Carmanah Reports Third Quarter 2015 Results

November 12, 2015
Send to a friend Share RSS Facebook Twitter

Carmanah Technologies Corporation (TSX: CMH) (“the Company” or “Carmanah”) today reported its third quarter financial results for the period ended September 30, 2015.  Currency amounts are in U.S. dollars unless otherwise noted.

For the quarter ended September 30, 2015, the Company recorded revenues of $19.9 million, up from $12.2 million in the same period of 2014.  About $6.0 million of the increase in revenue was attributable to the Sabik Group of Companies (“Sabik” or the “Sabik companies”), which were acquired on July 2, 2015.  Combined existing operations generated about $1.7 million in revenue growth, representing approximately 14% overall organic growth compared to the third quarter of 2014.

The net loss for the third quarter of 2015 was $0.3 million, down from net income of $0.2 million from the comparable period in 2014.  The comparative change is mainly attributable to the purchase price allocation of the Sabik acquisition.  On the closing date Sabik had a significant order backlog from which a future profit of $1.3 million was estimated. This estimated profit was recorded as an intangible asset on the acquisition date and is being amortized as orders are shipped.  The income statement effect of this amortization was approximately $0.85 million in the third quarter.  Normalized net income for the quarter would have been $0.5 million if not for the order backlog amortization related to the acquisition. 

Carmanah management relies on adjusted EBITDA (a non-IFRS measure) to gauge financial performance. In the third quarter of 2015 the Company’s generated $2.1 million of adjusted EBITDA, up from $1.1 million in the same period of 2014.  A table reconciling net profit and adjusted EBITDA is included in this release.

The business highlights by segment for the quarter included:

  • The Signals segment, which now includes the July 2015 acquisition of the Sabik companies, generated revenues in the third quarter of approximately $11.4 million, up $7.9 million from $3.5 million in the third quarter of 2014.  Sabik revenues of approximately $6.0 million contributed to the largest part of the increase but existing operations contributed approximately $1.9 million of revenue growth on a comparative basis.
  • The Illumination segment generated revenues of $1.0 million in the third quarter which was down from revenue of $3.4 million in the third quarter of 2014 due largely to timing of project awards.  By quarter end orders in hand had grown which will lead to a revenue rebound in the fourth quarter.  However, in spite of the order backlog at the beginning of the fourth quarter, it is likely that Illumination revenues in 2015 will be lower than 2014.
  • The Power segment generated revenues of $7.4 million in the third quarter, up $2.2 million from $5.2 million in the comparative quarter in 2014.  Both On-Grid and Off-Grid verticals contributed to the increase in revenue. 

“Carmanah’s overall performance in the third quarter was very sound and led equally by our Power and Signals businesses.  Both groups, including our recently acquired Sabik companies, exceeded our expectations.” said John Simmons, CEO. “And while our Illumination revenues slumped in the third quarter we remain fully committed to the future potential of this business.”    

The financial highlights for the quarter and the year to date are provided below:

  Three months ended September 30,

Nine months ended
September 30,

(US$ thousands) 2015 2014 2015 2014
Revenue  19,850 12,168 46,879 30,281
Gross margin % 33.40% 35.40% 34.20% 34.80%
Total operating expenditures 6,009 3,613 8,470 8,801
Net (loss)/income -283 195 10,079 710
Adjusted EBITDA * 2,084 1,121 6,064 2,737

*Adjusted EBITDA is a Non-IFRS measure.  Foreign exchange gain/ loss is no longer included in the adjusted EBITDA calculation, as such historical amounts have been updated. 

Financial Condition at September 30, 2015 compared to December 31, 2014

  • Cash and cash equivalents of $17.5 million, up $8.7 million from $8.8 million
  • Working capital of $27.0 million, up $10.9 million from $16.1 million

Complete set of Financial Statements and Management Discussion & Analysis

A complete set of the September 30, 2015 Interim Financial Statements and Management’s Discussion & Analysis are available on Carmanah’s corporate website. To view these documents, visit: Both documents are also filed on SEDAR ( 


EBITDA reconciliations Three months ended September 30, Nine months ended September 30,
(US$ in thousands) 2015 2014 2015 2014
Net (loss)/income -283 195 10,079 710
Income taxes -97 -5,602 -1
Amortization 1,218 93 1,519 264
Non-cash stock based compensation 343 112 634 213
EBITDA* 1,181 400 6,630 1,186
Merger and acquisition costs 443 129 1,215 731
Extraordinary legal costs 7 257 32 665
Investment tax credits -4,320
Restructuring and asset write offs/(recovery) -8 396 -122
Other inventory write downs/(recoveries) -21 368
Foreign exchange loss 482 335 1,743 277
Adjusted EBITDA* 2,084 1,121 6,064 2,737

 *Adjusted EBITDA is a Non-IFRS measure.  Foreign exchange gain/ loss is no longer included in the adjusted EBITDA calculation, as such historical amounts have been updated. 

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, asset write offs, and foreign exchange gains and losses.   

About Carmanah Technologies Corporation

Headquartered in Victoria, British Columbia, Carmanah produces a portfolio of products focused on energy optimized LED and solar technologies. We design, develop and distribute energy efficient LED solutions for infrastructure including: signaling systems for the marine aids to navigation, airfield ground lighting, offshore wind marking, aviation obstruction and traffic markets.  Carmanah’s product portfolio also includes industrial and commercial solar powered outdoor LED lighting systems, and solar on and off-grid power generation systems.  Since 1996, we have earned a global reputation for delivering strong and effective products for industrial applications that perform reliably in some of the world’s harshest environments. Our LED and solar power systems provide durable, dependable, efficient and cost-effective solutions which have been deployed in over 400,000 installations in 110 countries. The Carmanah brand portfolio includes Go Power! and recently acquired companies, Sol and Sabik.

Carmanah Technologies Corporation:
Evan Brown, (250) 380-0052
Chief Financial Officer/Corporate Secretary

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 or Sabik to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Such factors include, but are not limited to: our ability to become a worldwide leader in the marine aids to navigation industry, the potential growth of the off shore wind safety market or our ability to participate in any growth and other general uncertainties that may impact actual outcomes. These forward-looking statements are based on management’s current expectations and beliefs but given the uncertainties, assumptions and risks, readers are cautioned not to place undue reliance on such forward-looking statements or information. Carmanah disclaims any obligation to update, or to publicly announce, any such statements, events or developments except as required by law.

 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 and on the Company’s website at 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.