Carmanah Announces Record Revenue and Profit for 2002

March 10, 2003
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Vancouver, BC, Canada – (October 21, 2004) – Carmanah Technologies Corporation (TSX VE: CMH; Berlin and Frankfurt Stock Exchanges: QCX), Victoria, British Columbia, Canada – March 10, 2003 – Carmanah Technologies Corporation (TSX VE: CMH) is pleased to announce its audited results for the years ended December 31, 2002 and 2001.

Highlights for 2002:

  • Annual revenue up 91% over 2001 to $6,468,899
  • Net profit of $36,393, as compared to net loss in 2001 of $676,498
  • Q4 revenue of $1.94 million up 127% over Q4 2001
  • Q4 revenue up $309,000 (19%) over Q3 2002
  • Average gross profit margin of 56%, up from 53% in 2001
  • Revenue growth (91%) outpaced expenditure growth (46%)
  • Aggressive investment in both R&D and business development for new markets continued

“Our company has made great strides over the past twelve months, as we continue to expand into many new market sectors”, stated Art Aylesworth, Carmanah’s CEO. “In 2002, we introduced new products into the global public transportation market, the North American railway market and the European roadway market. While continuing to increase our international sales in marine products, we are moving as quickly as we can to meet the worldwide demand for our core technology in a growing number of markets. I am proud of the job our team has done in growing the business aggressively while still managing our bottom line during this ‘ramp up’ year. 2002 was the most impressive year in Carmanah’s history and should provide a strong platform upon which we will build our future”.


Carmanah’s total revenues for the 12 months ended December 31, 2002 increased 91% to $6,468,899 compared with $3,373,453 for the preceding year. Revenues were derived from the sale of solar powered light-emitting diode hazard and safety lights. Sales were sourced through a worldwide distribution network and direct sales efforts in key market segments and territories. Revenue growth was achieved through increased investment in direct sales and marketing resources and activities. Sales increased throughout the company’s existing product lines and through the introduction of several new products.

Carmanah’s gross profit margin increased to 56% of sales, a 3% increase over previous year’s 53% gross profit margin. This increase was the result of an aggressive direct sales program. Products sold via direct sales methods were priced at retail, rather than at the wholesale pricing extended to distributors. Direct sales comprised 43% of total sales in fiscal 2002, compared with 22% in fiscal 2001.

Wages and benefits expense represents the Sales and Marketing, Operations and Finance departments. For the year ended December 31, 2002, wages and benefits increased 34% to $1,517,416, compared with $1,135,033 in 2001. This increase was the result of the implementation of a direct sales commission plan in 2002, as well as increase in new hires. Carmanah had 47 Full-Time Equivalent’s (FTE’s) in fiscal 2002, compared with 31 FTE’s in 2001.

Office and administration expenses in 2002 were $684,531, representing a 27% increase over 2001 at $539,360. During the 2002 year, the company moved its sales, operations, and engineering departments into an adjacent building, resulting in increased rent, utilities and general office costs. Given the sales growth experienced in 2002 however, the total office and administration expenses in 2002 were minimal; office and administration represented only 11% of total sales in 2002, as compared to 16% in 2001.

During 2002, research and development expenses of $543,051 represented a 100% increase over the previous year’s $271,485. However, the company did not defer any of its research and development expenses in 2002, whereas it deferred $231,202 in 2001. This adjustment explains the significant increase R&D expenses for 2002.

Sales and marketing expenses in 2002 were $533,041, representing a 166% increase over 2001 at $200,705. The company continued to increase sales and marketing activities for new and existing product lines throughout its worldwide marketplace. Focus was also placed on new market introduction as well as key trade shows and customer contact.

Net income (loss) for 2002 before income tax, depreciation and amortization (EBITDA) was $384,393, compared with ($335,652) for 2001. The 2002 EBITDA was primarily the result of increased sales, improved gross margins and lowered operating costs as a percentage of sales.

Carmanah’s cash balance at December 31, 2002 was $679,100, compared to $1,060,817 at December 31, 2001. Net cash usage from operations and investing activities for the year was $725,281. Financing for the company’s operations was funded primarily from the reserves of original funds raised in the 2001 reverse takeover and a private placement during 2002 in the amount of $237,600. Net working capital at year end for 2002 was $2,006,148, with a current ratio of 2.7:1 and $104,705 of non-current debt obligations.

