Divcom Announces Results for the Year Ending November 30, 2007



    MONTREAL, Feb. 29 /CNW Telbec/ - Divcom Lighting Inc. (TSX: DVQ)
("Divcom" or the "Corporation") announced today results for its operations for
the year ending November 2007. Revenues for the year end November 30, 2007
were $36.9 million compared to $41.3 million for the year ended November 30,
2006, or a decline of 11%. Canadian revenues rose by 5% to $18.6 million from
$17.7 million for the same period last year while U.S revenues declined
significantly by 23% to $18.4 million from $23.7 million for the same period
in the prior year. While the increase in Canadian revenues is attributed
directly to the internal growth of its energy-efficient lighting products, the
significant drop in the US revenues is directly attributable to the current
economic conditions prevailing in the US as well as the strengthening of the
Canadian dollar.
    Divcom's Canadian gross margins stood at 36% while those in the US
declined to 29%. Net loss for the year was $5.7 million ((0.14) per share)
compared to a net profit of $44 thousand (0.001 per share) for the same period
in the prior year.
    Included in the net loss is $3.4 million in non-cash amortization and
goodwill impairment as well as a $1.1 million write-down of inventories.
Inventories were written-down for products for which manufacturing was
transferred to Asia to obtain economies of scale, as well as non-energy
efficient products which are in the process of being legislated out of the
market.
    "As much as this has been a difficult year for the Corporation in the
midst of the economic downturn in the US as well as the wild upward swings in
the Canadian dollar, we note that our decrease in cash for the year ended
November 30, 2007 was only $34,000, signifying that management has made every
effort to maintain its balance sheet and sustain its liquidity going forward
and will continue to do so." said Mr. Aslam Khatri, President and CEO.
    "While our US operations continue to feel the effects of the US economy,
Divcom's Canadian operations have grown. In addition to a 5% internal growth
in Canada for 2007, the company will further gain revenue through its recently
announced multi-million dollar energy efficient under-the-cabinet program for
a large DIY to be rolled out in the spring 2008. In addition Divcom also
introduced and began taking orders for its outdoor LED products. As these
products are gaining popularity in Canada a big push is being made by the
Corporation to present this program in the US where despite the current
economic condition, energy-efficient lighting demands are expected to
increase. Presently Divcom is structured around two segments of the business:
retail and commercial. While the Corporation began its operations mainly in
commercial lighting, its retail segments grew at a faster pace due to
strategic acquisitions. Divcom has now successfully integrated these important
units and on a stand-alone basis these units will continue to provide growth
opportunities in the energy-efficient sector.
    Commercial lighting growth is expected to be the main focus of the
Company going forward on a long-term basis. To this extent Divcom has
completed a catalogue of energy-efficient products which will be unveiled in
Las Vegas in spring 2008.
    Divcom continues to execute its long-term strategy of growth but given
the economic circumstances for now Divcom will focus on its short-term
strategy which is to:

    - Generate cash
    - Continue to reduce overhead spending.
    - Capitalize on the strength of the lighting market
    - Continue to focus on energy-efficient lighting
    - Increase its sales efforts in Canada

    Divcom also announced that Mr. Vitale Santoro has resigned from its board
of directors, and thanked him for his service.

    About Divcom

    Divcom is a rapidly growing North American manufacturer of
architecturally designed energy-efficient and "eco-friendly" lighting products
for retail and commercial markets across Canada and the United States. The
Company's strategy is to seize new business opportunities in the lighting
industry and constantly improve its energy efficient product lines. Divcom's
products are distributed through its extensive North American marketing
network which includes more than 2,000 distributors and agents. The Company's
products are used for residential houses, public roads and tunnels, as well as
commercial, industrial and custom made lighting projects. For further
information, please visit www.divcomlighting.com

