17.3.2006: Meldung: Carmanah Technologies Corp.: results for the years ended December 31, 2005 and 2004
THURSDAY, March 16, 2006
Victoria, British Columbia, Canada - Thursday, March 16, 2006 -
Carmanah Technologies Corporation (TSX: CMH) is pleased to announce
its results for the years ended December 31, 2005 and 2004.
HIGHLIGHTS FOR THE YEAR
- Annual revenues of $38,729,885, representing a 144% increase over
- Record outstanding orders of $4,744,279 at year end
- 2005 EBITA of $1,981,573, representing a 92% increase over 2004
EBITA of $1,034,439
- 2005 earnings before tax of $1,256,608, representing a 112%
increase over 2004
- 2005 net earnings of $680,962, representing a 15% increase over
- Net working capital of $26,332,325 at year end, up from
$11,759,089 at the end of 2004
Download financial results:
SUMMARY OF RESULTS
2005 was a year of substantial growth for Carmanah. Organically, the
Company continued the historical trend of rapid global expansion in
its targeted solar LED lighting and LED-illuminated signage markets,
achieving 2005 revenues of $23,149,422, an increase of 46% over 2004.
In July of 2005, Carmanah also entered the much larger solar power
systems market through the acquisition of Soltek Powersource Ltd.
("Soltek"), the largest Canadian supplier of proprietary solar power
systems and solar power equipment. Combined, Carmanah achieved
overall 2005 revenues of $38,729,885, a record increase of 144% over
"Even with the challenges, distractions and additional work of a
large integration, 2005 proved to be a great year for Carmanah,"
states Art Aylesworth, Carmanah"s CEO. "The Company continued to
show organic growth and fiscal discipline while dramatically
expanding its size and scope. Carmanah remains a standout in the
solar power industry as it grows rapidly, yet profitably."
"We are pleased with the results to-date and excited about the
prospects for our future," states Aylesworth. "Carmanah has laid the
foundation to become one of the primary global brands in the
burgeoning solar energy sector. We are positioned to capitalize on
the immense opportunities in the expanding international markets for
our remote power systems and alternative energy technologies."
OVERVIEW OF OPERATIONS
The growth in Carmanah"s operations, both organically and through
acquisition, has resulted in a broadening of the Company"s business
activities to include the design, manufacture and/or distribution of
three technology groups: solar-powered LED lighting, solar power
systems and LED-illuminated signage.
Carmanah"s Solar LED Lighting Group provides a variety of
energy-efficient LED lighting products for marine, aviation, transit,
roadway and industrial worksite applications. The Company"s 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. The Company also operates additional manufacturing and
distribution facilities in Calgary, Alberta, Canada, as well as
regional distribution and sub-assembly facilities in Barrie, ON;
Santa Cruz, CA; and London, England.
Carmanah currently has more than 250,000 installations in 110
countries. Carmanah"s customer list includes a wide range of
government, commercial and private users worldwide, who are serviced
directly by the Company or one of its regional authorized
distributors and/or sales agents.
RESULTS OF OPERATIONS
Carmanah"s sales for the year ended December 31, 2005 increased to
$38,729,885, representing an increase of 144% from the same period in
2004 at $15,895,041. Contributions from each technology group were
Segmented Sales Summary:
Three Months Ended Year Ended
December 31, December 31,
2005 2004 2005 2004
Solar LED Lighting $5,645,037 $2,730,016 $18,413,057 $13,305,702
Solar Power Systems $8,687,091 $ - $15,580,463 $ -
LED Sign $809,800 $949,898 $4,736,365 $2,589,339
Totals $15,141,928 $3,679,914 $38,729,885 $15,895,041
Carmanah"s increase in revenues is attributed to ongoing organic
growth as well as the contribution in Q3 and Q4 from its newly
acquired Solar Power Systems Group.
Organic sales achieved for 2005 from Carmanah"s Solar LED Lighting
and LED Sign Groups amounted to $23,149,422, representing a 46%
increase over the same period in 2004 at $15,895,041. Sales booked
in 2005 for these two groups was in excess of $25 million, and they
ended the year with a record sales order backlog of $3.6 million.
Sales contributions from the Company"s Solar Power Systems Group
amounted to $15,580,463 for the six-month period ending December 31,
2005. This group also ended the year with a sales order backlog of
Cost of Sales and Gross Profit Margin
Carmanah"s cost of sales for the year ended December 31, 2005 was
$24,311,146 (63% of sales), resulting in a gross profit margin of
37%. In comparison, for the year ended December 31, 2004, the cost
of sales was $7,655,700 (48% of revenue), resulting in a gross profit
margin of 52%. The shift in Carmanah"s cost of sales and gross
margin is primarily due to the sales contribution by its Solar Power
Systems Group during the last half of the fiscal year ($15,580,463 at
27% gross margin).
Carmanah offers a wide array of product solutions to a variety of
market sectors at various gross profit margins. The gross profit
margin is significantly affected by the ratio of sales contributed by
the various technological groups, by the product mix sold, as well as
the related market sector. Management is focused on the continual
improvement of gross margins in all sectors.
Wages and Benefits
For the year ended December 31, 2005, wages and benefits was
$6,843,164 compared with $3,509,101 for the same period in 2005.