The overall performance of Carmanah for 2002 was consistent with the objectives setout in the company’s business plan. Carmanah’s revenue growth (91%) outpaced expenditures (46%), resulting in a net profit for 2002 in the amount of $36,393 – without any capitalization of development costs. The company’s performance confirms that the planned investment in 2001 in areas of development, sales, marketing, and infrastructure supported its ability to meet 2002 objectives.

About Carmanah Technologies Inc.

Carmanah is an award winning alternative energy manufacturer specializing in patented solar-powered LED lighting solutions for the marine, transit, roadway, railway, aviation and mining markets. The company has more than 50,000 units installed in 110 countries. The shares of Carmanah Technologies Corporation (parent company) are publicly traded on the TSX Venture Exchange under the symbol “CMH” and on the Berlin and Frankfurt Stock Exchanges under the symbol “QCX”. For more information, please visit

On Behalf of the Board of Directors

Carmanah Technologies Corporation

Praveen Varshney, Director

For further information, please contact:

Corporate Contacts:

Mr. Praveen Varshney, Director

Tel: (604)629-0264

Toll-Free: 1-866-629-0264

Media Contact:Mr. David Davies

Harbourwerks Communications

Tel: (250)382-4332

Investor Relations Contact:

Vanguard Shareholder Solutions

Tel: (604) 608-0824

Toll-Free: 1-800-567-6223

This release contains forward-looking statements within the meaning of the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties are described under the caption “Note Regarding Forward-looking Statements” and “Key Information – Risk Factors” and elsewhere in our Annual Report for the fiscal year ended December 31, 2001, as filed with the U.S. Securities and Exchange Commission and which are incorporated herein by reference. These risks and uncertainties are also described under the caption “Risk Factors” in our Annual Information Form dated December 31, 2001, as filed with the British Columbia Securities Commission and which are incorporated herein by reference. We do not assume any obligation to update the forward-looking information contained in this press release.


Consolidated Balance Sheets

(Expressed in Canadian dollars)

December 31, 2002 and 2001

    2002 2001
Current assets:
Cash and cash equivalents $ 679,100 $ 1,060,817
Accounts receivable 1,366,780 382,846
Inventories 1,057,666 587,439
Prepaid expenses and deposits 43,513 26,777
Current portion of
  advances receivable
26,844 49,472
3,173,903 2,107,351
Advances receivable 111,500 111,500
Deferred development costs 216,895
Equipment and leasehold improvements 471,079 279,873
Patents 34,154 29,487
$ 3,790,636 $ 2,745,106
Liabilities and Shareholders’ Equity
Current liabilities:
Accounts payable and
  accrued liabilities
947,014 340,876
Bank loan 140,000 30,000
Deferred revenue 11,042
Current portion of
  long-term debt
21,684 27,790
Current portion of obligations under capital lease 48,015 25,800
Future income taxes 18,000
1,167,755 442,466
Long-term debt 55,139 17,143
Obligations under capital leases 49,566 30,304
1,272,460 489,913
Shareholders’ equity:
Share capital 3,256,336 3,029,746
Contributed surplus 26,188 26,188
Deficit (764,348) (800,741)
2,518,176 2,255,193
$ 3,790,636 $ 2,745,106


Consolidated Statements of Operations and Deficit

(Expressed in Canadian dollars)

Years ended December 31, 2002 and 2001

    2002 2001
Sales $ 6,468,899 $ 3,373,453
Cost of Sales 2,808,745 1,549,306
3,660,154 1,824,147
Operating Expenses:
Wages and benefits 1,517,416 1,135,033
Office and administration 684,531 539,360
Research and development 543,051 271,485
Sales and marketing 533,041 200,705
Bank charges and interest 49,086 38,912
Amoritization of:
   Equipment and leasehold improvements 140,014 111,129
   Deferred development costs 216,895 217,588
   Patents and other intangible assets 9,091 12,129
$ 3,693,125 $ 2,526,341
Operating loss (32,971) (702,194)
Interest and other income 51,364 25,696
Earnings (loss) before income taxes 18,393 (676,498)
Income tax expense (recovery):
Future (18,000)
Net earnings (loss) 36,393 (676,498)
Deficit, beginning of year (764,348) (800,741)
Deficit, end of year (764,348) (800,741)
Earning (loss) per share –
   basic and diluted
$ 0.00 $ (0.04)
Weighted average number
   of shares outstanding
19,650,884 15,460,951