    Forward-Looking Statements

    Certain statements made in this press release and other statements
regarding our strategy, future operations, financial position, future
revenues, projected costs, prospects, plans and objectives other than
statements of historical facts are forward-looking statements. Such statements
are usually preceded by words such as "will", "believe" or "expects". We
cannot guarantee that we actually will achieve the results, plans, intentions
or expectations disclosed in our forward-looking statements and you should not
place undue reliance on them. There are a number of important factors that
could cause our actual results to differ materially from those indicated or
implied by forward-looking statements including, but not limited to, the
impact of any special items or of any dispositions, monetization, mergers,
acquisitions, business combinations or other transactions that may be
announced or that may occur after the date hereof. Risks that could cause
actual results to differ materially from those projected include, but are not
limited to, the effect of general economic conditions, decreases in demand for
the Company's products, increases in costs of raw materials, changes in the
relative value of the Canadian and U.S. currencies, and fluctuations in
selling prices. For a description of material risk factors, please refer to
the Company's annual information form and to our periodic filings with
securities regulatory authorities, which are available on SEDAR at
www.sedar.com. These factors should be read as being applicable to all related
forward-looking statements wherever they appear in this press release. The
information in this press release, including any forward-looking statements,
is provided as of the date of this release and should not be relied upon as
representing our estimates as of any subsequent date. We do not assume any
obligation to update or revise any forward-looking statements except as
required by law, whether as a result of new information, future events or
otherwise.


    
    Divcom Lighting Inc.
    Consolidated Balance Sheets
    As at November 30, 2007 and 2006
    (Tabular amounts in thousands of dollars)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                            2007        2006
                                                               $           $
    ASSETS

    Current assets
      Cash and cash equivalents                               49          83
      Accounts receivable                                  6,804       7,637
      Inventories                                          6,452       8,017
      Income taxes receivable                                451          80
      Investment tax credits receivable                      295         509
      Prepaid expenses                                       582         867
      Future income taxes                                    363         813
    -------------------------------------------------------------------------
    Total current assets                                  14,996      18,006

    Deferred financing costs                                 257         336
    Loan receivable                                          422         374
    Future income taxes                                    2,329       1,026
    Property, plant and equipment                         10,449      10,953
    Definite-life and indefinite-life intangibles          3,266       3,513
    Goodwill                                               4,684       6,262
    -------------------------------------------------------------------------
    Total assets                                          36,403      40,470
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    LIABILITIES AND SHAREHOLDERS' EQUITY

    Current liabilities
      Bank indebtedness                                    8,538       6,798
      Accounts payable and accrued liabilities             5,343       6,027
      Convertible debenture                                  250           -
      Current portion of loan payable                        121         122
      Current portion of long-term debt                      296         568
      Current portions of balances of purchases payable      681         533
    -------------------------------------------------------------------------
    Total current liabilities                             15,229      14,048

    Convertible debenture                                      -         250
    Loan payable                                             101         252
    Long-term debt                                         7,429       6,966
    Balances of purchases payable                            334         760
    Future income taxes                                    1,165       1,386
    -------------------------------------------------------------------------
    Total liabilities                                     24,258      23,662
    -------------------------------------------------------------------------

    Shareholders' equity
      Capital stock                                       15,862      15,026
      Contributed surplus                                    768         607
      (Deficit) retained earnings                         (4,485)      1,175
    -------------------------------------------------------------------------
    Total common shareholders' equity                     12,145      16,808
    -------------------------------------------------------------------------
    Total common shareholders' equity and liabilities     36,403      40,470
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Divcom Lighting Inc.
    Consolidated Statements Of Operations And Deficit
    For the Years Ended November 30, 2007 and 2006
    (Tabular amounts in thousands of dollars)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                                    Restated
                                                            2007        2006
                                                               $           $

    Sales                                                 36,880      41,364
    -------------------------------------------------------------------------

