Carmanah Announces Record Third Quarter Results

$2.3M in Sales with $114k Profit

Victoria, BC - October 30, 2003 - Carmanah Technologies Corporation (TSX VE: CMH) is pleased to announce its third quarter results for the three-month periods ended September 30, 2003 and 2002.

FINANCIAL HIGHLIGHTS:

Sales hit a record $2,340,810 for the three months ended September 30, 2003

  • Increase of 20% over prior record set in 4Q2002 at $1,941,599
  • Increase of 43% over same period in 2002 at $1,632,523

Sales hit a record $5,855,312 for the nine months ended September 30, 2003

  • Increase of 28% over same period in 2002 at $4,545,858

Net earnings hit a record $114,381 for the three months ended September 30, 2003

  • Increase of 163% over prior record set in same period in 2002 at $43,472

Carmanah's total revenue for the three months ended September 30, 2003 represented the highest quarterly sales in the Company's history. Total revenue for the quarter increased by 45% over the previous quarter and by 43% over the comparative 2002 quarter. The third quarter of 2003 also produced the largest quarterly profit in the Company's history in the amount of $114,381.

"It is very encouraging to see so many key performance indicators showing positive results at the same time," states Art Aylesworth, Carmanah's CEO. "We are pleased that the effort and resources invested earlier this year are being rewarded. Our sales ($2.3M) and net profits ($114K) in this quarter, as well as the carry over backlog orders ($1.1M) heading into the fourth quarter, are all at record levels. These results also do not include any revenue contributions from our newly acquired subsidiary, AVVA Light Corp., which came on stream October 1st, 2003. By all measureables, this was the best quarter in Carmanah's history."

Carmanah has focused on broadening the markets for its technology to include new verticals beyond the marine market. During the past three months, the Company has seen a significant validation of its transit products with a $1.6M order for 300 bus shelter lighting systems to be installed in the city of London, England. Carmanah also received over $1M in orders for its aviation runway and taxiway solar-powered lighting systems during Q3. "The ongoing strength of our marine product sales coupled with the rapid acceptance of transit and aviation products confirms that our core technology is transferable to new markets", states Aylesworth. "We are now planning a release of two new products for the roadways market by the end of 2003 that use a combination of technologies from Carmanah and AVVA."

MANAGEMENT DISCUSSION AND ANALYSIS:

3 Months Ended September 30

Carmanah achieved record sales for the three months ended September 30, 2003 in the amount of $2,340,810. This is an increase of 20% over prior record set in 4Q2002 at $1,941,599, and an increase of

43% over the same period 2002 in the amount of $1,632,523. Sales are sourced through a worldwide distribution network and direct sales efforts in key market segments and territories. Direct sales efforts into new markets such as transit and aviation contributed to these record results, with 30% of third quarter sales coming from these two markets.

Carmanah also achieved record profitability for the three months ended September 30, 2003 in the amount of $114,381, an increase of 163% over the prior record set in the same period in 2002 at $43,472. Earnings before interest, taxes, depreciation and amortization (EBITDA) for the quarter were $198,551 compared with $142,484 for the same quarter in 2002.

Carmanah's gross profit margin for the quarter was 54% of sales, a 5% reduction over the comparative 2002 quarter. Gross margins have fluctuated more on a month-to-month basis this year than last year due to a number of contributing factors, with the largest being the result of fluctuations in the US dollar relative to the Canadian dollar as the Company's product pricing was pegged in US dollars. However, as our direct sales efforts continue to grow, we are gaining margins as a result of the ratio split between direct sales and distributor sales, as direct sales yield higher margins. Other factors that affecting gross margins include size of order on a per customer basis due to volume discounts, and adjustments made to the Company's purchasing practices. The 54% margin achieved for the three months ended September 30, 2003 is consistent with year to date average of 54%.

9 Months Ended September 30

Carmanah recorded a record $5,855,312 in sales for the nine months ended September 30, 2003, an increase of 28% over the same period in 2002 at $4,545,858.

Direct cost of goods totaled $2,683,907 as compared to $1,913,786 for the nine months ended September 30, 2002. Gross profit as a percentage of sales was 54% as compared to 57% during the same period in 2002.

Sales and marketing expenses for the nine months ended September 30, 2003 were $477,946, representing a 14% increase or $60,277 over 2002 at $417,669. As a percentage of sales, year to date sales and marketing for 2003 are 8% of sales, compared to 9% for same period 2002. Carmanah continues sales and marketing activities for new and existing product lines throughout its worldwide marketplace, broadening its scope to include investment in emerging markets, such as transit, aviation and roadways. Given the additional vertical markets that require sales and marketing support, the Company continues to manage its activity and expense relative to sales growth, and is beginning to realize revenues from investment into new markets.

For the nine months ended September 30, 2003, research and development expenses of $642,891 represented a 35% increase over the previous year's $474,565. The $642,891 research and development expense incurred to September 30, 2003 is net of eligible expenses recovered under a grant awarded to the Company by Sustainable Development Technology Canada. Under the terms of the agreement, the Company will be reimbursed for certain research and development costs incurred to develop and commercialize specific projects to a maximum contribution of $500,000. For the nine months ended September 30, 2003, eligible research and development expenses in the amount of $124,690 were recovered (2002 - $142,734). As a percentage of sales, research and development expenses for the nine months ended September 30, 2003 were 13% (before grant recovery), whereas they were 10% for the same period in 2002.

Wages and benefits expense increased 26% to $1,307,571, compared with $1,039,075 for the same period in 2002. This increase is the result of an increase in sales and administrative staff in support of planned sales growth. The Company also hired a Vice President of Sales and Marketing in July 2002, whose wage cost is not reflected in the September 30, 2002 comparative figures. As a percentage of sales, wage and benefits expense for the nine months ended 2003 is consistent with the same period for 2002, at 22% of sales.

