Vancouver, BC, Canada – (October 21, 2004) – Carmanah Technologies Corporation (TSX VE: CMH; Berlin and Frankfurt Stock Exchanges: QCX), is pleased to announce its third quarter results for the three months ended September 30, 2002. Highlights for the quarter are as follows:
- Revenue up 81% over Q3 2001 to $1,632,523;
- Profit of $43,472 for the quarter, as compared to net loss of $84,889 for Q3 2001;
- Gross profit for the quarter reached a record 59% as direct sales increase;
- Earnings before income tax, depreciation and amortization (EBITDA) was $146,389;
- Revenue growth (81%) outpaced expenditures (61%);
- Investment into developing new markets continued.
“This has been an exciting year for our company,” stated Art Aylesworth, Carmanah’s CEO. “Several key developments have come together to put our products at the forefront of the rising market for solar-powered LED lighting.”
Carmanah’s continued success is due to both the ongoing popularity of its marine navigation lights as well as the spread of its core proprietary solar-powered LED technology to new markets and applications. Key developments in the third quarter include:
- In August, Carmanah’s 700 Series lights became the first solar-powered LED-based marine lights to be officially approved by the U.S. Coast Guard (USCG) for use in the U.S. Aids-to-Navigation System, an approval process that took three years. This approval has international implications, as other regulatory bodies often follow the lead of the USCG.
- In September, Carmanah was designated a U.S. Federal Supply Contractor. Carmanah now supplies lights directly to the U.S. federal government as a pre-approved supplier, without a bidding process. In the first month of becoming a Federal Supply Contractor, the USCG purchased US $180,000 worth of lights from Carmanah.
- Major inroads have been made into the railway market with both solar-powered LED hazard lighting as well as bridge markers. Sales into the railway market accounted for approximately 18% of Carmanah’s revenues in the third quarter.
SUMMARY OF RESULTS FOR 2002
3 Months Ended September 30
Carmanah recorded a record $1,632,523 in revenues. This was an 81% increase of $733,107 over the same period in 2001.
Direct cost of goods totaled $664,427, as compared to $444,177 for the three months ended September 30, 2001. Total operational expenses were $928,529, a 61% increase over the $577,686 in the same period in 2001.
Gross profit as a percentage of sales reached a record 59%. Net income was $43,472 as compared to a net loss of $84,889 for the same period in 2001.
9 Months Ended September 30
Carmanah recorded a record $4,527,850 in revenues for the nine-month period. This was an increase of 79% over the same period in 2001. Revenue growth was achieved through (i) the continued growth of marine sales in existing product lines; (ii) expansion into the railway and mining markets with existing products; and (iii) expansion into the transportation and transit markets with entirely new products. Unit sales increased from 10,879 units sold and delivered for the first nine months of 2001 to 15,981 for the first nine months of 2002.
Direct cost of goods totaled $1,913,786 as compared to $1,184,030 for the nine months ended September 30, 2001. Gross profit as a percentage of sales was 58% as compared to 53% during the same period in 2001. This increase is a result of the Company’s movement towards more direct selling through dedicated sales staff and an aggressive e-commerce program. EBITDA for the nine-month period was $345,605.
Total operational expenses were $2,620,847 as compared to $1,637,108 for the same period in 2001. This increase is attributed to the increased staff and administrative expenses necessary to support the Company’s expansion into new products and new markets. As a percentage of sales, the operating expenses are down to 58%, as compared to 65% for the same period in 2001. Increasing investment is being made into markets that will be primary sources of revenues in the months and years to come.
Net income was $49,729 as compared to a net loss of $300,652 for the same period in 2001. The overall increase in net income is a result of an increase in sales.
Net working capital as at September 30, 2002 was $2,018,539 (current ratio of 5.75:1) as compared to $1,664,885 (current ratio of 4.76:1) as at December 31, 2001. The cash balance was $617,912 at quarter end as compared to $1,060,817 as at December 31, 2001. The decrease was primarily attributable to an increase in inventory levels.
The Company’s non-current liabilities at September 30, 2002 totalled $52,127 and subsequent to quarter end, the operating credit facility was increased from $200,000 to $300,000.
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 and railway markets. To-date, the company has more than 45,000 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 further information, please visit www.carmanah.com.
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.
