Carmanah Reports First Quarter 2013 Results
VICTORIA, BRITISH COLUMBIA - Carmanah Technologies Corporation reported its first quarter financial results for the period ended March 31, 2013.
For the quarter-end March 31, 2013, the Company recorded revenue of $7.0 million, a net loss of $0.7 million, and an Adjusted EBITDA of negative $0.4 million. Q1 2013 reflects a 30% increase in revenues compared to the prior year same quarter and marks the significant recovery of our Solar EPC Services segment.
“Q1 2013 revenue performance is moving in the right direction: up 30% or $1.6 million versus the prior year's first quarter and representing strength in signalling. Our traffic business specifically has more than doubled the previous year's quarter. Q1 EBITDA performance also improved versus the previous year's quarter by $0.2 million, although it falls short of full year expectations for positive EBITDA," comments Bruce Cousins, Carmanah CEO. “I remain concerned with cash reserves, however I am encouraged with pipeline growth, our strategic success at Lightfair 2013, and the impending launch of several new products in the signalling businesses."
Financial Condition at March 31, 2013 compared to December 31, 2012
Cash and cash equivalents of $2.0 million, down $0.7 million from $2.7 million
Working capital of $5.8 million, down $0.5 million from $6.3 million
Continued debt-free operations
First quarter 2013 compared to first quarter 2012
Revenues: $7.0 million, up $1.6 million from $5.4 million
Gross margin: 30.3%, down from 37.2%
Operating costs: $2.8 million, down $0.1 million from $2.9 million
Net loss: $0.7 million, down $0.2 million from $0.9 million
Adjusted EBITDA (a non-IFRS measure): negative $0.4 million, up $0.2 million from negative $0.6 million
Summary of operations:
Revenues for the first quarter of 2013 were $7.0 million, up $1.6 million from $5.4 million in the first quarter of 2012. By product sector, revenues are as follows:
Traffic, $1.3 million, up from $0.6 million
Marine, $0.8 million, down from $1.4 million
Aviation/Obstruction, $1.0 million, up from $0.9 million
Outdoor Lighting, $0.5 million, down from $0.8 million
Go Power!, $2.2 million, up from $1.6 million
Solar EPC Services, $1.2 million, up from $0.1 million
Gross margin percentages for first quarter of 2013 were 30.3%, down from 37.2% for first quarter 2012. Key drivers in margin variation include overall sales mix, with stronger performance in lower margin segments, and foreign currency exchange rates. Broken down by product sector, gross margin percentages are as follows:
Traffic, 46.0%, up from 37.6%
Marine, 24.8%, down from 38.3%
Aviation/Obstruction, 32.3%, down from 46.9%
Outdoor Lighting, 19.2% down from 28.5%
Solar EPC Services, 17.7% up from negative 7.4%
Go Power!, 31.1%, down from 36.1%
Corporate operational highlights during the first quarter of 2013 included:
Traffic: Closed the transaction to acquire certain assets of Spot, a Nevada, USA-based manufacturer of traffic, pedestrian and school zone safety systems on January 4, 2013. Included in the transaction is right to a license agreement for the exclusive use of System Infrastructure Management Application (“SIMA”) technology for public roadway applications. SIMA was developed by Cirrus Systems, LLC, a related company to Spot for traffic. Terms of the transaction include the issuance of 2.2 million of our shares to Spot (valued approximately $0.6 million on close) plus conditional cash payments pursuant to a two-year cash earn-out where Spot is paid 12.5% of the portion of cumulative 2013 and 2014 Gross Traffic revenues exceeding $17.5 million.
Marine: Progressed significantly towards near term completion on development work that will result in the release of nine different products across two product families by mid-2013. Built a stronger and more efficient sales and support team.
Aviation: Through the ADB-Carmanah partnership sold five deployable, solar-powered airfield and helipad lighting systems to the Brazilian Air Force at a value of over $0.4 million. Canadian Forces Base (CFB) Wainwright, Alberta, selected the company’s A704-H high-power runway edge lights in a transaction valued at over $0.2 million.
Obstruction: Introduced Obstruction specific lanterns (the “OL” series) and booked the first significant stocking order for the OL32 to a major US distributor in the amount of approximately $0.1 million. Also received acceptance testing and an initial purchase for the same OL32 product from a significant utility company in the US.
Outdoor Lighting: Launched “powered by Carmanah” standalone solar engine product line. This new solar engine product line allows for the supply of Carmanah’s commercial-grade solar outdoor light engines for integration with virtually any luminaire manufacturer’s product. Signed a supply agreement with Acuity Brands, Inc., a leading provider of LED lighting and lighting controls. The agreement provides for the supply of our solar outdoor light engines for integration into certain luminaires provided by Acuity.
Solar EPC Services: Closed construction on three 250kW projects.
GoPower!: Recreational Vehicle market annual Canadian booking program resulted in a 23% performance increase over the same period in 2012. Introduced Portable Solar Kit series and the largest single panel solar kit. Announced a large sale with a national American US Utility to outfit an additional 1500 service vehicles with power inverters.
Unless otherwise indicated, all financial information presented in this press release is in US dollars.
Management believes that the non-IFRS measures presented provide useful information by excluding certain items that may not be indicative of Carmanah’s core operating results and that this non-IFRS measure will allow for a better evaluation of the operating performance of the Company’s business and facilitate meaningful comparison of results in the current period to those in prior periods as well as future periods. Reference to this non-IFRS measure should not be considered as a substitute for results that are presented in a manner consistent with IFRS. This non-IFRS measure is provided to enhance investors’ overall understanding of Carmanah’s current financial performance.
A limitation of utilizing this non-IFRS measure 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. One such non-IFRS measure used for assessing financial performance is Adjusted EBITDA, defined as net income before interest, income taxes, amortization, non-cash stock-based compensation, restructuring/retirement provision, and acquisition related costs.
Complete set of Financial Statements and Management Discussion & Analysis
A complete set of the first quarter ended March 31, 2013 Financial Statements and Management’s Discussion & Analysis are available on Carmanah's corporate website. To view these documents, visit: www.carmanah.com/Company/Investors/Financial_Reports.aspx. Both documents are also filed on SEDAR (www.sedar.com).
About Carmanah Technologies Corporation
As one of the most trusted names in solar technology, Carmanah has earned a reputation for delivering strong and effective products for industrial applications worldwide. Industry proven to perform reliably in some of the world's harshest environments, Carmanah solar LED lights and solar power systems provide a durable, dependable and cost effective energy alternative. Carmanah pursues its business strategy within six distinctive product offerings: outdoor lighting, marine signal, aviation signals, traffic signals, Solar EPC Services and GoPower!. Carmanah is actively seeking additional product sales opportunities to add to its top line revenue, as well as extending existing product lines through internal development efforts, strategic business relationships as well as focused acquisitions. Carmanah is a publicly traded company, with common shares listed on the Toronto Stock Exchange under the symbol "CMH”. For more information, visit www.carmanah.com.
For further information:
Investor Relations: Roland Sartorius, CFO