 )     (2,586 )     (5,926 )     (8,847 )
Income (loss) before income taxes
    2,246       2,552       2,130       (286 )
Income tax recovery (expense):
    (1,124 )     (2,030 )     (2,820 )     (594 )
    948       2,098       2,318       841  
    (176 )     68       (502 )     247  
Net income (loss)
    2,070       2,620       1,628       (39 )
Cumulative translation adjustment
    (19 )     -       (461 )     -  
Comprehensive income (loss)
  2,051     2,620     1,167     (39 )
    8,872       6,807       22,245       11,885  
EBITDA margin
    14.4 %     13.1 %     13.8 %     9.1 %
Adjusted EBITDA
    8,984       8,223       23,476       16,938  
Adjusted EBITDA margin
    14.6 %     15.8 %     14.6 %     13.0 %
Pro-forma Adjusted EBITDA
    8,984       9,766       23,476       22,558  
Pro-forma Adjusted EBITDA margin
    14.6 %     15.7 %     14.6 %     14.0 %
Pro-forma Revenue
  61,436     62,254     161,288     160,738  


Investor and Regulatory Inquiries:
Dan Ardila
Chief Financial Officer
[email protected]
+1 (905) 829-3336 x127

Media Inquiries:
Kim Samlall
Director, Marketing Communications
[email protected]
+1 (905)-829-3336 x185

Spark Power Group Inc., Wednesday, November 11, 2020, Press release picture

SOURCE: Spark Power Group Inc.

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