    Operating
    Expenses
      Cost of goods sold                                  26,460      25,945
      Foreign exchange                                       265          41
      Administrative and selling expenses                 11,592      11,634
      Restructuring costs                                      -         762
      Stock-based compensation                               125          94
      Amortization and impairments                         3,531       1,444
      Interest and bank charges                            1,000         527
      Interest on long-term debt                             884         839
    -------------------------------------------------------------------------
                                                          43,857      41,286
    -------------------------------------------------------------------------
    (Loss) earnings before (recovery of) provision
     for income taxes                                     (6,977)         78
    -------------------------------------------------------------------------

    (Recovery of) provision for income taxes
      Current                                               (283)        360
      Future                                              (1,034)       (326)
    -------------------------------------------------------------------------
                                                          (1,317)         34
    -------------------------------------------------------------------------
    Net (loss) earnings                                   (5,660)         44
    Retained earnings, beginning of the year               1,175       1,143

    Premium on redemption of shares                            -         (12)
    -------------------------------------------------------------------------
    (Deficit) retained earnings, end of year              (4,485)      1,175
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------

    (Loss) earnings per share

    Net (loss) earnings per common share - basic         (0.1379)     0.0010

    Net (loss) earnings per common share - fully
     diluted                                             (0.1379)     0.0010

    Weighted average common shares outstanding
      Shares used in per-share calculation - basic        41,054      43,347
      Shares used in per-share calculation - fully
       diluted                                            41,054      45,118

    -------------------------------------------------------------------------
    -------------------------------------------------------------------------


    Divcom Lighting Inc.
    Consolidated Statements Of Cash Flows
    For the Years Ended November 30, 2007 and 2006
    (Tabular amounts in thousands of dollars)
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
                                                            2007        2006
                                                               $           $

    Cash flows from operating activities
      Net (loss) earnings                                 (5,660)         44
    Items not requiring an outlay of cash:
      Amortization and impairment                          3,531       1,484
      Future income taxes                                 (1,034)       (326)
      Stock based compensation                               125          94
    -------------------------------------------------------------------------
                                                          (3,038)      1,296
      Net change in non-cash assets and liabilities
       related to operations                               1,812        (286)
    -------------------------------------------------------------------------
    Cash flows from operating activities                  (1,226)      1,010
    -------------------------------------------------------------------------

    Cash flows from investing activities
      Loan receivable                                        (48)       (871)
      Acquisition of property, plant and equipment          (966)     (2,005)
      Acquisition of definite-life intangibles               (28)        (51)
      Deferred financing costs                               (95)       (121)
      Business acquisition, net of cash                        -      (5,155)
      Adjustment to business acquisitions (net of cash)        -         (36)
    -------------------------------------------------------------------------
    Cash flows from investing activities                  (1,137)     (8,239)
    -------------------------------------------------------------------------

    Cash flows from financing activities
      Bank indebtedness                                    1,740       3,565
      (Repayment of) proceeds from loan payable             (152)        374
      Proceeds from long-term debt                         3,014       4,488
      Repayment of long-term debt                         (2,823)       (212)
      Repayment of balances of purchases payable            (278)     (1,298)
      Redemption of capital stock                            (94)       (225)
      Issuance of capital stock                              922           -
    -------------------------------------------------------------------------
    Cash flows from financing activities                   2,329       6,692
    -------------------------------------------------------------------------

    Net change in cash and cash equivalents                  (34)       (537)
    Cash and cash equivalents, beginning of year              83         620
    -------------------------------------------------------------------------
    Cash and cash equivalents, end of year                    49          83
    -------------------------------------------------------------------------
    -------------------------------------------------------------------------
    




For further information:

For further information: Aslam Khatri, President and CEO, Divcom
Lighting, (514) 693-2117; Deric Vourantonis, C.A., VP Finance, Divcom
Lighting, (514) 693-2117

Organization Profile

DIVCOM LIGHTING INC.

More on this organization


Custom Packages

Browse our custom packages or build your own to meet your unique communications needs.

Start today.

CNW Membership

Fill out a CNW membership form or contact us at 1 (877) 269-7890

Learn about CNW services

Request more information about CNW products and services or call us at 1 (877) 269-7890