VICTORIA, British Columbia--(BUSINESS WIRE)--
Carmanah Technologies Corporation (CMH.TO) (“the Company” or
“Carmanah”) today reported its third quarter financial results for nine
and three months ended September 30, 2014.
For the quarter ended September 30, 2014, the Company recorded revenues
of $12.2 million, net income of $0.2 million and EBITDA of $0.4 million.
This is an increase from the same period in 2013 which had revenues of
$4.9 million, a net loss of $1.4 million and an EBITDA loss of $1.3
million.
“Our positive momentum continued in the third quarter with revenues
up 149% compared to 2013’s third quarter,” stated John Simmons, CEO. “While
some of the gain was attributed to the inclusion of revenues from our
acquisition of Sol, Inc., our traditional Carmanah revenues were up 105%
on a comparative basis. Naturally, we are delighted with the
results.”
Added Mr. Simmons, “For the first time in Carmanah’s history we have
produced operating profit in three successive quarters. As we
enter our final quarter for 2014 we do so with an order backlog that
continues to grow. At the end of the third quarter our order
backlog totalled $11.7 million which is up from $7.7 million at the end
of the second quarter.”
Highlights for the third quarter and year to date are provided below:
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|
Three months ended September 30,
|
|
|
Nine months ended September 30,
|
(US$ thousands)
|
|
2014
|
|
|
2013
|
|
|
|
2014
|
|
|
2013
|
|
Revenue
|
|
12,168
|
|
|
4,863
|
|
|
|
30,281
|
|
|
18,147
|
|
Gross margin %
|
|
35.4
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%
|
|
23.7
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%
|
|
|
34.8
|
%
|
|
26.5
|
%
|
Operating expenditures
|
|
(3,613
|
)
|
|
(2,599
|
)
|
|
|
(8,923
|
)
|
|
(8,439
|
)
|
Net income/(loss)
|
|
195
|
|
|
(1,442
|
)
|
|
|
710
|
|
|
(4,631
|
)
|
EBITDA *
|
|
400
|
|
|
(1,297
|
)
|
|
|
1,186
|
|
|
(3,901
|
)
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Adjusted EBITDA *
|
|
786
|
|
|
(1,131
|
)
|
|
|
2,460
|
|
|
(2,770
|
)
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* A Non-IFRS measure
Financial Condition at September 30, 2014 compared to December 31,
2013
-
Cash and cash equivalents of $10.7 million, up from $5.2 million
-
Working capital of $16.0 million, up from $8.1 million
-
Continued debt-free operations
Business and operational highlights
During the third quarter the following events were announced and
completed in the quarter or subsequent to quarter end:
-
On July 2, 2014, we completed the acquisition of SOL Inc. (“Sol”), a
Florida based solar outdoor lighting competitor. The acquisition was
completed through a merger, under which we acquired 100% ownership of
Sol in exchange for the issuance of 3,785,860 post consolidated shares
which were issued from treasury and a cash payment of $0.06 million.
This was a related party transaction, as our Chairman of the Board and
largest shareholder, Michael Sonnenfeldt was also the majority
shareholder of Sol. Sol contributed approximately $2.0 million in
reported revenue in the third quarter of 2014.
-
On July 18, 2014, we announced our intention to complete a
consolidation of our common shares on the basis of one (1)
post-consolidation Common Share for every ten (10) pre-consolidation
Common Shares (the “Consolidation”). The Consolidation received
approval from the TSX in early August and the post-consolidation
shares began trading on the Toronto Stock Exchanges on August 14,
2014. Prior to the consolidation we had 169,770,617 shares
outstanding. Fractional shares that might have been created by the
consolidation were rounded down and as a result the total post
consolidation shares outstanding on August 14, 2014 was 16,977,000.
-
On July 17, 2014, we closed a placement which raised proceeds of
approximately $3.0 million CDN from the issuance of 1,200,000 post
consolidated shares at a price of $2.50 CDN a share. This private
placement was subscribed by members of our board of directors and was
completed in an effort to bolster our working capital and balance
sheet to position ourselves to take advantage of future growth
opportunities.
-
In September 2014, we secured a long term U.S. Coast Guard contract
under which we will fulfill with our new M800 series marine lantern.
The contract has no guaranteed financial value for purchases, but the
solicitation provided a target for purchases of $3.4 million over the
life of the contract, which may be up to 5 years if all option years
are exercised.
Reporting Currency
Unless otherwise indicated, all financial information presented in this
press release is in US dollars.
Complete set of Financial Statements and Management Discussion &
Analysis
A complete set of the third quarter ended September 30, 2014 Financial
Statements and Management’s Discussion & Analysis are available on
Carmanah's corporate website. To view these documents, visit: www.carmanah.com/Company/Investors/Financial_Reports.aspx.
Both documents are also filed on SEDAR (www.sedar.com).
