Sales increased by 52%



    
                       SECOND QUARTER 2008 HIGHLIGHTS

    - Sales increase by 52% to $6,772,000
    - Net income increase of 160% to $811,000 compared with $311,000
    - EBITDA increased in excess of 85% to $1,734,000
    - Fifth consecutive year-over-year quarter of sales growth
    - Six months sales growth of 49% to $10,154,000
    - 9% return on sales for the first six months compared with 1%
    

    QUEBEC CITY, Aug. 27 /CNW Telbec/ - Novik inc. (NVK) releases today its
results for the second quarter of fiscal year 2008. All amounts are expressed
in Canadian dollars unless otherwise indicated.

    
    -------------------------------------------------------------------------
    NOVIK inc.
    for the periods ended
     June 30, 2008 and 2007
    (in thousands dollars,           Second      Second    Year to   Year to
     except for amounts per share)  quarter     quarter       date      date
    -------------------------------------------------------------------------
                                       2008        2007       2008      2007
    -------------------------------------------------------------------------
                                          $           $          $         $
    Operating results

    Revenues                          6,772       4,470     10,154     6,826
    Gross margin                      2,868       1,825      4,098     2,644
    Income before depreciation,
     stock-based compensation,
     financial expenses and
     income taxes                     1,734         932      2,154     1,066
    Net income                          811         311        916        98
    Basic and diluted net income
     per share                        0.018       0.007      0.020     0.002
    -------------------------------------------------------------------------


    ----------------------------------------------------
    NOVIK inc.
    (in thousands dollars,          June 30,    Dec. 31,
     except for amounts per share)     2008        2007
    ----------------------------------------------------
                                          $           $

    Financial position

    Total assets                     21,191      16,250
    Working capital                   2,272       2,186
    Total debt                        8,222       5,291
    Total liability                  10,921       7,062
    Shareholder's equity             10,270       9,188
    Shareholder's equity
     per share                         0.22        0.20
    ----------------------------------------------------

    Number of shares
     outstanding                 45,799,429  45,799,429
    ----------------------------------------------------
    

    REVENUES

    During the course of the second quarter of fiscal year 2008, Novik
recorded $6.8M in revenue compared with $4.5M during the same quarter of the
previous fiscal year. Mr. Gaudreau, President & CEO, stated that "this strong
growth of 52% can be attributed to Novik's international success".
International shipments amounted to nearly $3.6M during second quarter 2008,
compared with $0.7M for the same period of the previous fiscal year.
Deliveries of our new cedar plank to a major European distributor began during
the second quarter. Mr. Gaudreau emphasized that "these deliveries are part of
the new contract signed with this distributor providing sales on the order of
$7M during the next twelve months starting in June 2008. In addition, the
presence of distributors in new countries has allowed Novik to grow more
significantly. This success is explained by the wide variety of exterior wall
covering and roofing products and their innovative character. Given Novik's
current success on the international market, the company is continuing to
explore new territories in order to maximize product potential on a global
scale. As of today, new distributors are already in place in new countries,
and deliveries have been made to them, resulting in additional sales for the
third quarter."
    Mr. Gaudreau is proud to point out that "this growth during the second
quarter of fiscal year 2008 has enabled Novik to post a fifth consecutive
year-over-year quarter of increased sales. The diversification of Novik's
sales on a global level is an important contributor to this success, and this
growth is expected to continue for the coming quarters. As mentioned in a
recent press release, Novik expects to post growth of more than 40% in 2008
compared with the previous fiscal year."
    Novik's cumulative sales for the six-month period amounted to $10.2M,
compared with $6.8M for the same period of the previous year. This 50% growth
is explained by the aforementioned items.

    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 second quarter of fiscal year 2008, adjusted EBITDA amounted to
$1.7M, compared with $0.9M for the same period of previous fiscal year. EBITDA
is around 90% greater than in second quarter 2007. This significant increase
is explained in large part by the growth in sales, allowing Novik to benefit
from a better distribution of its resources. A $2.3M increase in sales during
the second quarter compared with the same period of the previous fiscal year
brought about a $0.8M increase in adjusted EBITDA, i.e. a return of 35%. This
return is proof that the company is showing great potential if the growth
continues at the current pace.
    For the six-month period ended June 30, 2008, the adjusted EBITDA
amounted to $2.2M compared with $1.1M for the same period of previous fiscal
year.

    NET INCOME

    The company's net income for the second quarter of fiscal year 2008
amounted to $811,000, compared with a net income of $311,000 for the same
quarter of the previous fiscal year. This significant improvement is directly
linked to the increased sales. A 12% return on sales after taxes is an
excellent result, especially in a more difficult North American industry.
    For the six-month period ended June 30, 2008, net earnings were $916,000,
compared with net earnings of $98,000 for the same period of the previous
fiscal year. These earnings constitute an increase of more than $800,000
compared with the same period of the previous year versus an increase in sales
of $3,300,000 by comparing the same periods. These financial results are
extremely encouraging for the company's future.

    OUTLOOK

    Novik continues to demonstrate excellent growth at all financial levels:
sales, gross margin as a percentage of sales, adjusted EBITDA, and net
earnings. This success is explained in large part by the growing popularity of
Novik products in new territories. The marketing strategy has been successful
on the international level: not only because new distributors in new countries
are signing on, but also because of the volume of orders received from these
customers. Given this success, Novik is continuing to put heavy emphasis on
the promotion of its innovative products in new markets. Sales trips are
already currently planned to visit potential distributors and to foster the
continuation of our growth.
    This rapid growth also explains the important strategic fixed asset
acquisition plan set for the current fiscal year. This strategic plan, valued
at $7,000,000, is essential for continuing the current rate of growth and
meeting the demand of our customers. The extension of the plant will allow
Novik to bring sales capacity to an estimated $100,000,000. Future investments
should then be restricted to new injection and painting equipments as well as
moulds for new innovative products. The new section of the plant is already
operational, while most of the equipment and moulds are at work.
    Achieving the current financial results is only the beginning, as the
current order book is already anticipating a sixth consecutive quarter of
sales growth compared with the same period of the previous fiscal year. The
current marketing efforts, not only on the international market but also on
the Canadian and American territories, are part of our focus. The development
of new innovative products and the constant improvement of our current
products are also priorities. Our research and development team are working
with Novik's president to finalize two products: a new stone exterior covering
and a new cedar roof covering. These two promising products will be offered by
the end of 2008.

    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.

Organization Profile

Novik 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