Victoria, British Columbia, Canada – February 11, 2008 – Carmanah Technologies Corporation (TSX: CMH) is providing this business update ahead of its results for the year ended December 31, 2007 to confirm that a strategic review of the company, as previously announced by Ted Lattimore, Chief Executive Officer, has been completed. Carmanah’s strategic review has resulted in the company now being structured around two business segments that will help define the optimal structure for the company going forward:
According to Ted Lattimore, the optimal go forward business strategy will emphasize the company’s key revenue-producing activities while accommodating other complementary profitable opportunities. “Carmanah’s primary business is solar-powered technology, and we’ve earned a great reputation over the years for delivering innovative, long-lasting products for a number of markets. As new opportunities arise in the areas of solar lighting and solar power, as well as other energy-efficient technologies, it is important to consider their possible benefits to our technology and to our customer needs. But for us at this time, it is important to concentrate on our areas of expertise and profitability, and focus our efforts on delivering the best solar LED and solar power technology available. We will continue to develop innovative and profitable technologies such as the popular LED sign technology, but for 2008 and onward, the key words are customer-centric focus,” said Lattimore.
Fiscal 2007 was a year of transition for the company, a year that combined surplus inventory challenges with unfavourable foreign exchange rates, but it was also a year that welcomed a new executive team of proven business professionals to the roles of CEO, CFO and COO. “Due to the challenges experienced by the company throughout this year of transition, the first priority of the new management team was to end 2007 with a solid balance sheet that would provide a platform from which the new business strategy could be executed,” stated Roland Sartorius, Chief Financial Officer. As a result, for December 31, 2007, Carmanah expects to report a balance sheet that includes upward of $4 million in cash, inventory balances reduced to a range of between $10-11 million and no bank debt. Further, management has reviewed balance sheet accounts and recorded provisions including a write down of Goodwill. Based on preliminary data, revenues for fiscal 2007 are expected to be in the range of $58-60 million. Gross margins are expected to end up in the 25-27% range, lower than normal, primarily due to the foreign exchange and surplus inventory issues in 2007 and increased provisions that were recorded. Consequently, the net loss before tax for 2007 is anticipated to end up at approximately $10 million. Carmanah expects to release 2007 results on March 11, 2008.
“With Carmanah’s strategic review now complete and new business strategy in effect, the company looks forward to a disciplined, focused year ahead,” concluded Ted Lattimore. Carmanah will discuss the new business strategy with analysts over the next two weeks, and provide a more detailed discussion when the 2007 results are released.
Forward Looking Statements
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, 2006, 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.
About Carmanah Technologies Corporation
Carmanah is one of the world’s premier suppliers of renewable and energy-efficient technologies, including solar-powered LED lighting, solar power systems & equipment and LED illuminated signage. From its global headquarters in Victoria, British Columbia, Canada, Carmanah oversees a network of branch offices and sales representatives across Canada, the United States and the United Kingdom.
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 www.carmanah.com.
Carmanah Technologies Corporation
Chief Financial Officer
For further information, please contact:
Tel: (250) 380-0052
Public Relations: David Davies
Tel: (250) 382-4332