The Market should soon recognize the true potential of KPRTheir 3rd quarter filing shows the quality of the companies they are involved with for increased revenue which will be ongoing.
Revenue increased by 36% and 64% for Q3 2019 and Year to Date respectively over the comparative periods in the prior year. Gross profit for the nine months ended September 30, 2019 was $5.4 million an increase of $1 million over the comparative period in the prior year. Gross margin for the nine months ended September 30, 2019 was 50% compared to 67% for the same period in the prior year. The gross margin is in line with management's expectations and reflects the adjusted mix of revenue and cost of sales under a growing organization with changing product and service offerings. Adjusted EBITDA for the three months ended September 30, 2019 was $206,435 compared to $8,453 for the third quarter in the prior year. For the nine months ended September 30, 2019, Adjusted EBITDA improved to $707,263 compared to negative $(368,257) in the same period of 2018.
The impact of accretive acquisition and overall scaling of operations has resulted in lower operating expenses as a percentage of revenue. Total operating expenses (excluding share-based compensation) for the nine months ended September 30, 2019 was $5.7 million or 57% of revenue and that compares to a ratio of 79% in the same period of 2018. This improvement demonstrates the favourable impact on earnings as Corporate overhead expenses are spread over a much larger and growing revenue base.
Cash flows from operating activities was $221,518 for the nine months ended September 30, 2019. For the nine months ended September 30, 2018, cash flows used in operating activities was $1,424,438. This is a significant positive change of $1,645,956 and reflects strong working capital management and improved operational performance. This positive change is also due to the application of IFRS 16, which requires the recognition of lease contracts on a lessee's statement of financial position as a lease liability and a right-of-use asset.
Outlook for final Quarter 2019
Kontrol anticipates that total revenues for 2019 will be in the range of $15 to $16 Million with the difference being timing of projects completed and billed. That represents an increase of approximately 40% over 2018 revenues and driven by strong organic growth and new customer acquisition.
Kontrol is currently in final negotiations with the previously announced acquisition of an electrical retrofit company (the Vendor). The Vendor is required to deliver financial statements to Kontrol and an updated final purchase and sale agreement. Should the transaction be completed prior to year end Kontrol will exit 2019 on a run rate of approximately $23 Million. Factors expected to influence the ending revenue run rate for Kontrol are the timing of the closing of the potential acquisition and the completion of certain projects prior to year end.