Solar company says lower costs contributed to the success
Carmanah Technologies showed increased profits in its latest quarter, saying a streamlined product line and reduced operating costs improved the bottom line.
The Victoria-based solar power and lighting company had net income of $1.2 million in its third quarter ending Sept. 30 -- up from the $700,000 reported during the same period a year ago.
Sales for the quarter were $9.5 million, down $2.7 million from the same three months in 2008. The decline was due in part to exiting low-margin product lines, the company said in a statement.
"Although the global economic downturn continues to present a challenge, a streamlining of operations and the resulting reduction in operating expenses is helping to keep operating costs low," said Carmanah CEO Ted Lattimore. "Looking ahead, our priorities remain: Focus on our strengths, keep costs low, and continue to offer the high quality, cost-effective solar technology."
Gross margins were cut to 33 per cent, down five points from the year-ago quarter.
Carmanah also reported no debt and a cash balance of $8.9 million, up from $4.1 million in the third quarter of 2008.
Shares in Carmanah traded up more than five per cent on the news, finishing four cents higher at 79 cents on the Toronto Stock Exchange yesterday.
The company sold its LED edge-lit sign business to David Green, who founded Carmanah nearly two decades ago. As part of the deal, Green resigned from the board of directors.
Lattimore said the company launched new signal lights and its signature EverGEN 1710, and saw significant installations at major U.S. facilities such as NASA and the southern California Edison nuclear facility. Designed as a compact stand-alone lighting alternative for off-grid parking lots and other municipal, commercial or industrial areas, the new EverGEN 1710 light combines motion-sensing capabilities with a range of energy saving operating features.
The company also started reporting in U.S. dollars this past quarter, saying the switch will better reflect business activities. "Our pricing, manufacturing and most of our expenses are in U.S. dollars, so reporting is U.S. dollars makes good sense," the company said.
Carmanah cut 20 employees from its payroll -- including 14 at its Vic West head office -- earlier this month after saying it failed to make aggressive sales targets. The workforce cuts will be reported in the next quarter.
The layoffs amount to a 15 per cent reduction in Carmanah's workforce, leaving the company with 110 employees -- 75 of whom are based in Victoria.