Carmanah Announces Second Consecutive Profitable Quarter and Record Revenue

Vancouver, BC, Canada - (October 21, 2004) - Carmanah Technologies Corporation (TSX VE: CMH; Berlin and Frankfurt Stock Exchanges: QCX), is pleased to announce its third quarter results for the three months ended September 30, 2002. Highlights for the quarter are as follows:

  • Revenue up 81% over Q3 2001 to $1,632,523;
  • Profit of $43,472 for the quarter, as compared to net loss of $84,889 for Q3 2001;
  • Gross profit for the quarter reached a record 59% as direct sales increase;
  • Earnings before income tax, depreciation and amortization (EBITDA) was $146,389;
  • Revenue growth (81%) outpaced expenditures (61%);
  • Investment into developing new markets continued.

"This has been an exciting year for our company," stated Art Aylesworth, Carmanah's CEO. "Several key developments have come together to put our products at the forefront of the rising market for solar-powered LED lighting."

Carmanah's continued success is due to both the ongoing popularity of its marine navigation lights as well as the spread of its core proprietary solar-powered LED technology to new markets and applications. Key developments in the third quarter include:

  • In August, Carmanah's 700 Series lights became the first solar-powered LED-based marine lights to be officially approved by the U.S. Coast Guard (USCG) for use in the U.S. Aids-to-Navigation System, an approval process that took three years. This approval has international implications, as other regulatory bodies often follow the lead of the USCG.
  • In September, Carmanah was designated a U.S. Federal Supply Contractor. Carmanah now supplies lights directly to the U.S. federal government as a pre-approved supplier, without a bidding process. In the first month of becoming a Federal Supply Contractor, the USCG purchased US $180,000 worth of lights from Carmanah.
  • Major inroads have been made into the railway market with both solar-powered LED hazard lighting as well as bridge markers. Sales into the railway market accounted for approximately 18% of Carmanah's revenues in the third quarter.

SUMMARY OF RESULTS FOR 2002

3 Months Ended September 30

Carmanah recorded a record $1,632,523 in revenues. This was an 81% increase of $733,107 over the same period in 2001.

Direct cost of goods totaled $664,427, as compared to $444,177 for the three months ended September 30, 2001. Total operational expenses were $928,529, a 61% increase over the $577,686 in the same period in 2001.

Gross profit as a percentage of sales reached a record 59%. Net income was $43,472 as compared to a net loss of $84,889 for the same period in 2001.

9 Months Ended September 30

Carmanah recorded a record $4,527,850 in revenues for the nine-month period. This was an increase of 79% over the same period in 2001. Revenue growth was achieved through (i) the continued growth of marine sales in existing product lines; (ii) expansion into the railway and mining markets with existing products; and (iii) expansion into the transportation and transit markets with entirely new products. Unit sales increased from 10,879 units sold and delivered for the first nine months of 2001 to 15,981 for the first nine months of 2002.

Direct cost of goods totaled $1,913,786 as compared to $1,184,030 for the nine months ended September 30, 2001. Gross profit as a percentage of sales was 58% as compared to 53% during the same period in 2001. This increase is a result of the Company's movement towards more direct selling through dedicated sales staff and an aggressive e-commerce program. EBITDA for the nine-month period was $345,605.

Total operational expenses were $2,620,847 as compared to $1,637,108 for the same period in 2001. This increase is attributed to the increased staff and administrative expenses necessary to support the Company's expansion into new products and new markets. As a percentage of sales, the operating expenses are down to 58%, as compared to 65% for the same period in 2001. Increasing investment is being made into markets that will be primary sources of revenues in the months and years to come.

Net income was $49,729 as compared to a net loss of $300,652 for the same period in 2001. The overall increase in net income is a result of an increase in sales.

Net working capital as at September 30, 2002 was $2,018,539 (current ratio of 5.75:1) as compared to $1,664,885 (current ratio of 4.76:1) as at December 31, 2001. The cash balance was $617,912 at quarter end as compared to $1,060,817 as at December 31, 2001. The decrease was primarily attributable to an increase in inventory levels.

The Company's non-current liabilities at September 30, 2002 totalled $52,127 and subsequent to quarter end, the operating credit facility was increased from $200,000 to $300,000.

About Carmanah Technologies Inc.