EBITDA
EBITDA reconciliation
|
|
Three months ended September 30,
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|
|
Nine months ended September 30,
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(US$ in thousands)
|
|
2014
|
|
2013
|
|
|
|
2014
|
|
|
2013
|
|
Net income/(loss)
|
|
195
|
|
(1,442
|
)
|
|
|
710
|
|
|
(4,631
|
)
|
Add/(deduct):
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|
|
|
|
|
|
|
|
|
Income tax
|
|
-
|
|
3
|
|
|
|
(1
|
)
|
|
5
|
|
Amortization
|
|
93
|
|
217
|
|
|
|
264
|
|
|
692
|
|
Non-cash stock based compensation
|
|
112
|
|
(75
|
)
|
|
|
213
|
|
|
33
|
|
EBITDA*
|
|
400
|
|
(1,297
|
)
|
|
|
1,186
|
|
|
(3,901
|
)
|
Merger and acquisition costs
|
|
129
|
|
-
|
|
|
|
609
|
|
|
-
|
|
Extraordinary legal costs
|
|
257
|
|
166
|
|
|
|
665
|
|
|
166
|
|
Restructuring and asset write offs
|
|
-
|
|
-
|
|
|
|
-
|
|
|
965
|
|
Adjusted EBITDA*
|
|
786
|
|
(1,131
|
)
|
|
|
2,460
|
|
|
(2,770
|
)
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* A Non-IFRS measure
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Management believes that the non-IFRS measures presented provide useful
information by excluding certain items that may not be indicative of
Carmanah’s core operating results and that this non-IFRS measure will
allow for a better evaluation of the operating performance of the
Company’s business and facilitate meaningful comparison of results in
the current period to those in prior periods as well as future periods.
Reference to this non-IFRS measure should not be considered as a
substitute for results that are presented in a manner consistent with
IFRS. This non-IFRS measure is provided to enhance investors’ overall
understanding of Carmanah’s current financial performance.
A limitation of utilizing this non-IFRS measure is that the IFRS
accounting effects of the non-recurring items do in fact reflect the
underlying financial results of Carmanah’s business and these effects
should not be ignored in evaluating and analyzing Carmanah’s financial
results. Therefore, management believes that Carmanah’s IFRS measures of
net loss and the same respective non-IFRS measure should be considered
together.
Non-IFRS measures do not have any standardized meaning prescribed by
IFRS and are therefore unlikely to be comparable to similar measures
presented by other companies. One such non-IFRS measure used for
assessing financial performance is EBITDA, defined as net income before
interest, income taxes, amortization, and non-cash stock based
compensation. The other non-IFRS measure used is Adjusted EBITDA, which
adjusts EBITDA for unusual or non-operating items such as merger and
acquisition costs, restructuring charges and asset write offs.
About Carmanah Technologies Corporation.
Since it’s founding in 1996, Carmanah has become one of the most trusted
names in solar technology, delivering reliable and cost-effective solar
powered products and systems for industrial applications worldwide. To
date, Carmanah's solutions for marine navigation, airfield ground
lighting, aviation obstruction, roadway illumination, parking lot
lighting, as well as on and off-grid power generation, have been
successfully deployed in over 400,000 installations in 110 countries
with proven performance in conditions ranging from desert heat to arctic
cold.
In 2013, through shareholder led initiatives, the company was
restructured under the leadership of CEO John Simmons, while the
Company’s largest shareholder, Michael W. Sonnenfeldt, became
non-executive Chairman. Carmanah’s current board members demonstrate
their belief in Carmanah's future by having been the largest investors
in each financing since the restructuring and now, as a group, own the
majority of Carmanah's issued and outstanding shares.
Carmanah markets its products through three distinct divisions.
Carmanah’s Signals Division produces products and systems for marine
aids to navigation, airfield ground lighting, obstruction and traffic
control. Carmanah’s Power Division designs and builds systems that
provide solar power in both grid connected and off-grid applications.
Carmanah’s Illumination Division produces solar powered lighting
solutions for street, parking lot and pathway applications.
Carmanah is publicly traded with common shares listed on the Toronto
Stock Exchange under the symbol "CMH”. For more information, visit www.carmanah.com.
Carmanah Technologies Corporation
“Stuart Williams”
Stuart Williams, Chief Financial Officer
For further information:
This release may contain forward-looking statements. Often, but not
always, forward-looking statements can be identified by the use of words
such as “expects,” “plans,” “estimates,” “intends,” “believes,” “could,”
“might,” “will” or variations of such words and phrases. Forward-looking
statements involve known and unknown risks, uncertainties, and other
factors which may cause the actual results, performance, or achievements
of Carmanah to be materially different from any future results,
performance, or achievements expressed or implied by the forward-looking
statements. These statements are based on management’s current
expectations and beliefs and are subject to a number of risks and
uncertainties. Examples of forward-looking information in this news
release include, but are not limited to, statements with respect to:
future revenues attributable to the USCG contract award. For additional
information on these risks and uncertainties, see Carmanah’ s most
recently filed Annual Information Form (AIF) and Annual MD&A, which are
available on SEDAR at www.sedar.com
and on the Company’s website at www.carmanah.com.
The risk factors identified in Carmanah’ s AIF and MD&A are not intended
to represent a complete list of factors that could affect Carmanah.
Accordingly, readers should not place undue reliance on forward-looking
statements. Carmanah does not assume any obligation to update the
forward-looking information contained in this press release.