NOVIK CONTINUES ITS SALES GROWTH
May 19 2011 - 1:23PM
PR Newswire (Canada)
QUEBEC CITY, May 19 /CNW/ -- FIRST QUARTER 2011 HIGHLIGHTS --
Record sales for a first quarter at $4.5M -- 16% sales growth
versus first quarter 2010 -- Increase in gross margin to 36% of
sales -- Adjusted EBITDA of $390,000 compared with $49,000 -- Net
loss of $77,000 compared to $275,000 QUEBEC CITY, May 19 /CNW
Telbec/ - Novik inc. (TSXV: NVK) releases today its results for the
first quarter of fiscal year 2011. All amounts are expressed in
Canadian dollars unless otherwise indicated. NOVIK inc. for the
periods ended March 31, 2011 and 2010 First First (in thousands
dollars, except for amounts per quarter quarter share) 2011 2010 $
$ Operating results Revenues 4,486 3,854 Gross margin 1,619 1,274
Income before depreciation, stock-based 390 49 compensation,
financial expenses and income taxes Net loss (77) (275) Basic and
diluted net income (loss) per share (0.002) (0.006) NOVIK inc.
March 31, Dec. 31, (in thousands dollars, except for amounts per
2011 2010 share) $ $ Financial position Total assets 24,988 24,469
Working capital 2,516 2,186 Total long-term financial liabilities
9,553 8,960 Total liabilities 13,589 13,090 Shareholder's equity
11,308 11,379 Shareholder's equity per share 0.23 0.23 Number of
shares outstanding 48,470,858 48,470,858 During the course of the
first quarter of fiscal year 2011, Novik recorded revenues of $4.5
M, compared to $3.9 M during the same quarter of the previous
fiscal year. Mr. Gaudreau, Novik's CEO, points out "this
level of sales is a record for Novik during a first quarter,
surpassing that of last year. It should be noted that for the
last six quarters, Novik has had record sales for each of these
periods." This 16% growth in Novik sales in the first quarter
compared to the same period of the previous fiscal year is
localized in Europe and Mexico. Stronger economic activity in
certain European countries has allowed Novik to make more
deliveries on this continent since the beginning of the year with
distributors in place. Greater sales of nearly $850,000 in
the first quarter compared to the same period of the previous
fiscal year suggest greater annual growth in 2011 compared to 2009
and 2010. In the last two fiscal years, European sales
totalled $1.9 M in 2009 and $2.4 M in 2010. As for our
Mexican sales, since the beginning of the year, a major distributor
in this country has been given more construction projects using one
of our roof coverings. As of today, orders totalling more
than $1,000,000 have been received from this customer in 2011, and
most of them will be delivered in the next quarter. At the Canadian
level, sales remained stable in this first quarter compared to last
year and despite the weather condition experienced in this
period. The late snowmelt, seen mainly in Quebec and the
Maritimes, slowed down construction and renovation projects in
these territories. In the US, the decrease in sales of nearly
$400,000 is also explained in part by the severe weather conditions
seen in the northern United States, which has delayed renovation
and residential construction projects. In addition, during the
first quarter of last year, Novik had offered advantageous
introductory discounts to new US distributors. This initiative had
thus allowed Novik to generate sales figures greater than those
observed in the current quarter but at lower profitability.
EARNINGS BEFORE INTEREST, STOCK-BASED COMPENSATION COSTS, TAXES,
DEPRECIATION AND AMORTIZATION ("adjusted EBITDA") Earnings before
interest, stock-based compensation costs, taxes, depreciation, and
amortization (adjusted EBITDA) is a measure that has no
standardized meaning prescribed by International Financial
Reporting Standards (IFRS). It is therefore considered to be
a non-IFRS measure. Accordingly, the measure may not be
comparable to similar measures presented by other issuers.
This measure is presented and described in this management report
in order to provide shareholders and potential investors with
additional information regarding the company's liquidity and
ability to generate funds to finance its activities. For the first
quarter of fiscal year 2011, adjusted EBITDA is $390,000 compared
to $49,000 for the same period of the previous fiscal year. A
higher level of sales of nearly $600,000 for the period compared to
the previous year and lower levels of introductory discounts
offered to new customers mainly explain this increase. In
order to encourage new distributors offering high potential volume
to join Novik, favourable terms were granted to them last year to
allow them to stock our products in their warehouses. This
measure promoted the receipt of large orders in the first quarter
of the previous fiscal year in return for this introductory
discount but had reduced gross margin on these sales. NET LOSS The
company's net loss for the first quarter of fiscal year 2011
amounts to $77,000 compared to a net loss of $275,000 for the same
quarter of the previous fiscal year. The company generally
shows a net loss in its first quarter of each fiscal year.
This situation is explained by cyclical fluctuations, as the first
quarter is normally a quarter signifying a slow-down in sales
compared to the second and third quarter. This reduction in net
loss is directly in line with the same elements previously
explained: the increase in the sales volume combined with the
decrease in introductory discounts offered to major customers last
year. These financial earnings are directly related to our
desire to improve the company's profitability. OUTLOOK Novik's
financial performance in the first quarter of the current year is
encouraging; thanks to the growth of its sales, cost containment,
and reduction of its net loss. The posted results are
directly in line with the objectives set at the beginning of the
year: an increase in sales and better profitability compared to
last year. The current orders on hand and the current discussions
with our Canadian, US, and international distributor allow us to
remain positive about achieving our 2011 sales growth
objective. However, we must be vigilant in the coming months
in order to reach our financial objective of obtaining better
profitability than last year. The significant increase in the
cost of raw materials observed since the beginning of the fiscal
year as well as the level of the Canadian dollar in relation to the
US dollar bring external obstacles that must be addressed. An
increase in the price of our products already announced to our
customer for May 2011, the search for and purchase of alternative
materials at a lower cost without compromising the quality of our
products, and the establishment of actions aiming to improve our
production costs are measures already taken to react to these
obstacles. We are also making significant efforts with our
team members to bring about additional actions necessary to lessen
these negative trends. OTHER Following the annual general meeting
held this morning, the directors have approved the grant of
1,175,000 stock options available to directors and certain officers
at $0.36 a share. About NOVIK Novik (NVK) is a leader in the
design, manufacturer and distribution of innovative polymer
exterior siding, roofing coverings and accessories that replace
traditional materials such as stone, brick or wood shingles.
These products target the world-wide residential and commercial
construction industry. Forward-looking statements contained in this
press release involve known and unknown risks, uncertainties
or other factors that may cause actual results, performance or
achievements of the company to be materially different from any
future results, performance or achievements expressed or implied by
such forward-looking statements. To view this
news release in HTML formatting, please use the following URL:
http://www.cnw.ca/en/releases/archive/May2011/19/c6139.html p
bSource : /b /p p Novik inc. /p p bFor further information/b:
/p p Michel Gaudreaubr/ Presidentbr/ Tel. : (418) 878-6161br/
E-mail : a
href="mailto:micgau@novik.com"micgau@novik.com/a /p p Pascal
Bouthotbr/ Vice-President, Financesbr/ Tel. : (418) 878-6161br/
E-mail : a
href="mailto:pasbou@novik.com"pasbou@novik.com/a /p
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