Novik announces its 2009 annual financial results

                         2009 FISCAL YEAR HIGHLIGHTS

    - 16% increase in sales in North America
    - 24% increase in sales in fourth quarter 2009
    - 25% decrease in sales to $15,100,000 explained by decreased sales in
    - Large order valued at $2,300,000 received during fourth quarter 2009
      from a new American distributor
    - Launch of five new exterior coverings in 2009, creating new business
    - Net loss of $776,000 compared with a net profit of $875,000

QUEBEC CITY, March 25 /CNW Telbec/ - Novik inc. (NVK) releases today its results for the fourth quarter and the fiscal year ended December 31, 2009. All amounts are expressed in Canadian dollars unless otherwise indicated.

    NOVIK inc.
    for the fiscal years ended
     December 31, 2009 and 2008
    (in thousands dollars,                           12 months     12 months
     except for amounts per share)                      period        period
                                                          2009          2008
                                                             $             $
    Operating results

    Revenues                                            15,061        20,116
    Earnings before depreciation, amortization,
     financial expenses, stock-based compensation
     costs and income taxes                                520         3,937
    Net earnings (loss)                                   (776)          875
    Basic and diluted net earnings (loss) per share     (0.016)        0.019

    Financial position

    Total assets                                        25,314        25,583
    Working capital                                      1,457         3,175
    Total debt                                          12,245        12,019
    Total liability                                     14,496        14,141
    Shareholders' equity                                10,818        11,442
    Shareholders' equity per share                        0.22          0.24

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

Mr. Michel Gaudreau, President, announces Novik's annual financial results for 2009. He notes that "these financial results do not demonstrate the breakthroughs made in the North American market. The economic difficulties of some of our American competitors, combined with the introduction of new exterior covering products in summer 2009, allowed Novik to gain significant market shares in 2009. Despite the credit crisis seen primarily in the United States, Novik managed to increase its sales in this country. Novik was able to meet and finalize important agreements with major players in the US market during the year, putting Novik in a good position for 2010 as well as for the upcoming economic recovery. On the Canadian side, Novik also managed to increase its sales, mainly in Quebec and the Maritime provinces. The Novexpert pilot program tested in Quebec in 2009 was positive. This program to raise awareness of our products with installers, contractors, and end-consumers put Novik in good position in this province. We will continue this program in this territory and debut it in 2010 in targeted territories in the rest of Canada and on the east coast of the US."

Mr. Gaudreau adds that "it is true that we have suffered a sharp decline in our sales in Eastern Europe. However, we believe that the worst is over and foresee a return to growth in this territory with the addition of new distributors."


During fiscal year 2009, the company recorded revenues of $15.1M versus $20.1M for 2008. Mr. Gaudreau explains that "this 25% decrease is primarily related to the sharp drop in European deliveries, given the current difficult economic environment, especially in Russia. Novik's European sales decreased by nearly $6.9M because of the difficulty that our distributors had in selling their high level of inventory purchased in the final quarter of 2008. They subsequently minimized their purchases of Novik products by adopting tighter management justified by less widespread demand for the construction materials in their markets. Our distributors are still ready to support our product line, and our new distributors on this continent are still expressing interest in selling our products. Recent visits to Europe have been productive and will result in the signing of new distributors for fiscal year 2010; these new distributors should contribute to regaining a level of growth in this market."

Mr. Gaudreau is proud to announce that "North American sales in fiscal year 2009 were up by nearly $1.8 M compared with the same period of the previous fiscal year, an increase of 16%. This sales growth in this territory is positive compared with the results of manufacturers in our industry sector. They report substantial decreases in their revenue in North America, down an average of nearly 25% compared with the previous year. Our marketing efforts since the beginning of the year in this territory, especially with our Novexpert network in Quebec, the financial difficulties of our competitors, and our more diversified range of products since the introduction of three new, very unique products explain this success. We gained significant market shares during the year on two levels: in the polymer covering sector and, as a very positive point, in the global exterior covering market."

Revenues for fourth quarter 2009 amounted to $3.4 M compared with $2.7 M during fourth quarter 2008. Mr. Gaudreau indacates that "this 24% increase in sales is the only quarter in 2009 in which our sales were greater than the same period of the previous year. The increase in sales on the North American market contributed to reaching this level of sales. The introduction of three new exterior coverings allowed Novik to generate higher sales in this period. During this period, we also obtained large orders for these products from existing customers and new major distributors, and they are expected to be delivered in the first months of fiscal year 2010."


EBITDA adjusted 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, this measure may not be comparable to similar measures presented by other issuers. This measure is presented 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 fiscal year ended December 31, 2009, adjusted EBITDA amounted to $520,000 compared with $3,781,000 for the previous fiscal year. Adjusted EBITDA is lower compared with the same period of the previous year in light of the lower volume of business combined with an increase in our fixed cost structure, as explained above, and higher expenditures in Novik's selling expenses.


The net loss for fiscal year 2009 was $776,000 compared with a net profit of $875,000 for the same period of the previous fiscal year. The decrease in sales combined with a decrease in gross margin as a percentage and the increase in selling expenses compared with the previous year were greater than the larger exchange gains recorded in fiscal year 2009 versus 2008.


Mr. Gaudreau ends by adding "despite the current global economic situation, Novik's return to sales growth bodes well for the next fiscal year. Expected sales for first quarter 2010 should be up by nearly 30% compared with the same period of the previous year. In addition, the backlog for the second quarter is greater than the previous year as at today, thus providing a positive outlook for the next year.

It is certainly too soon to predict the total growth expected for 2010; however, the present opportunities are off to a good start in 2010. The receipt of a $2.3 M order in December 2009 from a major distributor in the United States, the introduction of three new exterior covering products through a major customer placing an order valued at more than $300,000, the resounding success of our new exterior covering products in the North American market permitting the signing of new distributors, current discussions with new international distributors, the success obtained in 2009 in Quebec with our Novexpert program, and the enthusiasm recently seen in this province at trade fairs are all examples that explain our positive outlook for sales.

However, we must be vigilant in 2010 about the management of our gross margin, as the current Canadian exchange rate against the US dollar and the current cost of our raw materials act negatively on it. The search for new suppliers, the search for new revenue while preserving the quality of our products, and the continued pursuit of improved productivity in our operations are on the agenda in our strategic meetings in order to decrease this negative pressure. In addition, an increase in our sales prices by around 8% for the second quarter has already been communicated to our customers. Lastly, a greater volume of sales in 2010 compared with 2009 could allow Novik to benefit from attractive economies of scale.

In the expected economic environment, we will focus on prudent management of our fixed asset and marketing expenditures. In addition, we will be sure to maximize efforts in line with our strategic objectives in order to achieve concrete results to ensure Novik's return to profitability as quickly as possible."


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.

The TSX Venture Exchange and its regulatory service provider (as defined by TSX Venture Exchange policy) are not liable for the relevance or accuracy of this press release.

The forward-looking statements in this press release involve known and unknown risks, uncertainties and other factors which may materially change the actual results, performance, or achievements of Novik from any future results, performance, or achievements expressed or implied by these statements.

%SEDAR: 00022807EF

SOURCE Novik Inc.

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

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