Carmanah Reports Second Quarter 2016 Fiscal Results

August 9, 2016
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Carmanah Technologies Corporation (TSX: CMH) (“the Company” or “Carmanah”) today reported its second quarter financial results for the period ended June 30, 2016.  Currency amounts are in U.S. dollars unless otherwise noted.     

Second Quarter Revenues, Profitability and Cash Generation

In the second quarter of 2016 the Company generated revenues of $19.5 million, up $3.8 million or 24% over Q2 2015 revenues of $15.7 million.  Overall revenue growth resulted from a mix of comparative revenue improvements and declines.  Revenues resulting from the acquisition of the Sabik Group of Companies contributed $6.0 million to the revenue increase. Overall growth was also aided by the Illumination Division, which saw revenues grow by $0.7 million or 26% in the quarter on a comparative basis.  These increases were tempered by a comparative decline in the quarter from the Signals Division of $0.8 million and the Power Division of $2.1 million. 

Of these declines, the Signals Division’s Airfield Ground Lighting business was well behind its comparative quarter due to the completion of a particularly large project in the prior period.  Absent this variance, all other Signals businesses posted organic growth which averaged 18% when compared to the second quarter in 2015. The Company also had a comparative decline in its Power Division of $2.1 million.  This decline was the result of temporary On-Grid project delays beyond the Company’s control.  Revenues from these temporarily delayed projects are expected to be realized in the third and fourth quarters of 2016. 

Net income in the second quarter of 2016 was $1.3 million down from net income of $10.3 million in the second quarter of 2015. The comparative decrease in net income was attributable to the recognition of $9.9 million in tax assets in 2015.  Excluding the effect of the tax assets in 2015, second quarter net income was up $0.9 million or 69%.  Carmanah management relies on Adjusted EBITDA[1] (a non-IFRS measure) to gauge financial performance. In the second quarter of 2016, the Company generated Adjusted EBITDA of $2.7 million, or 14% of revenue, up 8% from $2.5 million, or 16% of revenue, in the same period in 2015. A table reconciling net income and Adjusted EBITDA below. 

Cash generated from operations in the second quarter of 2016 was $4.3 million up from negative $3.8 million in the second quarter of 2015.  The improvement is the result of continued profitability and the Company’s focus on cash conversion cycles. As at June 30, 2016 the Company’s cash balance was $18.9 million.

“In the second quarter, most Carmanah businesses posted attractive rates of organic growth, product margin improvement and expense management, all of which combined to produce improved profitability.” said John Simmons, Chief Executive Officer.  “At the same time, we worked hard and with discipline to improve cash conversion cycles and in doing so posted a strong increase in our cash reserves.  Our strengthening balance sheet provides us with the flexibility to consider a variety of business development investments over the coming quarters.”

Highlights for the quarter are provided below: 

Three months ended June 30,
Six months ended June 30,
(US$ thousands)
Gross margin %
Core operating expenditures [1]
Net income
Adjusted EBITDA [1]


Over the past 3-years Carmanah has endeavoured to improve all business operations while working in parallel to study markets and determine a strategy for growth and improvement in shareholder value.  The Company’s strategic plan is now set and is available for shareholders to view at

“Our vision is to be the global leader in the provision of advanced LED solutions for infrastructure and we have committed to a strategic and tactical plan to achieve this vision.” said John Simmons Chief Executive Officer.  “To reflect these plans we have revamped our Management Discussion and Analysis which now sets out our long term tactical plans and the progress we are achieving in these regards.  I invite you to read and follow this discussion as presented with each forthcoming quarterly release.”

