Carmanah Reports Third Quarter 2013 Resultsadmin
Carmanah Reports Third Quarter 2013 Results
Victoria, British Columbia CANADA, November 14, 2013 /FSC/ – Carmanah Technologies Corporation (CMH – TSX), (“the Company” or “Carmanah”) today reported its third quarter financial results for the period ended September 30, 2013.
For the third quarter of 2013, the Company recorded a net loss of $1.4 million on revenues of $4.9 million. Summary financial information is provided below.
Financial Condition at September 30, 2013 compared to December 31, 2012
* Cash and cash equivalents of $1.6 million, down $1.1 million from $2.7 million
* Working capital of $3.0 million, down $3.3 million from $6.3 million
* Continued debt-free operations
Third quarter 2013 compared to third quarter 2012
* Revenues: $4.9 million, down $1.7 million from $6.6 million
* Gross margin: 23.7%, down from 31.1%
* Operating costs: $2.6 million, down $0.4 million from $3.0 million
* Net loss: $1.4 million loss, up $0.6 million from a loss of $0.8 million
* Adjusted EBITDA (a non-IFRS measure): negative $1.3 million, up from negative $0.5 million
Adjusted EBITDA reconciliation Three months ended Nine months ended
September 30 September 30
(US$ in thousands) 2013 2012 2013 2012
Net loss (1,442) (838) (4,631) (3,200)
Income tax expense 3 – 5 –
Amortization 217 288 692 853
EBITDA* (1,222) (550) (3,934) (2,347)
Intangible asset impairment – – 965 –
Non-cash stock based compensation (75) 61 33 212
Adjusted EBITDA* (1,297) (489) (2,936) (2,135)
* A Non-IFRS measure
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, impairment adjustments, restructuring/retirement provision, and acquisition related costs.
Third quarter 2013 corporate operational highlights included:
* Refinancing: During the third quarter announced a refinancing of the company by way of a rights offering (“Offering”). Under the Offering each shareholder was given one right for each share held on the applicable record date. Each right is exercisable for one common share at a subscription price of $0.12 (CDN) and if all rights are exercised the company will raise approximately $6.0 million (CDN). In connection with the Offering, the Company also entered into a binding standby purchase agreement with a group of investors, who have committed, subject to certain conditions, to purchase up to $5.5 million of the rights shares that are not otherwise subscribed for by other holders. The expiry date of the rights is November 18, 2013 and the offering will close on November 19, 2013.
* Resignation: Mr. Bob Wiens resigned from the board on October 1, 2013.
* Spot Devices Additional Provision: Due to a variety of events that have occurred subsequent to the acquisition of the assets of Spot Devices early in 2013, management concluded the underlying intangibles acquired were impaired. Consequently, management booked an intangible impairment of approximately $0.6 million in the second quarter of 2013. During the third quarter, an offer was extended to all customers who were sold Spot Devices products to replace the product, either at a discount or free of charge depending on the situation. As a result of the offer, the Company has booked an additional $0.1 million provision in the third quarter to cover off associated costs.
Events subsequent to the third quarter include:
* Restructuring: The company announces today that it will incur a special one-time restructuring charge of approximately $0.9 million in the fourth quarter of 2013. This restructuring effort was initially announced in our September 17th, 2013 press release regarding recent developments. The restructuring charge is the estimated aggregate cost of completing a significant reorganization of the business designed to reduce operating costs, improve efficiencies and to organize the company in such a manner that it can pursue future revenue growth on a profitable basis. This cash charge includes, where appropriate, salaries of staff who are working under notices of termination, severance costs, one-time costs of renegotiating employment contracts as well as related professional fees. In addition, the restructuring charge includes the estimated costs of decommissioning the company’s current ERP system including wages and penalties. The restructuring provision, while provided for in the fourth quarter of 2013, will be liquidated in the fourth quarter of 2013 and the first two quarters of fiscal 2014.
Unless otherwise indicated, all financial information presented in this press release is in US dollars.
Complete set of Financial Statements and Management Discussion & Analysis
A complete set of the third quarter ended September 30, 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.
Carmanah Technologies Corporation
Stuart Williams, Chief Financial Officer
For further information:
Investor Relations: Stuart Williams
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,” “plans,” “estimates,” “intends,” “believes,” “could,” “might,” “will” or variations of such words and phrases. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of Carmanah to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. These statements are based on management’s current expectations and beliefs and are subject to a number of risks and uncertainties. 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 www.sedar.com and on the Company’s website at www.carmanah.com. 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. Accordingly, readers should not place undue reliance on forward-looking statements. Carmanah does not assume any obligation to update the forward-looking information contained in this press release.
To view the press release as a PDF, please click on the following link:
Source: Carmanah Technologies Corporation (CMH – TSX) http://www.carmanah.com
Maximum News Dissemination by FSCwire. http://www.fscwire.com
Posted: November 14th, 2013 under FSCWIRE.