Novik announces its 2009 first quarter financial results



    
                        FIRST QUARTER 2009 HIGHLIGHTS

    - Revenues decrease by 24% to $2,645,000
    - Gross margin stable at 36%
    - Net loss of $627,000 compared with a net income of $105,000
    

    QUEBEC CITY, May 28 /CNW Telbec/ - Novik inc. (NVK) releases today its
results for the first quarter of fiscal year 2009. All amounts are expressed
in Canadian dollars unless otherwise indicated.

    
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    NOVIK inc.
    for the periods ended March 31, 2009 and 2008
    (in thousands dollars, except                          First       First
     for amounts per share)                              quarter     quarter
    -------------------------------------------------------------------------
                                                            2009        2008
    -------------------------------------------------------------------------
                                                               $           $
    Operating results

    Revenues                                               2,645       3,382
    Gross margin                                             965       1,229
    Income before depreciation, stock-based
     compensation, financial expenses and income
     taxes                                                    11         420
    Net income (loss)                                       (627)        105
    Basic and diluted net income (loss) per share         (0.013)      0.002
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    NOVIK inc.

    (in thousands dollars, except                       March 31,    Dec. 31,
     for amounts per share)                                 2009        2008
    -------------------------------------------------------------------------
                                                               $           $
    Financial position

    Total assets                                          26,852      25,583
    Working capital                                        2,204       3,175
    Total debt, excluding accounts payable and
     accrued expenses                                     13,531      12,019
    Total liability                                       16,037      14,141
    Shareholder's equity                                  10,814      11,442
    Shareholder's equity per share                          0.22        0.24
    -------------------------------------------------------------------------

    Number of shares outstanding                      48,470,858  48,470,858
    -------------------------------------------------------------------------
    

    During the course of the first quarter of fiscal year 2009, Novik
recorded revenues of $2.6M, compared to $3.4M during the same quarter of the
previous fiscal year. Mr. Michel Gaudreau, President & CEO, explains that
"this 24% decrease can be attributed to an important factor: the decline in
deliveries on the international market, more specifically in Europe. In fact,
our European distributors have not profited with the same intensity of our
"booking" program of the first quarter compared to the same period of the
previous year. They preferred being safer in their inventory management of our
products, given the economic setting in their territories. This program
provides for the sale of our products during calmer periods in order to
maintain our production level at more beneficial prices and payment terms."
    Mr. Gaudreau adds on a positive note "North American sales were stable
compared to the same period of the previous year. Although several
manufacturers in the exterior siding industry are facing a significant
decrease in their sales in this market, Novik has managed to maintain its
level of sales. Better targeted marketing efforts, competitors experiencing
financial difficulties, and our innovative, diversified product line explain
this stability despite an industry highly impacted by the current economic
situation."
    Despite its presence in an industrial slowdown, Mr. Gaudreau emphasises
that "Novik continues to deploy significant marketing efforts to encourage
continued growth of its sales. Novik has never been in a better position,
thanks to competitors facing financial difficulties and a more diversified,
innovative product line. These efforts are currently bringing about
interesting discussions with several players, including major distributors and
manufacturers. In fact, meetings held since the last quarter of the fiscal
year 2008 have allowed Novik to sign agreements with new very promising
customers for the future. The signing of an exclusivity contract for a
covering product already offered on the market to serve a major US customer
over a three-year period is an example of an agreement offering a lot of
potential for Novik. In addition, our positioning strategy in Quebec through
our Novexpert pilot program is currently meeting our expectations and is
currently generating a lot of interest from entrepreneurs and consumers."

    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 Canadian generally accepted accounting
principles. It is therefore considered to be a non-GAAP measure in Canada.
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 2009, adjusted EBITDA amounted to
$11,000 compared to $420,000 for the same period of the previous fiscal year.
This decrease is explained in large part by the company's decreased sales and
higher selling expenses on marketing programs targeting Novik products.

    NET LOSS

    The company's net loss for the first quarter of fiscal year 2009 amounted
to $627,000, compared to a net income of $105,000 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. The decreased
volume of sales compared to the same period of the previous year and the
increased selling expenses explain these financial results, amplified by
unrealized foreign exchange losses of nearly $200,000.

    OTHER

    Following the annual general meeting held this morning, the directors
have approved the grant of 575,000 stock options available to directors and
certain officers at $0.32 a share.

    About NOVIK

    Novik (NVK) is a leader in the design, manufacturer and distribution of
innovative polymer exterior siding and roofing coverings 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.
    %SEDAR: 00022807EF




For further information:

For further information: Michel Gaudreau, President, (418) 878-6161,
micgau@novik.com; Pascal Bouthot, Vice-President, Finances, (418) 878-6161,
pasbou@novik.com; Source: Novik inc.

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