12.3.2008: Meldung: Carmanah Technologies Corp.: Financial Results for 2008

For Immediate Release:
TUESDAY, March 11, 2008
(No. 2008-03 #07)

CARMANAH ANNOUNCES FINANCIAL RESULTS FOR 2008

VICTORIA, BC, CANADA - (March 11, 2008) - Carmanah Technologies
Corporation (TSX: CMH) today announced its financial results for the
years ended December 31, 2007 and 2006.

Highlights for 2007

- Sales of $59.0 million for 2007, down 5.1% from $62.2 million in
2006
- Gross margin of 26.4% for 2007, down from 32.6% in 2006
- Net loss of ($8.9) million for 2007 compared to ($0.4) million in
2006
- EBITA of ($9.6) million for 2007 compared to $1.6 million in 2006
- Positive cash flow from operations of $2.0 million, compared to a
negative operating cash flow in 2006 of ($8.4) million
- Ended the year with net cash of $4.1 million

Summary of Q4 2007

- Sales of $13.0 million for the quarter, compared with $16.2 million
in same period in 2006
- Gross margin of 18.8% for the quarter, down from 28.2% in same
period in 2006
- Net loss of ($4.6) million for the quarter, compared to ($0.8)
million in same period in 2006
- EBITA of ($4.6) million for the quarter, compared to ($0.4) million
in same period in 2006
- Positive cash flow from operations of $2.1 million in the quarter,
compared to a negative operating cash flow in 2006 of ($3.8) million
- Ended the quarter with net cash of $4.1 million

To view full financials, please visit:
www.carmanah.com/content/investors/financialreports.aspx.

EXECUTIVE OVERVIEW

According to Ted Lattimore, Carmanah"s new CEO, 2007 was a year of
transition, replete with challenges that helped the company assess
its strengths, and sharpen its focus for a more disciplined and
profitable year ahead. "Over the past few months we"ve implemented
some very positive changes: we"ve narrowed our focus, streamlined
processes, controlled costs, and eliminated bank debt. As part of a
comprehensive 100-day planning process, we"ve identified where we
want to be, and developed the strategy to get us there," said
Lattimore. "Despite some initial inventory challenges, and the
pressures from a significant increase in the Canadian dollar
throughout the year, we"ve strengthened our financial position,
improved cost and working capital management, and made progress
toward a return to profitability," said Lattimore. "I believe Q4 2007
marks a turning point for Carmanah - a point from which we can review
how far we"ve come, learn from the challenges of the past, and build
a strategy to guide us to the next level," added Lattimore. "In Q4
2007, our new executive team performed a detailed review of our
strategic direction, and developed a strategy that realigns our
market verticals, and re-focuses our attention on those activities
that are key to the company"s long-term success. I am very confident
in the direction we have charted, and in our ability to reach our
goals in 2008 and beyond."

Roland Sartorius, Carmanah CFO, described some of the hurdles the
company faced in 2007, a year that mainly combined unfavorable
foreign exchanges rates and surplus inventory challenges, to result
in an $8.9 million net loss for the year. "We"ve effectively
addressed these matters, and fortunately, a large part of this loss
was attributable to items that are not expected to reoccur,"
explained Sartorius. "On the matter of foreign exchange, the
strengthening Canadian dollar during the year impacted net pre-tax
income by approximately $5.5 million. We estimate our top-line
revenue was reduced by about $4.0 million as a significant amount of
our sales are denominated in US dollars. We also incurred about $1.5
million in foreign exchange losses on our foreign denominated working
capital. At the end of 2006, we had also built up a significant
amount of inventory in anticipation of sales growth and expected
shortages for raw materials (such as solar panels) which subsequently
did not occur. To clear this excess inventory and reduce our non-cash
working capital, we provided higher discounts on a variety of our
products during the year which ultimately contributed to our overall
lower margins. We also incurred one-time inventory write downs and
adjustments, so that we could put the surplus inventory issue behind
us," explained Sartorius. "Finally at year end, we wrote off $2.0
million of goodwill associated with our 2003 acquisition of AVVA
Technologies Inc. The write down was primarily the result of changes
in our overall strategic direction. Overall, we"ve been very
successful in addressing each challenge, ending the year with a
strong balance sheet, and creating a solid platform for an exciting
future of steady, strategic growth," added Sartorius.

BALANCE SHEET HIGHTLIGHTS

Net cash, cash equivalents, and short-term investments at December
31, 2007 were $4,1 million, compared to $2.3 million at December 31,
2006, while net working capital was $19.1 million (current ratio of
3.4:1) at December 31, 2007 compared with $26.7 million (current
ratio of 3.5:1) at December 31, 2006. Credit facilities with the
Royal Bank of Canada includes demand operating loans in the amount of
$8.5 million and other credit facilities consisting of term loans and
lease lines of credit in the amount of $4.0 million. The term loans
are available once certain covenant targets are achieved. Nil was
drawn at these facilities as at December 31, 2007, compared to $1.9
million drawn at December 31, 2006.