Carmanah is an award winning alternative energy manufacturer specializing in patented solar-powered LED lighting solutions for the marine, transit, roadway and railway markets. To-date, the company has more than 45,000 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 further 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

Media Contact:Mr. David Davies

Harbourwerks Communications

Tel: (250)382-4332

ddavies@harbourwerks.com

Investor Relations Contact:

Vanguard Shareholder Solutions

Tel: (604) 608-0824

Toll-Free: 1-800-567-6223

ir@vanguardsolutions.ca

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, 2002 and December 31, 2001

(Unaudited - Prepared by Management)

    September 30, December 31,
2002 2001
(unaudited) (audited)
Assets
Current assets:
Cash and cash equivalents $ 617,912 $ 1,060,817
Accounts receivable 993,185 358,958
Taxes recoverable 13,862 23,888
Prepaid expenses and deposits 37,082 26,777
Inventories 751,012 587,439
Current portion of
  advances receivable
30,014 49,472
2,443,067 2,107,351
Advances receivable 111,500 111,500
Capital assets 379,132 279,873
Deferred development costs 50,021 216,895
Patents and other intangibles 35,457 29,487
$ 3,019,177 $ 2,745,106
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable and
  accrued liabilities
362,615 340,876
Due to related parities 2,140 -
Bank loan 30,000 30,000
Current portion of
  long-term debt
5,402 27,790
Current portion of obligations under capital lease 6,371 25,800
Current portion of future
  income taxes
18,000 18,000
424,528 442,466
Long-term debt 21,823 17,143
Obligations under capital lease 30,304 30,304
Shareholders' equity:
Share capital 3,267,346 3,029,746
Contributed surplus 26,188 26,188
Deficit (751,012) (800,741)
2,542,522 2,255,193
$ 3,019,177 $ 2,745,106

CARMANAH TECHNOLOGIES CORPORATION

Consolidated Interim Statements of Operations and Deficit

For the nine months ended Septemper 30, 2002 and 2001

(Unaudited - Prepared by Management)

  3 months ended 9 months ended
  September September
    2002 2001 2002 2001
Revenues 1,632,523 899,416 4,527,850 2,528,399
Cost of goods sold 664,427 444,177 1,913,786 1,184,030
Gross Margin 968,096 455,239 2,614,064 1,344,369
Operating expenses:
Amortization of:
   Capital assets 39,630 29,274 88,344 76,282
   Deferred devel-
     opment costs
55,625 35,060 166,874 99,629
   Patents and
     other intang-
     ible assets
2,529 1,802 6,683 5,550
Bank charges and
     interest
5,133 6,371 33,975 21,954
Office and
     administration
150,100 119,338 393,662 300,263
Research and
     development
156,065 19,845 474,565 145,132
Sales and
     marketing
136,292 39,755 417,669 152,241
Wages and
     benefits
383,155 326,241 1,039,075 836,057
928,529 577,686 2,620,847 1,637,108
Operating income
     (loss) for the period
39,567 (122,447) (6,783) (292,739)
Other income:
Interest and other
     income
3,905 39,277 56,512 82,291
Reverse takeover costs -- (1,719) -- (90,204)
3,905 37,558 56,512 (7,913)
Income (loss) for the period 43,472 (84,889) 49,729 (300,652)
Deficit, beginning
     of period
(794,484) (340,005) (800,741) (124,242)
Deficit, end of period (751,012) (424,894) (751,012) (424,894)
Earnings (loss)
     per share
$0.002 $(0.005) $0.002 $(0.018)
Weighted average
     number of shares
     outstanding
20,652,710 16,841,442 20,652,710 16,841,442

CARMANAH TECHNOLOGIES CORPORATION

Consolidated Interim Statements of Cash Flows

For the nine months ended September 30, 2002 and 2001

(Unaudited - Prepared by Management)

  3 months ended 9 months ended
  September September
    2002 2001 2002 2001
Cash provided by (used in):
Operations:
Income (loss) for the period 43,472 (84,889) 49,729 (300,652)
Amortization, an item not
  involving cash
97,784 66,135 261,901 181,461
Changes in non-cash operating
     working capital:
   Accounts receivable (349,654) (143,832) (634,225) (285,176)
   Taxes recoverable (3,936) 31,930 10,026 (57,979)
   Inventories 82,296 45,630 (163,573) (108,538)
   Prepaid expenses and
     deposits
(1,473) (954) (10,305) (2,736)
   Advances receivable 6,625 2,500 19,458 2,500
   Accounts payable and
     accrued liabilities
29,285 (26,176) 21,739 88,489
(95,601) (109,656) (445,250) (482,631)
Investing:
Cash received on the reverse takeover of
Carmanah Technologies Inc.
-- -- -- 1,768,014
Capital asset additions (114,429) (48,299) (187,603) (142,496)
Deferred development costs -- (145,771) -- (145,771)
Patents and other intangibles (2,404) 505 (12,653) (9,527)
(116,833) (193,565) (200,256) 1,470,220
Financing:
Due to related parties 2,140 -- 2,140 --
Shared issuance costs -- (31,835) 237,600 (31,835)
Bank loan -- (20,000) -- (50,000)
Repayment of long term debt 14,606 3,545 (17,710) (10,852)
Obligations under
  capital leases
(6,484) (28,939) (19,429) 27,239
10,262 (77,229) 202,601 (65,448)
Increase (decrease) in cash and cash equivalents (202,172) (380,450) (442,905) 922,141
Cash and cash equivalents, beginning of period 820,084 1,488,225 1,060,817 185,634
Cash and cash equivalents, end of period 617,912 1,107,775 617,912 1,107,775