Office and administration expenses are $503,698, representing a 28% increase over 2002 at $393,662. During the first half of 2002, Carmanah was operating out of one building. It has since expanded into an adjacent building, resulting in increased rent, utilities and general office costs. This move was required to support the expansion of the Company's production facility as a result of new product offerings, as well as to support growth of sales, administration, research and development staff.

Interest and other income in the amount of $9,209, is a 76% reduction from 2002 at $38,504. This is due to reduced interest income on Advances Receivable in the amount of $8,384 as a result of new terms negotiated effective April 1, 2003, and reduced interest income on term deposits in the amount of $21,941 as a result of reduced investment in term deposits and lower interest rates.

Net income was $44,409 compared to $49,729 for the same period in 2002. Earnings before interest, taxes, depreciation and amortization (EBITDA) was $239,299, compared with $307,101 for the same period in 2002.

Carmanah's cash and cash equivalents at September 30, 2003 was $1,444,851, compared to $679,100 at December 31, 2002. The increase is due primarily to receipt of funds raised on the issuance of 2,000,000 shares at $0.74, resulting in net proceeds of $1,264,519 and the issuance of 294,327 shares for total proceeds of $219,745 from the exercise of options and warrants. Approximately $778,000 of the cash usage is the result of increased inventory levels, and acquisition of capital equipment and leasehold improvements. The Company's net working capital at September 30, 2003 is $3,446,353 (current ratio of 4.17:1) as compared to $2,006,148 (current ratio of 2.71:1) at December 31, 2002.

About Carmanah

Carmanah is an award winning alternative energy manufacturer specializing in patented solar-powered LED lighting solutions for the marine, transit, aviation, roadway, railway and mining markets. The Company has more than 70,000 units installed in 110 countries. The shares of Carmanah Technologies Corporation (parent company) 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.

On Behalf of the Board of Directors

Carmanah Technologies Corporation

Praveen Varshney, Director

For further information, please contact:

Corporate Contacts:

Mr. Praveen Varshney, Director

Tel: (604)629-0264

Toll-Free: 1-866-629-0264

AVVA Contact:Mr. Mark Komonoski

Carmanah Technologies Corporation

Tel: (403)861-8384

markk@avva.com

Media Contact:Mr. David Davies

Harbourwerks Communications

Tel: (250)382-4332

ddavies@harbourwerks.com

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 our Annual Report for the fiscal year ended December 31, 2001, 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 our Annual Information Form dated December 31, 2001, as filed with the British Columbia Securities Commission and which are incorporated herein by reference. We do not assume any obligation to update the forward-looking information contained in this press release.

CARMANAH TECHNOLOGIES CORPORATION

Consolidated Interim Balance Sheets

September 30, 2003 and December 31, 2002

(Unaudited - Prepared by Management)

    September 30,
2003
December,
2002
  (unaudited) audited
Assets
Current assets:
Cash and cash equivalents $ 1,444,851 $ 679,100
Accounts receivable 1,369,865 1,366,780
Inventories 1,620,399 1,057,666
Prepaid expenses and deposits 75,844 43,513
Current portion of
  advances receivable
21,000 26,844
4,531,959 3,173,903
Advances receivable 90,502 111,500
Equipment and leasehold improvements 576,615 471,079
Patents 33,288 34,154
$ 5,232,364 $ 3,790,636
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and
  accrued liabilities
952,610 947,014
Bank loan 70,000 140,000
Deferred revenue - 11,042
Current portion of
  long-term debt
21,780 21,684
Current portion of obligations under capital lease 39,076 48,015
Due to related parties 2,140 -
1,085,606 1,167,755
Long-term debt 38,792 55,139
Obligations under capital leases 22,919 49,566
Shareholders' equity:
Share capital 4,740,600 3,256,336
Contributed surplus 64,386 26,188
Deficit (719,939) (764,348)
4,085,047 2,518,176
$ 5,232,364 $ 3,790,636

CARMANAH TECHNOLOGIES CORPORATION

Consolidated Interim Statements of Operations and Deficit

For the nine months ended Septemper 30, 2003 and 2002

(Unaudited - Prepared by Management)

  3 months ended 9 months ended
  September September
    2003 2002 2003 2002
Sales 2,340,810 1,632,523 5,855,312 4,545,858
Cost of sales 1,075,276 664,427 2,683,907 1,913,786
Gross Margin 1,265,534 968,096 3,171,405 2,632,072
Operating expenses:
Wages and
     benefits
429,402 383,155 1,307,571 1,039,075
Research and
     development
298,170 156,065 642,891 474,565
Office and
     administration
158,432 150,100 503,698 393,662
Sales and
     marketing
180,979 136,292 477,946 417,669
Bank charges and
     interest
32,847 5,133 71,896 33,975
Amortization of:
   Capital assets 49,367 39,630 125,226 88,344
   Deferred devel-
     opment costs
- 55,625 - 166,874
   Patents and
     other intang-
     ible assets
2,204 2,529 6,977 6,683
1,151,401 928,529 3,136,205 2,620,847
Operating income
     (loss) for the period
114,133 39,567 35,200 11,225
Interest and other
     income
248 3,905 9,209 38,504
Net earnings for the period 114,381 43,472 44,409 49,729
Deficit, beginning
     of period
(834,320) (794,484) (764,348) (800,741)
Deficit, end of period (719,939) (751,012) (719,939) (751,012)
Earnings (loss)
     per share
$0.005 $0.002 $0.002 $0.002
Weighted average
     # of shares
     outstanding
22,897,055 20,652,710 22,832,186 20,652,710