OVERVIEW OF OPERATIONS

Carmanah designs, manufactures and distributes a range of energy
efficient and renewable-energy technology. A recent strategic review
has resulted in the company being structured around two business
segments intended to help define the optimal structure for the
company going forward:

- STRATEGIC: includes the primary business units of LED lights and
beacons and solar power systems for industrial and grid-tie
applications. These units will be the main focus of the company going
forward over the long term.

- TACTICAL: includes business units such as energy-efficient LED
edge-lit signage and solar component distribution. These units are
important today and are generally stand-alone growth opportunities.

This optimal go-forward business strategy is expected to emphasize
the company"s key revenue-producing activities while accommodating
other complementary profitable opportunities within the company"s
three technology groups: solar-powered LED lighting, solar power
systems and LED-illuminated signage.

The Solar LED Lighting Group provides a variety of energy-efficient
LED lighting products for marine, aviation, transit, roadway and
industrial worksite applications. The Solar Power Systems Group
offers a wide range of renewable energy system solutions for
industrial, residential and recreational power applications. The LED
Sign Group designs and manufactures energy-efficient LED edge-lit
signs for corporate identity, point of purchase and architectural
applications. Carmanah"s headquarters and primary manufacturing and
distribution facilities continue to be located in Victoria, British
Columbia, Canada, with additional manufacturing and distribution
facilities in Calgary, Alberta, Canada, as well as regional
distribution and sub-assembly facilities in Santa Cruz, California.

RESULTS OF OPERATIONS

Sales

Carmanah"s sales for the year ended December 31, 2007 were $59.0
million, down $3.2 million from 2006. A summary of revenues from each
of Carmanah"s technology groups follows:

----------

Sales by Group
($ thousands) Three Months Ended December 31,
2007 2006

Solar LED Lighting $ 7,136 $ 6,786
Solar Power Systems 5,045 8,147
LED Sign Group 833 1,289
TOTAL $13,014 $16,222

Year Ended December 31,
2007 2006

Solar LED Lighting $27,457 $26,861
Solar Power Systems 27,346 30,905
LED Sign Group 4,206 4,417
TOTAL $59,009 $62,183

----------

- SOLAR LED LIGHTING GROUP: Sales were $27.5 million in 2007, up $0.6
million over 2006. Overall sales growth was negatively impacted by
the decision to exit the customized transit market. In total, transit
sales were $4.9 million in 2007, down from $6.2 million in 2006. The
decision to exit the custom transit business was due to the fact that
the majority of sales required significant modifications for each
customer. As a result, the necessary economies of scale could not be
obtained to provide sufficient margins to justify maintaining its
current product offering in this business. In the future, the transit
customers" needs will be fulfilled with a General Illumination
portfolio that is suitable for transit shelters and other remote
situations. Estimated negative foreign exchange impact on sales for
this group was $1.8 million

- SOLAR POWER SYSTEMS GROUP: Sales were $27.3 million in 2007, down
$3.6 million over 2006. This decrease is mainly due to lower sales in
the fourth quarter as a result of (1) restructuring within the
company"s US distribution which involved replacing key sales staff,
which resulted in a $4.5 million drop in sales and (2) the sale of
the home power vertical which reduced sales by approximately $0.4
million in the fourth quarter. In total, Home power sales represented
approximately $4.2 million of sales in 2007. In 2008, the majority of
these sales are expected to disappear. Estimated negative foreign
exchange impact on sales for this group was $2.0 million.

- LED SIGN GROUP: Sales were $4.2 million in 2007, which is fairly
comparable to $4.4 million recorded in 2006. Sales growth in this
market is expected to come from (1) new technologies, such as
EVENLIT(tm), which are being integrated into the product offering,
and (2) expansion into new geographic markets. Estimated negative
foreign exchange impact on sales for this group was $0.2 million.

Gross Profit and Margin

Gross profit was $15.6 million for the year, down from $20.3 million
in 2006. Overall margins decreased to 26.4% in 2007 from 32.6% in
2006. Gross margins were negatively impacted as a result of lower
sales due to the significant 2007 decline in the US dollar, estimated
to be approximately $4.0 million, as well as approximately $1.2
million of one-time inventory write downs. Other factors that
impacted gross margins are outlined below:

- Within the Solar LED group, there was a change in the sales mix
towards lower margin products. The majority of the change in mix came
from a shift in product sales from Aviation to Roadways. Sales of
higher margin Aviation products were $1.4 million lower in 2007 than
in 2006 due to delayed contracts. These reduced aviation market sales
were made up by a $2.0 million increase in 2007 sales of lower margin
Roadway products.

