Victoria, British Columbia, Canada – Wednesday, August 13, 2008 – Carmanah Technologies Corporation (TSX: CMH) announces its financial results for the three-month period ended June 30, 2008.
The second quarter of 2008 represented a further milestone for Carmanah as the Company completed the final phase of its strategic renewal, entering into some significant partnerships, increasing sales, further reducing expenses, improving efficiency and achieving its second profitable Adjusted EBITDA (adjusted for restructuring charge) quarter in a row.
Highlights for the Quarter
Summary of Results
The second quarter of 2008 saw considerable change, as Carmanah embarked on the next phase in its restructuring with the goal of increasing its focus and returning the Company to sustained, profitable growth. According to Ted Lattimore, Carmanah CEO, these changes have laid the groundwork for a more focused and responsive organization. “Based on the findings of our Company-wide evaluation completed in the first quarter of 2008, it became clear that some significant changes were necessary to return the Company to a more profitable footing,” said Lattimore. “On June 25th we implemented these changes, and now with the majority of this transition behind us, the Company is free to move ahead as a more agile and responsive business. By focusing on our core strengths, controlling costs, and increasing the scalability and efficiency of our supply chain, we’re now free to focus on what we do best: delivering quality solar-powered lights and power systems. And we can do it more efficiently and effectively than ever before.”
Confirming this assessment, Roland Sartorius, Carmanah CFO, commented that throughout the second quarter of 2008, the Company has maintained its positive growth trend, showing increased sales and improved earnings over the same period last year, while benefiting from lower operating costs and a healthy cash balance. “Even with the costs and strategic challenges of implementing this comprehensive restructuring, the Company has achieved its second quarterly positive Adjusted EBITDA in a row,” said Sartorius. “As expected, the restructuring charge, which will be recorded over the next several quarters, is on schedule and to be recovered during the 2009 fiscal year. With increased cash, no bank debt, and continued positive cash flow, we’re going into the next quarter looking stronger than ever.”
Sales for the second quarter of 2008 were $15.7 million, $0.3 million higher than the same period in 2007. Solar LED sales provided strong growth in the quarter, with our solar marine, aviation and obstruction beacons leading the way. This growth was offset by lower sales in Solar Power Systems, primarily due to the fact that a significant grid tie project in Prince Edward Island was completed in the second quarter of 2007. There were no such comparable large scale projects in the second quarter of 2008. A summary of revenues from each of the Strategic and Tactical business segments is shown below:
|Sales Summary (CAD1,000’s)|
|Solar LED Lights||5,727||36.4%|
|Solar Power Systems||552||3.5%|
|Sales Summary (CAD1,000’s)|
|Solar LED Lights||4,138||26.8%|
|Solar Power Systems||2,046||13.3%|
|Sales Summary (CAD1,000’s)|
|Solar LED Lights||$1,589||38.4%|
|Solar Power Systems||(1,494)||(73.0%)|
Summary of EBITDA and Net Income
The Company uses certain non-GAAP measures to assist in assessing its financial performance. Non-GAAP measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. One such non-GAAP measure used for assessing financial performance is net income (loss) before interest, income taxes, amortization, and restructuring charge (“Adjusted EBITDA”).
|Three months ended
|Net income (loss)||(354)||(3,050)|
|Six months ended
|Net income (loss)||(271)||(3,514)|
Progress During the Quarter (including subsequent events)
With a 2008 second quarter Adjusted EBITDA of $0.4 million compared to loss of $(3.9) million for the same period of 2007, the second quarter of 2008 continues the momentum initiated in the first quarter of 2008. During this quarter, Carmanah announced a decision based on first-quarter results and market trends in both of strategic and tactical segments to further refine and accelerate the Company’s focus on its strategic direction. As a result, four major restructuring initiatives were announced, effective June 25th, 2008:
Other highlights during this quarter included:
Complete set of Financial Statements and Management Discussion & Analysis
A complete set of the second quarter 2008 Financial Statements and Management’s Discussion & Analysis are available on Carmanah’s corporate website. To view full financials, visit: www.carmanah.com/content/investors/financialreports.aspx
Conference Call Details
To discuss the second quarter results, Carmanah has scheduled a conference call for 2:00 pm PT (5:00 pm ET) on Wednesday, August 13th, 2008. To access this conference call by telephone, dial 1.888.882.9090 (Canada and US) or +1.403.770.0861 (international) approximately five to ten minutes before start time. When prompted for the conference ID, enter 2510558.
A recording of the conference will also be available on Carmanah’s corporate website within three business days.
About Carmanah Technologies Corporation
As one of most trusted names in solar technology, Carmanah has earned a reputation for delivering strong and effective products for industrial applications worldwide. Industry proven to perform reliably in some of the world’s harshest environments, Carmanah’s LED lights and power systems provide a durable, dependable and cost effective energy alternative. Carmanah is a publicly traded company, with common shares listed on the Toronto Stock Exchange under the symbol “CMH” and on the Berlin and Frankfurt Stock Exchanges under the symbol “QCX”. For more information, visit carmanah.com.
Carmanah Technologies Corporation
Roland Sartorius, Chief Financial Officer
For further information:
Investor Relations: Roland Sartorius
Public Relations: David Davies
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 which are described under the caption “Note Regarding Forward-looking Statements” and “Key Information – Risk Factors” and elsewhere in Carmanah’s Annual Report for the fiscal year ended December 31, 2007, as filed on SEDAR at www.sedar.com. The risk factors identified in Carmanah’s Annual Report 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.