Financial Condition at June 30, 2016 compared to December 31, 2015

  • Cash and cash equivalents of USD $18.9 million, up USD $4.0 million from USD $14.9 million
  • Working capital of USD $33.9 million, up USD $5.6 million from USD $28.3 million

Complete set of Financial Statements and Management Discussion & Analysis

A complete set of the second quarter ended June 30, 2016 Financial Statements and Management’s Discussion & Analysis are available on Carmanah’s corporate website. To view these documents, visit: Both documents are also filed on SEDAR (  The financial information included in this release is qualified in its entirety and should be read together with the unaudited condensed consolidated financial statements for the quarter ended June 30, 2016 and the audited consolidated financials for the year ended December 31, 2015, including the notes thereto.       

EBITDA and Adjusted EBITDA

EBITDA reconciliations
Three months ended June 30,
Six months ended June 30,
(US$ in thousands)
Net income
  Income taxes
  Non-cash stock based compensation
  Merger and acquisition costs
  Investment tax credits
  Foreign exchange (gain)/loss
  Extraordinary legal costs
  Restructuring and asset write offs
Adjusted EBITDA [1]


About Carmanah Technologies Corporation

Carmanah designs, develops and distributes a portfolio of products focused on energy optimized LED solutions for infrastructure. Since 1996, we have earned a global reputation for delivering durable, dependable, efficient and cost-effective solutions for industrial applications that perform in some of the world’s harshest environments. We manage our business within three reportable segments: Signals, Illumination and Power. The Signals segment includes serves the Airfield Ground Lighting, Aviation Obstruction, Offshore Wind, Marine and Traffic markets.  The Illumination segment provides solar powered LED outdoor lights for municipal and commercial customers. The Power segment serves both On-Grid and Off-Grid verticals.


Carmanah Technologies Corporation:
Evan Brown, (250) 380-0052
Chief Financial Officer/Corporate Secretary

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,” “estimates,” “could,” “will” or variations of such words and phrases. Forward-looking statements or information in this news release relate to, among other things: revenues, and revenue growth, for the fourth quarter and year ended December 31, 2015; order backlogs; gross margins and estimates of EBITDA and Adjusted EBITDA. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of Carmanah or Sabik to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Such factors include, but are not limited to: our ability to become a worldwide leader in the marine aids to navigation industry, the potential growth of the off shore wind safety market or our ability to participate in any growth and other general uncertainties that may impact actual outcomes. These forward-looking statements are based on management’s current expectations and beliefs but given the uncertainties, assumptions and risks, readers are cautioned not to place undue reliance on such forward-looking statements or information. Carmanah disclaims any obligation to update, or to publicly announce, any such statements, events or developments except as required by law.

 For additional information on these risks and uncertainties, see Carmanah’s most recently filed Annual Information Form (AIF) and Annual MD&A, which are available on SEDAR at and on the Company’s website at The risk factors identified in Carmanah’s AIF and MD&A are not intended to represent a complete list of factors that could affect Carmanah.

[1] NON-GAAP FINANCIAL MEASURES: EBITDA and Adjusted EBITDA. This news release presents information about EBITDA and Adjusted EBITDA, both of which are non-IFRS financial measures, to provide supplementary information about 2016 operating performance.  Carmanah defines EBITDA as net income or loss before interest, income taxes, amortization, and non-cash stock based compensation.  Adjusted EBITDA removes unusual or non-operating items from EBITDA, such merger and acquisition costs, restructuring charges, asset write offs, and foreign exchange gains and losses.  Carmanah uses these non-IFRS measures internally to make strategic decisions, forecast future results and evaluate its performance.  EBITDA and Adjusted EBITDA are not intended as a substitute for IFRS measures.  A limitation of utilizing these non-IFRS measures is that the IFRS accounting effects of the non-recurring items do in fact reflect the underlying financial results of Carmanah’s business and these effects should not be ignored in evaluating and analyzing Carmanah’s financial results. Therefore, management believes that Carmanah’s IFRS measures of net loss and the same respective non-IFRS measure should be considered together. Non-IFRS measures do not have any standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Readers should refer to the “Definitions and Reconciliations” section of the Company’s most recently filed MD&A for three-month and six-month periods ended June 30th, 2016 for a more detailed discussion of these measures and their calculation.