- Within the Solar Power Systems group, there was a fair amount of
discounting certain products in an effort to reduce the surplus
inventory that was purchased in late 2006.

Operating expenses

Operating expenses in 2007 totaled $23.1 million, $3.0 million or 15%
higher than $20.1 million incurred in 2006. As a percentage of sales,
operating costs have increased to 39% in 2007 from 32% in 2006. The
majority of this increase was incurred in the first half of 2007,
when spending was based upon expected sales growth which did not
occur. Operating costs peaked in Q2 2007 at $6.7 million and then
significantly declined in the latter half of the year as the new
executive team implemented cost-cutting measures.

- Sales and marketing expenses increased by $0.8 million primarily
due to additional marketing staff and higher expenditures on samples
and shipping, tradeshows, travel and advertising in the first half of
2007. These increases were partially offset by reduced commissions
expense due to lower sales. As a percentage of sales, sales and
marketing expenditures grew from 13% in 2006 to 15% in 2007.

- Research, Development, and Engineering expenses for the year were
$2.8 million, net of SR&ED investment tax credits, up $0.6 million
from 2006 levels. The increase is attributable to lower SR&ED
investment tax credits in 2007, as a significant amount of
engineering time and resources was allocated to streamlining and
implementing lean manufacturing processes. Actual gross expenditures
were fairly comparable year over year with $3.4 million in 2007
versus $3.5 million in 2006. As a percentage of sales, net research,
development, and engineering expenses were 4.8% compared with 3.6%
for 2006.

- General and administrative expenses for 2007 totaled $10.1 million
compared with $8.5 million in 2006. This 19% increase was due to
additional administrative and finance staff levels, non-recurring
executive recruiting costs, additional provisions for bad debts, and
higher information systems costs due to general expansion. As a
percentage of sales, general and administrative costs increased to
17% compared with 14% in 2006.

- Amortization expense of $1.1 million for 2007 is comparable to 2006.

Other Expenses

Net non-operating expenses were ($3.3) million in 2007 versus a net
non-operating income of $0.4 million in 2006. A $2.0 million write
down of goodwill was incurred in the fourth quarter as a result of an
annual impairment analysis. The impaired goodwill related to the 2003
acquisition of AVVA Technologies Inc, now a part of the LED Signs
group. Of the $3.1 million of goodwill acquired, $2.0 million was
deemed impaired due to a change in overall strategic direction which
now considers this group tactical versus strategic. A $0.3 million
gain was recorded on the sale of certain assets related to its
residential vertical within the Solar Power Systems group. The assets
disposed of primarily related to inventory, customer lists, and
equipment. Significant foreign exchange losses of $1.5 million were
incurred during 2007. This compares with a gain of $0.3 million
during 2006. This is primarily due to the significant decline of the
US dollar relative to the Canadian dollar which has negatively
affected the value of the company"s US dollar-denominated working
capital as a significant portion of sales and purchases are
denominated in the US dollar.

Income Tax

Income tax recovery for the year ended December 31, 2007 was $1.9
million. This amount consists of a current tax recovery of $0.3
million plus future income tax recovery of $1.6 million. The
difference relative to the statutory tax rate is primarily due to
non-deductible stock-based compensation and the write down of
goodwill. The future income tax recovery of $1.6 million reflects the
increase in net future tax assets resulting primarily from increased
loss carry forwards. Cash taxes for 2007 were approximately $0.1
million and relate to U.S. operations.

Earnings

Non-GAAP measures - certain non-GAAP measures are used to assist in
assessing 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
earnings before interest, taxes and amortization (EBITA). EBITA for
2007 was ($9.6) million compared to $1.6 million in 2006.

----------

EBITA Reconciliation
Ended December 31 Three Months Year Ended
($ thousands) 2007 2006 2007 2006

Net earnings – as reported $(4,635) $ (802) $(8,914) $ (365)
Add back (deduct):
Interest Income (25) (6) 91 (167)
Income taxes (270) 54 (1,923) 951
Amortization 287 354 1,151 1,144
EBITA $(4,643) $ (400) $(9,595) $ 1,563

----------

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 and equipment, and LED illuminated signage. From
its global headquarters in Victoria, British Columbia, Canada,
Carmanah oversees a network of branch offices and sales
representatives around the world.

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

"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
[email protected]

Media:
Public Relations - David Davies
Tel: +1.250.382.4332
[email protected]


Should you have any questions or comments, please contact Investor
Relations at 1.877.722.8877 or by e-mail at [email protected].
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