Carmanah Technologies' massive restructuring efforts in June smoothed over what would have been a rough third quarter, company officials said yesterday.
The solar power and lighting company said cutting its workforce by 40 per cent, closing its Saanich manufacturing plant and realigning its sales and distribution networks allowed Carmanah to navigate challenging global market conditions and deliver a profitable quarter for the period ending Sept. 30.
The company (TSX:CMH) posted a net income of $800,000, an improvement to the bottom line over the same period a year ago when Carmanah lost $800,000. It was also the third consecutive EBITDA quarterly profit, adjusted for the restructuring change.
Carmanah chief financial officer Roland Sartorius said the company's cash reserves increased to $5.5 million, up $1.4 million from the same quarter in 2007.
"Our recent efforts to control costs and support sustained, profitable growth could not have come at a better time," said Sartorius. "Guided by solid business metrics, our net cash balance has grown from a 2007 low of negative $2 million to more than $5 million. We've also maintained our positive growth trend, with no bank debt."
Sales figures slipped $1.6 million from the year-ago quarter to $13.9 million. Gross margins for 2008 were at 37 per cent, up from 30 per cent in 2007.
The company had a busy quarter, introducing a new flagship product to its line of solar LED marine lanterns, partnering with wireless technology provider ENCOM and signing contracts for its aviation lights in the Middle East and solar power systems for telecommunications towers throughout North Africa.
Chief executive Ted Lattimore said keeping the focus on Carmanah's core strengths and controlling costs helped the company to weather a turbulent time.
"With the majority of our transition behind us, Carmanah is now prepared to face the challenges ahead as a much leaner, more focused and responsive business," he said in a statement. "I am confident that our team has the focus, commitment and skill to persevere, and that the current rocky markets will merely test and clarify our strategy."
Carmanah shares increased three cents, or 4.4 per cent, yesterday to close at 71 cents.