Victoria, BC, Canada – (November 12, 2009) – Carmanah Technologies Corporation (TSX: CMH) today announced its third quarter financial results for the three-month period ending September 2009. (All amounts are in US dollars.)
Highlights for the Quarter
- Revenues: $9.5 million, down from $12.2 million for the same period in 2008
- Signal & Illumination Revenues: $5.4 million, down from $6.9 million for the same period in 2008
- Gross margin: 33%, down from 38% in 2008
- Operating expenses before restructuring: $3.2 million, down from $4.1 million for the same period in 2008
- Net income: $1.2 million, up from $0.7 million in 2008
- Adjusted EBITDA: $1.4 million, up from $1.2 million in 2008
- Cash flow from operations: $1.7 million, up from negative cash flow of $0.9 million in 2008
- Cash balance: $8.9 million as at September 30, 2009, up rom $4.1 million at the same period in 2008
- Nil debt: Continued debt-free operation
Summary of Results
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, while the introduction of several new products including the restyled EverGEN 1710 light presents new opportunities. An initiative to realign its reporting segments will see the categories previously referred to as “Strategic” and “Tactical,” be referred to as “Signals & Illumination” (including solar-powered beacons for marine, aviation & industrial applications and solar powered area lighting) and “Systems & Other ” (including mobile power systems, off grid and grid tie solar power systems). Also, effective this quarter, the company has changed the reporting currency of its financial information from Canadian dollars to US dollars. This action, previously communicated in the company’s second quarter report, better reflects the profile of its revenue and net profit, which are now primarily generated in US dollars.
“As the next step in our company’s evolution, we celebrated some significant milestones this quarter, with the launch of some exciting new products including the M650 and A650 signal lights, and of course the EverGEN 1710,” said Ted Lattimore, Carmanah CEO. “We also saw some significant applications of our lighting technology at facilities such as SONGS and NASA. Looking ahead, our priorities remain: focus on our strengths, keep costs low, and continue to offer the high quality, cost-effective solar technology.”
“We feel that reporting in US dollars will better reflect our business activities, mirror our transactional functional currency and improve financial statement users’ ability to compare our financial results,” said Roland Sartorius, CFO, Carmanah Technologies.” As our business has evolved in recent years, so have the currencies in which we primarily transact our business. Our pricing, manufacturing, and most of our expenses are in US dollars, so reporting is US dollars makes good sense. Although this quarter was a challenging one, Carmanah continues to have zero debt, cash in the bank, loyal customers, and some of the brightest and most innovative solar lighting products out there. Moving forward we’ll continue to control costs and deliver the technology that today’s lighting market needs.”
Sales
Sales for the third quarter of 2009 were USD $9.5 million, down approximately USD $2.7 million from the same period in 2008. The overall decline in sales, both for the three-months ended and nine-months ended September 30, 2009, was again due in part to lower System & Other revenues caused by exiting various low margin product lines. A summary of revenues from each of the company’s Signals & Illumination and “Systems & Other” business segments is displayed below:
| Sales Summary | For the three months ended September 30 | |||||
|---|---|---|---|---|---|---|
| 2009 | 2008 | Change | ||||
| (US$ thousands) | $ | Mix | $ | Mix | $ | % |
| Total Revenue | 9,495 | 12,170 | (2,675) | 22% | ||
| Signals & Illumination | ||||||
| Solar LED Lights | 4,354 | 46% | 6,800 | 56% | (2,446) | 36% |
| Solar Power Systems | 1,042 | 11% | 131 | 1% | 911 | 695% |
| Total Signals & Illumination | 5,396 | 57% | 6,931 | 57% | (1,535) | 22% |
| Systems & Other | ||||||
| Solar Power Systems and Grid-Tie | 4,099 | 43% | 2,248 | 18% | 1,851 | 82% |
| Other | – | 0% | 2,991 | 25% | (2,991) | 100% |
| Total Systems & Other | 4,099 | 43% | 5,239 | 43% | (1,140) | 22% |
Summary of EBITDA and Net Income
- Adjusted EBITDA for Q3 2009 was $1.4 million.
- Net income: $1.2 million.
