Victoria, British Columbia, Canada - April 21, 2005 - Carmanah
Technologies Corporation (TSX Venture: CMH) is pleased to announce
its first quarter results for the three months ended March 31, 2005
Highlights for the quarter:
- Record Q1 2005 revenues of $4,849,542.
- Record Q1 2005 orders booked of $6,089,305.
- Record order backlog at the end of Q1 in the amount of $2,839,576.
- Year-to-date gross profit margin at 52%, consistent with the
average gross profit margin for 2004.
- Q1 2005 net income of $263,422.
- Q1 2005 EBITDA of $325,190.
"With a record $4.8 million in product delivered and over $6 million
in orders booked during our first quarter, Carmanah is on track
towards realizing its sales goals for 2005," states Art Aylesworth,
Carmanah's CEO. "We are seeing a more balanced contribution of
revenues from each of our vertical markets. In particular LED signs,
aviation products and transit each experienced exceptional growth."
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Summary of Results
Carmanah's total revenues for the three months ended March 31, 2005
were $4,849,542, compared with $4,113,701 for the same period in
2004. Revenues were derived from the sale of solar-powered LED
lighting illumination products to the marine, aviation, transit and
roadway markets, as well as from the sale of LED edge-lit signs to
point-of-purchase and gaming markets. Sales were sourced through
both a worldwide distribution network and direct sales efforts.
The Company is seeing positive sales momentum developing this quarter
with the size and number of orders ramping up quickly through the
latter part of this quarter. The Company took in a record $6,089,305
in orders booked during the quarter, representing a 50% increase over
bookings from the same period 2004. This also resulted in the
Company closing Q1 2005 with record outstanding orders in the amount
Carmanah's gross profit margin achieved in Q1 was 52% of sales,
compared to 53% for the same period in 2004 (annual gross profit
margin for the 2004 fiscal year was 52%).
Wages and benefits expense for the three months ended March 31, 2005,
increased 28% to $1,030,499, compared with $804,941. As a percentage
of sales, wages and benefits expense represented 21% of sales in Q1
2005, compared with 20% of sales in Q1 2004. In support of planned
growth and expansion throughout the balance of 2005, the Company has
been focused on broadening and strengthening its executive and middle
management teams, resulting in increased senior staffing levels.
Furthermore, the Company has invested in staffing its UK office and
continues to hire administrative staff in support of increased
volumes and sales growth.
Office and administration expenses in first quarter 2005 were
$450,890, representing an 83% increase over same period in 2004 of
$246,802. The Company's investment in opening a London office
through December 2004 contributed approximately $60,000 to this
variance. A severance expense added a further $37,197. Management
expects that as the Company's sales forecast is met during the year,
these expenses as a percentage of sales will come down.
During the first quarter 2005, research and development expenses of
$363,225 represented a 7% increase over $337,903 in the comparative
quarter. The continued investment in research for existing product
enhancements and new product development has enabled Carmanah to turn
out prototypes and products at a faster rate. This ability to keep
up with market demands for technology enhancements and new product
offerings has rewarded the Company with its current sales momentum.
Carmanah will continue with its investment in research and
development as the Company works with key market segments on new
opportunities. As a percentage of sales, research and development
expenses decreased in Q1 2005 to 7% of sales, compared with Q1 2004
at 8% of total sales.
Sales and marketing expenses in first quarter 2005 were $357,625,
representing a 22% increase over same period in 2004 of $293,773.
The Company continued to increase sales and marketing activities for
new and existing product lines throughout its worldwide marketplace.
In addition, a significant portion of the overall sales and marketing
investment was allocated to markets and products where the Company
has identified significant future revenue opportunity. Sales and
marketing expense maintained at a consistent level of 7% of total
sales for both the 2005 and 2004 quarters.
The Company utilized a portion of its carry forward investment tax
credits, tax losses and SRED pools in order to minimize any current
tax expense. The future income tax effect arising from the use of
these items has been offset against available tax losses not
Net earnings for Q1 2005 were $263,422 (5% of sales) compared with
$369,492 (9% of sales) in Q1 2004. The Company started 2005
aggressively setting up its UK branch operations, hiring management
and support staff, and setting up infrastructure required to carry it
through the year. The up front costs incurred from this resulted in
a fairly significant increase in Q1 2005 operating expenses as a
percentage of sales, compared with the same period in 2004. Earnings
before interest, taxes, depreciation and amortization (EBITDA) were
$325,190 for the three months ended March 31, 2005 as compared to
$483,135 for the same period in 2004.
Carmanah's cash, cash equivalents, and short-term investments at
March 31, 2005 were $8,769,662, compared to $7,751,411 at December
31, 2004. Net cash usage from operations and investing activities
was $61,058. During the quarter, the Company raised $1,085,620 from
the exercise of warrants and stock options. Net working capital at
the end Q1 2005 was $13,019,439, with a current ratio of 8.9:1 and
$11,202 of non-current debt obligations.
Carmanah is an award-winning manufacturer of proprietary LED-based
lighting and illumination products for the public transit, marine,
aviation, roadway, and industrial worksite and illuminated signage
markets. The Company has more than 100,000 solar-powered LED
lighting installations and 50,000 LED illuminated sign installations
in 110 countries. The shares of Carmanah Technologies Corporation
are publicly traded on the TSX Venture 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.
The Annual General Meeting for Carmanah Technologies Corporation will
be held on a newly scheduled date of Friday, May 27, 2005 at 11:30 AM
PST at the Delta Victoria Ocean Pointe Resort, 45 Songhees Road,
Victoria, BC, Canada. Attendance is not limited to shareholders, so
other guests are welcome. Should you wish to attend, please email us
On Behalf of the Board of Directors
Carmanah Technologies Corporation
" Praveen Varshney "
Praveen Varshney, Director
For further information, please contact:
Mr. Mark Komonoski, Director
Carmanah Technologies Corporation
Tel: (403) 861-8384
Mr. David Davies
Tel: (250) 382-4332
This release contains forward-looking statements within the meaning of the "safe harbor" provisions of the U.S. Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of risks and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements. These risks and uncertainties are described under the caption "Note Regarding Forward-looking Statements" and "Key Information - Risk Factors" and elsewhere in Carmanah's Annual Report for the fiscal year ended December 31, 2003, as filed with the U.S. Securities and Exchange Commission and which are incorporated herein by reference. These risks and uncertainties are also described under the caption "Risk Factors" in Carmanah's Annual Information Form dated December 31, 2003, as filed with the British Columbia Securities Commission and which are incorporated herein by reference. Carmanah does not assume any obligation to update the forward-looking information contained in this press release.