Nine month profits up 94%

  • Quarterly and year to date (YTD) sales of $7,001,000 and $20,506,000
  • 6% sales growth for the first nine months
  • Third quarter gross margin increased from 42% to 45%
  • 22% improvement in Adjusted EBITDA to $3,300,000 compared with $2,700,000 for the first nine months in 2010
  • Adjusted EBITDA to sales of 16% versus 14% for the first nine months
  • 94% improvement in YTD net profit of $924,000 versus last year's net profit of $477,000
  • Working capital increased by $1,340,000 and total liabilities decreased by $1,174,000 since December 2010

QUEBEC CITY, Nov. 7, 2011 /CNW Telbec/ - Novik Inc. (TSXV: NVK) is pleased to release its results for the third quarter and first nine months of fiscal year 2011.

 
NOVIK inc.
for the periods ended September 30, 2011 and 2010
(in thousands dollars, except for amounts* per share)
  Period of
three months
2011
  Period of
three months
2010
  Period of
nine months
2011
  Period of
nine months
2010
    $   $   $   $
Operating results                
 
Revenues   7,001   7,839   20,506   19,384
Gross margin   3,164   3,314   8,120   7,453
Profit before depreciation, stock-based compensation, financial expenses and income taxes   1,186   1,576   3,305   2,687
Net profit   552   743   924   477
Basic and diluted net profit per share   0.011   0.015   0.019   0.010

 
NOVIK inc.        
    September 30   December 31
(in thousands dollars, except for amounts* per share)   2011   2010
    $   $
Financial position        
         
Total assets   24,431   24,372
Working capital   3,526   2,186
Total long-term financial liabilities   9,362   8,960
Total liabilities   11,898   13,072
Shareholders' equity   12,532   11,301
Shareholders' equity per share   0.26   0.23
 
Number of outstanding shares   48,470,858     48,470,858
  • All amounts are expressed in Canadian dollars unless otherwise indicated.

Mr. Michel Gaudreau, Chief Executive Officer of Novik commented "I am pleased that Novik's profit in the first nine month of fiscal 2011 is almost double that of the previous year."  Mr. Gaudreau also pointed out that "at the beginning of the year, we established clear objectives in order to improve our profits.  Since then our team members have been focused on improving our production and organizational cost structure.  We have also been able to maintain our gross margin at an appropriate threshold. We will remain vigilant in our focus on margin improvement in order to preserve our current achievements and continue the efforts in this direction."

SALES
The general slowdown across the construction and exterior siding sectors in North America resulted in third quarter sales declining to $7.0 M from the $7.8 M achieved during the same quarter of the previous year.  This decrease in sales of around 10% was the first reduction in Novik's quarter-over-quarter sales since September 2009. Novik continued to outperform the industry however, with industry sources indicating a decline in the quarter of approximately 16% and 5% in Canada and USA respectively. Novik's sales in the international markets remained stable.

Mr. Gaudreau stated that "despite this slight slowdown, Novik is making solid progress in our business development activities.  Our sales team is working with potential major customers that have expressed an interest in carrying Novik's product line.  These customers are attracted to Novik's innovative and complementary products because they offer the chance to gain greater penetration within the customers end markets. In fact, we are at the market test stage with certain major accounts."

Novik's cumulative sales for the first nine months of 2011 amount to $20.5 M compared with $19.4 M for the same period of the previous year, an increase of 6%.  This sales level represents a record in Novik's history after the first nine months of the fiscal year.

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 third quarter, Adjusted EBITDA amounts to $1.2 M compared with $1.6 M for the same period of the previous year.  Increased selling expenses and lower level of sales of nearly $800,000 from the previous period were mainly responsible for this decrease.

For the nine month period ended on September 30, 2011, Adjusted EBITDA increased 22% or $600,000 to $3.3 M compared with $2.7 M for the same period of the previous year.  The Adjusted EBITDA margin percentage increased by 2% to 16% versus 14% during the period.

NET PROFIT
The company's net profit for the third quarter of fiscal year 2011 amounts to $552,000 compared with $743,000 for the same quarter of the previous fiscal year.  This decrease in net profit is due to the same factors previously explained in the Adjusted EBITDA section namely, the increase in selling expenses, combined with the decrease in the sales.

For the nine month ended on September 30, 2011, net profit is $924,000 compared with a net profit of $477,000 for the same period of the previous fiscal year, representing a 94% improvement from the previous year and is the result of management's focus to maximize profitability.

OUTLOOK
Mr. Gaudreau concluded that:

"Despite experiencing a decrease in sales in the third quarter, we continue to outperform the industry, and the 2011 first nine months results represent growing sales, increasing Adjusted EBITDA margin by 2% and Net Income improvement of almost 100% over the prior year. This shall improve the value of our company.

The final quarter of the current fiscal year seems to be off to a good start compared with last year.  The quarter sales billed since early October 2011, the current level of orders in hand, as well as the current discussions with our present and potential customers indicates that we are expecting to at least meet last year's sales.  In addition, we have begun performing subcontracting work and are in discussions to obtain other assignments in order to utilize our equipment in shoulder periods."

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. 

SOURCE Novik Inc.

For further information:

Source :   

Novik inc.

For further information:

Michel Gaudreau
President
Tel. : (418) 878-6161
E-mail : micgau@novik.com

Pascal Bouthot CA
Vice-President, Finances
Tel. : (418) 878-6161
E-mail : pasbou@novik.com

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Novik Inc.

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