Non-GAAP Measures
The company uses certain non-GAAP measures to assist in assessing its financial performance. Non-GAAP measures do not have any standardized meaning prescribed by GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. One such non-GAAP measure used for assessing financial performance is net income (loss) before interest, income taxes, amortization, and restructuring charge (“Adjusted EBITDA”).
| Adjusted EBITA Reconciliation | For the three months ended | |
|---|---|---|
| ($ thousands) | September 30, 2009 | September 30, 2008 |
| Adjusted EBITA | $ 1,418 | $ 1,242 |
| Net income (loss) | 1,244 | 746 |
| Add/(deduct): | ||
| Interest | (121) | (13) |
| Income taxes | (11) | 40 |
| Amortization | 202 | 470 |
| Restructuring charges | – | 466 |
| Discontinued operations | 104 | (467) |
Progress During the Quarter
During this quarter, Carmanah made progress in refining and accelerating the company’s focus on its strategic direction.
- Carmanah unveiled the EverGEN 1710 solar light developed in partnership with frog design. 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 advanced motion-sensing capabilities with a range of energy saving operating profiles to ensure bright, reliable illumination whenever and wherever it’s needed. (September 10, 2009)
Other highlights during this quarter included:
- One of California’s largest state utilities, Southern California Edison (SCE) illuminated the main employee parking areas at its San Onofre Nuclear Generating Station (SONGS) EverGEN™ 1500-series solar lights (August 25, 2009)
- Carmanah divested of its LED edge-lit signs business. The Company and Dr. David Green closed on an agreement whereby Dr. Green, through his holding company, purchased Carmanah’s LED edge-lit signs business, Carmanah Signs Inc. (“CSI”). As part of the transaction, Dr. Green resigned as a member of the Carmanah Board of Directors. (August 18, 2009)
- A Tucson, Arizona-based high-tech equipment designer and manufacturer installed Carmanah 1520 solar parking lot lights as part of an initiative to reduce energy consumption (July 30, 2009)
- Carmanah introduced the M650 solar-LED marine lantern. Featuring a simple on-board programmable interface, convenient USB connection, replaceable battery pack and intelligent deployment capability, the M650 lantern provides up to four nautical miles of visibility making it ideal for lighting ports, harbours and marinas; marking obstructions and nautical hazards; or illuminating aids to navigation in all types of environments. (July 29, 2009)
- Durham College powered up with Carmanah solar technology. The College used Carmanah solar technology to help conserve energy and reduce electricity costs at its Whitby, Ontario campus. (July 21, 2009)
- NASA’s Stennis Space Center equipped a green facility with EverGEN™ 1520 solar-LED parking lot lights. The lights were installed at the Stennis Space Center’s new Cryogenics Control Center facility (July 16, 2009)
- Carmanah partnered with frog design to introduce the next generation of solar-LED area lights. Established in 1969, frog design is a global innovation firm that has pioneered some of the world’s most groundbreaking designs for trendsetting companies. (July 15, 2009)
- Carmanah introduced the A650 aviation and obstruction light. Featuring a groundbreaking user interface, replaceable battery pack, intelligent-deployment capability and up to 10 candela of intensity (steady-on), the new A650 aviation and obstruction light is ideal for taxiway and apron-edge lighting, emergency airfield and helipad lighting, airfield construction barricade lighting, and obstruction lighting. (July 8, 2009)
Complete set of Financial Statements and Management Discussion & Analysis
A complete set of Q3 2009 Financial Statements and Management’s Discussion & Analysis are available on Carmanah’s corporate website. To view full financials, visit: www.carmanah.com/Company/Investors/Financial_Reports.aspx.
About Carmanah Technologies Corporation
As one of the 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 solar LED lights and solar 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”. For more information, visit carmanah.com.
Carmanah Technologies Corporation
“Roland Sartorius”
Roland Sartorius
Chief Financial Officer
For further information, please contact:
Investors:
Investor Relations
Tel: +1.250.380.0052
Toll-Free: 1.877.722.8877
investors@carmanah.com
Media:
Public Relations: David Davies
Tel: +1.250.382.4332
ddavies@carmanah.com
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, 2008, 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.