VICTORIA, British Columbia--(BUSINESS WIRE)--Carmanah Technologies Corporation (TSX:CMH) (“the Company” or “Carmanah”) today reported its fourth quarter financial results for the period ended December 31, 2014.
For the fourth quarter of 2014, the Company recorded a net income of $0.3 million (inclusive of a restructuring charge of $0.2 million) on revenues of $13.5 million. This compares to a loss of $0.9 million on revenues of $7.8 million in the fourth quarter of 2013. Approximately $3.3 million of fourth quarter revenues are attributable to Sol, Inc. which Carmanah acquired on July 2, 2014. Revenues derived from the historical Carmanah businesses were approximately $10.2 million.
For the year ending December 31, 2014, the Company recorded net income of $1.0 million on revenues of $43.7 million. This compares to a loss of $5.6 million on revenues of $25.9 million in 2013. Approximately $5.5 million of 2014 revenue was attributable to Sol, Inc. which Carmanah acquired on July 2, 2014.
Carmanah management relies on adjusted EBITDA (a non-IFRS measure) to gauge financial performance. In 2014 the Company’s generated $3.5 million of adjusted EBITDA up from a loss of $2.8 million in 2013. A table reconciling net profit and adjusted EBITDA is included in this release.
“We are very pleased with the financial performance improvements attained in 2014,” said John Simmons, CEO. “Throughout the year our staff was focused on increasing revenues, attaining better margins and controlling operating costs. While we anticipated a successful turnaround in 2014, our actual results exceeded even our own expectations.”
Mr. Simmons added, “Our success in 2014 nicely positions us to pursue growth - both organically and by way of strategic acquisition. We have already made one important step in this regard by acquiring Sol, Inc. We will now selectively and prudently seek to deepen our impact in markets where we think we have the potential to be best in the world.”
Highlights for the quarter and the year are provided below:
Three months ended
|(US$ thousands, unless noted otherwise)||2014||2013||2014||2013|
|Gross Margin %||34.3%||33.3%||34.7%||28.5%|
|Total operating costs||4,181||3,426||12,982||12,830|
*Adjusted EBITDA is a Non-IFRS measure
Financial Condition at December 31, 2014 compared to December 31, 2013
- Cash and cash equivalents of $8.8 million, up $3.6 million from $5.2 million
- Working capital of $16.0 million, up $7.9 million from $8.1 million
- Continued debt-free operations
Fiscal year 2014 corporate highlights
- Acquisition of Sol - On July 2, 2014, we completed the acquisition of SOL Inc. (“Sol”), a Florida based solar outdoor lighting competitor. The acquisition was completed through a merger, under which we acquired 100% ownership of Sol in exchange for the issuance of 3,785,860 post consolidated shares which were issued from treasury and a cash payment of $0.06 million. This was a related party transaction, as our Chairman of the Board and largest shareholder, Mr. Sonnenfeldt was also the majority shareholder of Sol. Sol contributed approximately $5.5 million in reported revenue since the acquisition.
- On August 14, 2014, we completed a consolidation of our common shares on the basis of one (1) post-consolidation Common Share for every ten (10) pre-consolidation Common Shares (the “Consolidation”).
- During the year, we completed two separate private placements. The first was completed in April 2014 and provided proceeds of approximately $4.2 million CDN through the issuance of 1,930,000 shares at a price of $2.20 CDN. The second private placement was completed in July 2014 and provided proceeds of approximately $3.0 million CDN through the issuance of 1,200,000 shares at a price of $2.50 CDN per share. Both private placements were subscribed for predominantly by members of our board and management and the proceeds were used to bolster working capital.
Unless otherwise indicated, all financial information presented in this press release is in US dollars.
Complete set of Financial Statements and Management Discussion & Analysis
A complete set of the fourth quarter ended December 31, 2014 Financial Statements and Management’s Discussion & Analysis are available on Carmanah's corporate website. To view these documents, visit: www.carmanah.com/Company/Investors/Financial_Reports.aspx. Both documents are also filed on SEDAR (www.sedar.com). The financial information included in this release is qualified in its entirety and should be read together with the audited consolidated financials for the year ended December 31, 2014, including the notes thereto.
Three months ended
|(US$ in thousands)||2014||2013||2014||2013|
|Income tax expense||(34)||-||(35)||5|
|Non-cash stock based compensation||113||13||326||46|
|Merger and acquisition costs||25||-||756||-|
|Extraordinary legal costs||139||125||804||291|
|Restructuring and asset write offs||312||552||190||1,517|
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 EBITDA, defined as net income before interest, income taxes, amortization, and non-cash stock based compensation. The other non-IFRS measure used is Adjusted EBITDA, which adjusts EBITDA for unusual or non-operating items such as merger and acquisition costs, restructuring charges and asset write offs.
About Carmanah Technologies Corporation.
Since its founding in 1996, Carmanah has become one of the most trusted names in solar technology, delivering reliable and cost-effective solar powered products and systems for industrial applications worldwide. To date, Carmanah's solutions for marine navigation, airfield ground lighting, obstruction lighting, roadway illumination, parking lot lighting, as well as on and off-grid power generation, have been successfully deployed in over 400,000 installations in 110 countries with proven performance in conditions ranging from desert heat to arctic cold.
In 2013, through shareholder led initiatives, the company was restructured under the leadership of CEO John Simmons, while the Company’s largest shareholder, Michael W. Sonnenfeldt, became non-executive Chairman. Carmanah’s current board members demonstrate their belief in Carmanah's future by having been the largest investors in each financing since the restructuring and now, as a group, own the majority of Carmanah's issued and outstanding shares.
Carmanah markets its products through three distinct divisions. Carmanah’s Signals Division produces products and systems for marine aids to navigation, airfield ground lighting, obstruction and traffic control. Carmanah’s Power Division designs and builds systems that provide solar power in both grid connected and off-grid applications. Carmanah’s Illumination Division produces solar powered lighting solutions for street, parking lot and pathway applications.
Carmanah is publicly traded 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. Examples of forward-looking information in this news release include, but are not limited to, statements with respect to: our ability to continue our growth both organically and through mergers and acquisitions. 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.