Carmanah Reports Fourth Quarter, and Fiscal 2016 Results

Ad blocking detected

Thank you for visiting CanadianInsider.com. We have detected you cannot see ads being served on our site due to blocking. Unfortunately, due to the high cost of data, we cannot serve the requested page without the accompanied ads.

If you have installed ad-blocking software, please disable it (sometimes a complete uninstall is necessary). Private browsing Firefox users should be able to disable tracking protection while visiting our website. Visit Mozilla support for more information. If you do not believe you have any ad-blocking software on your browser, you may want to try another browser, computer or internet service provider. Alternatively, you may consider the following if you want an ad-free experience.

Canadian Insider Ultra Club
$500/ year*
Daily Morning INK newsletter
+3 months archive
Canadian Market INK weekly newsletter
+3 months archive
30 publication downloads per month from the PDF store
Top 20 Gold, Top 30 Energy, Top 40 Stock downloads from the PDF store
All benefits of basic registration
No 3rd party display ads
JOIN THE CLUB

* Price is subject to applicable taxes.

Paid subscriptions and memberships are auto-renewing unless cancelled (easily done via the Account Settings Membership Status page after logging in). Once cancelled, a subscription or membership will terminate at the end of the current term.

Carmanah Reports Fourth Quarter, and Fiscal 2016 Results

VICTORIA, BRITISH COLUMBIA--(Marketwired - Mar 20, 2017) - Carmanah Technologies Corporation (TSX:CMH) ("the Company" or "Carmanah") today reported its fourth quarter, and fiscal 2016 financial results for the period ended December 31, 2016. Currency amounts are in U.S. dollars unless otherwise noted.

All figures below, unless otherwise stated, are for Carmanah's continuing operations and exclude the operating results from the Company's Power business segment. The planned disposal was announced in a press release dated October 11, 2016.

Fourth Quarter Revenues and Profitability

Revenues in the fourth quarter of 2016 were USD $10.7 million, down 32% over the same period in 2015 which generated revenues of USD $15.8 million. The overall decline in revenues was primarily attributable to lower:

  • Marine and Offshore Wind sales, both of which had exceptionally strong revenues in the fourth quarter of 2015 due to several larger projects completed in the period.
  • Illumination sales due to a significant decline in international revenues.

Net income in the fourth quarter of 2016 was USD $0.1 million down from USD $1.3 million in the fourth quarter of 2015. Management relies on Adjusted EBITDA(1) (a non-IFRS measure) to gauge financial performance, a table reconciling Adjusted EBITDA is provided in this press release. Adjusted EBITDA in the fourth quarter was $1.3 million or 12% of revenue, which is down from $3.1 million, or 19% of revenue in the same period in 2015. The variance is largely a result of lower revenues.

Fiscal 2016 Revenues and Profitability

Revenues for the year were USD $47.7 million, up 11% over 2015 revenues of USD $43.1 million. The overall increase for the yearly revenues was primarily due to the inclusion of a full year of the Sabik group of companies in 2016, while 2015 only included the final two quarters.

(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 the three and twelve months period ended December 31, 2016 for a more detailed discussion of these measures and their calculation.

Net income for the year was USD $2.9 million, down from USD $9.7 million in fiscal 2015. This decrease is mainly due to the recognition in 2015 of investment tax credits and deferred income tax assets which were previously unrecognized. Management relies on Adjusted EBITDA (a non-IFRS measure) to gauge financial performance. Adjusted EBITDA for the year was USD $7.0 million or 15% of revenue, which is up from USD $6.3 million, or 15% of revenue in the same period in 2015.

John Simmons, Chief Executive Officer commented. "2016 was pivotal for Carmanah. During the year, we decided to focus on our Signals and Illuminations businesses and began the process of divesting our Power businesses. Despite these distractions, and lower than expected 4th quarter revenues, our Adjusted EBITDA for the year exceeded 15% of revenue and we generated over USD $7.0 million in cash. We ended the year with nearly USD $22 million in cash which should become significantly larger as we complete the divestitures of our Power businesses. We are now focused and have ample resources to pursue organic growth and strategic acquisitions."

Highlights for the quarter are provided below:

Three months ended December 31, Year ended December 31,
(US$ thousands) 2016 2015 2016 2015
Revenue 10,714 15,824 47,742 43,090
Gross margin % 41.6% 41.4% 43.0% 41.2%
Core operating expenditures1 (3,802) (4,939) (16,531) (15,168)
Net income 80 1,288 2,917 9,694
Adjusted EBITDA1 1,316 3,089 7,020 6,308

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

  • Cash and cash equivalents of USD $21.9 million, up USD $7.0 million from USD $14.9 million
  • Working capital was USD $21.6 million, down USD $6.7 million from USD $28.3 million. The decrease is due to the net assets of the Power segment being classified as Assets held for sale.

Complete set of Financial Statements and Management Discussion & Analysis

A complete set of the fourth quarter ended December 31, 2016 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). The financial information included in this release is qualified in its entirety and should be read together with the audited consolidated financial statements for the year ended December 31, 2016, including the notes thereto.

EBITDA and Adjusted EBITDA[1]

EBITDA reconciliations Three months ended December 31, Year ended December 31,
(US$ in thousands) 2016 2015 2016 2015
Net income 80 1,288 2,917 9,694
Add/(deduct):
Interest 57 188 284 188
Income taxes 228 149 1,037 (6,062)
Amortization 426 546 1,623 2,052
Non-cash stock based compensation 151 243 700 815
EBITDA [1] 942 2,414 6,561 6,687
Merger and acquisition costs 294 3 666 1,218
Extraordinary legal costs/(recovery) 37 2 (161) 34
Fair value of acquired inventory - 492 - 492
Investment tax credits - re-recognition - (182) - (4,502)
Restructuring and asset write offs - 143 - 539
Other inventory write downs - 15 - 383
Foreign exchange (gain)/loss 43 202 (46) 1,457
Adjusted EBITDA 1,316 3,089 7,020 6,308

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.

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, 2016; 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 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.

Carmanah Technologies Corporation:
Evan Brown
(250) 380-0052
Chief Financial Officer/Corporate Secretary
[email protected]

Comment On!

140
Upload limit is up to 1mb only
To post messages to your Socail Media account, you must first give authorization from the websites. Select the platform you wish to connect your account to CanadianInsider.com (via Easy Blurb).