This increase is the result of:
- $1,835,232 in additional wage expense resulting from the
acquisition of the Solar Power Systems Group;
- $326,944 in additional commissions due to increase in sales;
- $322,018 increased wages costs resulting from the expansion into
the UK in late 2005;
- an increase in marketing, finance and administrative staff in
support of overall sales growth; and
- an increase in senior staffing to provide more strength and
support across the Company"s executive and middle management
As a percentage of sales, total wages and benefits for the year ended
December 31, 2005 were 18%, down from 22% for the same period in 2004.
Office and Administration
Office and administration expenses for the year ended December 31,
2005, were $2,786,675, representing a 96% increase over same period
in 2004 of $1,423,744. The acquisition of the Solar Power Systems
Group contributed to 51% of this increase, with the addition of
$690,037 in office and administration expenses. Other contributors
to the increase in 2005 were primarily overall growth in facilities
and related resources:
- in late 2004, Carmanah opened an office in London, England, to
support the Company"s UK and European operations;
- in early 2005, Carmanah expanded its existing Victoria facility
to include an additional 6,000 square feet for LED-illuminated
roadway sign manufacturing;
- in September, 2005, Carmanah entered a lease to commence build
out for a new 25,000 square foot manufacturing and warehouse
- in late 2005, Carmanah expanded its Santa Cruz, CA, warehouse
facility to support its US operations.
Carmanah"s facility expansions have increased rent, general office,
administration and information technology expenses. However, as a
percentage of sales, office and administration expenses for the year
ended December 31, 2005 were 7%, down from 9% for the same period in
Sales and Marketing
Sales and marketing expenses for the year ended December 31, 2005,
were $1,775,099, representing a 32% increase over same period in 2004
of $1,341,112. Carmanah continued to increase sales and marketing
activities for new and existing product lines throughout its
worldwide marketplace, and is expanding its sales and marketing
efforts to include the Power Systems Group"s customers and verticals.
Sales and marketing expenses for the year ended December 31, 2005
were 5% of total sales, down from 8% for the same period 2004.
Research and Development
For the year ended December 31, 2005, research and development
expenses were $903,723 (net of $620,935 SR&ED investment tax
credits), compared with $959,842 (net of $316,000 SR&ED investment
tax credits and $71,223 government grant) in the previous year. The
SR&ED investment tax credits were the result of credits generated
from scientific research and experimental development expenses, and
recoverable as an offset to income taxes payable on taxable income.
Carmanah"s growth in research and development was the result of
increased investment in new product offerings and existing product
As a percentage of sales, gross research and development expenses
(before investment tax credits and grants) were 4% in 2005, compared
with 8% in 2004.
Income tax expense for the year ended December 31, 2005 totals
$575,646. This amount is comprised of current tax expense of
$1,021,372 and future income tax recovery of $445,726. The current
tax expense relates to taxable income generated by Carmanah in the
normal course of operations. Current tax expense as a percentage of
pre-tax earnings is high, as Carmanah chose to postpone certain tax
deductions to use investment tax credits that offset taxes otherwise
payable. The future income tax recovery of $445,726 recognizes the
availability of future tax deductions and was increased by $333,000
as a result of a reduction of the valuation allowance against future
tax assets. The reduction of the valuation allowance recognizes the
benefit of future income tax assets on past tax losses, based on the
expectation of future taxable income.
Earnings before interest, taxes and amortization ("EBITA") were
$1,981,573 for the year ended December 31, 2005, representing an
increase of 92% over the same period in 2004 at $1,034,434. Earnings
before income tax were $1,256,608, compared with $592,937 in 2004,
representing an increase of 112%. Net earnings were $680,962 in
2005, compared to $592,823 in 2004, representing an increase of 15%.
Balance Sheet Highlights
Carmanah"s cash, cash equivalents, and short-term investments at
December 31, 2005 were $11,662,214, compared to $7,751,411 at
December 31, 2004. Net cash usage from operations was $3,751,295 for
the year ended December 31, 2005.
Carmanah invested $5,559,897 in the purchase of Soltek, $1,432,936 in
the purchase of equipment, leasehold improvements and intangibles,
and increased investments by $2,930,000. Including the Soltek
acquisition, financing for operational and investing activities for
the year was raised by (1) the exercise of warrants and stock options
in the amount of $4,180,446, (2) the issuance of shares to former
shareholders of Soltek and (3) a private placement financing of
common shares for net proceeds of $14,179,349.
Net working capital as at December 31, 2005 was $26,332,325 with a
current ratio of 5.6:1 and $14,991 of non-current lease obligations.
ABOUT CARMANAH TECHNOLOGIES CORPORATION
Carmanah is an award-winning manufacturer specializing in renewable
and energy-efficient technology solutions. The Company is currently
focused on three technology groups: solar power systems & equipment,
solar-powered LED lighting and LED illuminated signage.
Carmanah is headquartered in Victoria, British Columbia, Canada and
has branch offices and/or sales representation in 11 cities across
Canada, the United States and the United Kingdom. With more than
250,000 installations worldwide, Carmanah is one of the world"s
premier suppliers of energy-efficient products.
The shares of Carmanah Technologies Corporation are publicly traded
on the Toronto Stock Exchange under the symbol "CMH" and on the
Berlin and Frankfurt Stock Exchanges under the symbol "QCX". For
more information, please visit www.carmanah.com.
On Behalf of the Board of Directors
Carmanah Technologies Corporation
Praveen Varshney, Director
For further information, please contact:
Mr. Mark Komonoski, Director
Tel: (403) 470-8384
Mr. David Davies
Tel: (250) 382-4332