CARMANAH TECHNOLOGIES CORPORATION
Consolidated Interim Balance Sheets
September 30, 2002 and December 31, 2001
(Unaudited – Prepared by Management)
| September 30, | December 31, | ||
| 2002 | 2001 | ||
| (unaudited) | (audited) | ||
| Assets | |||
| Current assets: | |||
| Cash and cash equivalents | $ 617,912 | $ 1,060,817 | |
| Accounts receivable | 993,185 | 358,958 | |
| Taxes recoverable | 13,862 | 23,888 | |
| Prepaid expenses and deposits | 37,082 | 26,777 | |
| Inventories | 751,012 | 587,439 | |
| Current portion of advances receivable |
30,014 | 49,472 | |
| 2,443,067 | 2,107,351 | ||
| Advances receivable | 111,500 | 111,500 | |
| Capital assets | 379,132 | 279,873 | |
| Deferred development costs | 50,021 | 216,895 | |
| Patents and other intangibles | 35,457 | 29,487 | |
| $ 3,019,177 | $ 2,745,106 | ||
| Liabilities and Shareholders’ Equity | |||
| Current liabilities: | |||
| Accounts payable and accrued liabilities |
362,615 | 340,876 | |
| Due to related parities | 2,140 | – | |
| Bank loan | 30,000 | 30,000 | |
| Current portion of long-term debt |
5,402 | 27,790 | |
| Current portion of obligations under capital lease | 6,371 | 25,800 | |
| Current portion of future income taxes |
18,000 | 18,000 | |
| 424,528 | 442,466 | ||
| Long-term debt | 21,823 | 17,143 | |
| Obligations under capital lease | 30,304 | 30,304 | |
| Shareholders’ equity: | |||
| Share capital | 3,267,346 | 3,029,746 | |
| Contributed surplus | 26,188 | 26,188 | |
| Deficit | (751,012) | (800,741) | |
| 2,542,522 | 2,255,193 | ||
| $ 3,019,177 | $ 2,745,106 | ||
CARMANAH TECHNOLOGIES CORPORATION
Consolidated Interim Statements of Operations and Deficit
For the nine months ended Septemper 30, 2002 and 2001
(Unaudited – Prepared by Management)
| 3 months ended | 9 months ended | ||||
| September | September | ||||
| 2002 | 2001 | 2002 | 2001 | ||
| Revenues | 1,632,523 | 899,416 | 4,527,850 | 2,528,399 | |
| Cost of goods sold | 664,427 | 444,177 | 1,913,786 | 1,184,030 | |
| Gross Margin | 968,096 | 455,239 | 2,614,064 | 1,344,369 | |
| Operating expenses: | |||||
| Amortization of: | |||||
| Capital assets | 39,630 | 29,274 | 88,344 | 76,282 | |
| Deferred devel- opment costs |
55,625 | 35,060 | 166,874 | 99,629 | |
| Patents and other intang- ible assets |
2,529 | 1,802 | 6,683 | 5,550 | |
| Bank charges and interest |
5,133 | 6,371 | 33,975 | 21,954 | |
| Office and administration |
150,100 | 119,338 | 393,662 | 300,263 | |
| Research and development |
156,065 | 19,845 | 474,565 | 145,132 | |
| Sales and marketing |
136,292 | 39,755 | 417,669 | 152,241 | |
| Wages and benefits |
383,155 | 326,241 | 1,039,075 | 836,057 | |
| 928,529 | 577,686 | 2,620,847 | 1,637,108 | ||
| Operating income (loss) for the period |
39,567 | (122,447) | (6,783) | (292,739) | |
| Other income: | |||||
| Interest and other income |
3,905 | 39,277 | 56,512 | 82,291 | |
| Reverse takeover costs | — | (1,719) | — | (90,204) | |
| 3,905 | 37,558 | 56,512 | (7,913) | ||
| Income (loss) for the period | 43,472 | (84,889) | 49,729 | (300,652) | |
| Deficit, beginning of period |
(794,484) | (340,005) | (800,741) | (124,242) | |
| Deficit, end of period | (751,012) | (424,894) | (751,012) | (424,894) | |
| Earnings (loss) per share |
$0.002 | $(0.005) | $0.002 | $(0.018) | |
| Weighted average number of shares outstanding |
20,652,710 | 16,841,442 | 20,652,710 | 16,841,442 | |
CARMANAH TECHNOLOGIES CORPORATION
Consolidated Interim Statements of Cash Flows
For the nine months ended September 30, 2002 and 2001
(Unaudited – Prepared by Management)
| 3 months ended | 9 months ended | ||||
| September | September | ||||
| 2002 | 2001 | 2002 | 2001 | ||
| Cash provided by (used in): | |||||
| Operations: | |||||
| Income (loss) for the period | 43,472 | (84,889) | 49,729 | (300,652) | |
| Amortization, an item not involving cash |
97,784 | 66,135 | 261,901 | 181,461 | |
| Changes in non-cash operating working capital: |
|||||
| Accounts receivable | (349,654) | (143,832) | (634,225) | (285,176) | |
| Taxes recoverable | (3,936) | 31,930 | 10,026 | (57,979) | |
| Inventories | 82,296 | 45,630 | (163,573) | (108,538) | |
| Prepaid expenses and deposits |
(1,473) | (954) | (10,305) | (2,736) | |
| Advances receivable | 6,625 | 2,500 | 19,458 | 2,500 | |
| Accounts payable and accrued liabilities |
29,285 | (26,176) | 21,739 | 88,489 | |
| (95,601) | (109,656) | (445,250) | (482,631) | ||
| Investing: | |||||
| Cash received on the reverse takeover of Carmanah Technologies Inc. |
— | — | — | 1,768,014 | |
| Capital asset additions | (114,429) | (48,299) | (187,603) | (142,496) | |
| Deferred development costs | — | (145,771) | — | (145,771) | |
| Patents and other intangibles | (2,404) | 505 | (12,653) | (9,527) | |
| (116,833) | (193,565) | (200,256) | 1,470,220 | ||
| Financing: | |||||
| Due to related parties | 2,140 | — | 2,140 | — | |
| Shared issuance costs | — | (31,835) | 237,600 | (31,835) | |
| Bank loan | — | (20,000) | — | (50,000) | |
| Repayment of long term debt | 14,606 | 3,545 | (17,710) | (10,852) | |
| Obligations under capital leases |
(6,484) | (28,939) | (19,429) | 27,239 | |
| 10,262 | (77,229) | 202,601 | (65,448) | ||
| Increase (decrease) in cash and cash equivalents | (202,172) | (380,450) | (442,905) | 922,141 | |
| Cash and cash equivalents, beginning of period | 820,084 | 1,488,225 | 1,060,817 | 185,634 | |
| Cash and cash equivalents, end of period | 617,912 | 1,107,775 | 617,912 | 1,107,775 | |