Novik releases its 2006 annual results

                         2006 FISCAL YEAR HIGHLIGHTS

    - Sales increased by 8% over 2005 to a record level of $12.2m
    - International sales up 170% compared to 2005
    - June 2006 launch of polymer imitation slate and clay roof panels
    - Distribution agreement with Alcoa in May 2006 for our exterior

    QUEBEC CITY, April 25 /CNW Telbec/ - Novik inc. (NVK) releases today its
results for the fourth quarter and the fiscal year ended December 31, 2006.
All amounts are expressed in Canadian dollars unless otherwise indicated.

    NOVIK inc.

    for the fiscal years ended
     December 31, 2006 and 2005
     (in thousands dollars,
      except for amounts          Fourth      Fourth   12 months   12 months
      per share)                 quarter     quarter      period      period
                                    2006        2005        2006        2005
                                       $           $           $           $
    Operating results

    Revenues                       1,809       2,320      12,170      11,296
    Income (loss) before
     depreciation, financial
     expenses, stock-based
     compensation costs and
     income taxes                   (524)       (552)        523         670
    Net loss                        (644)       (762)       (957)       (795)
    Basic and diluted net
     loss per share               (0.015)      (0.03)     (0.024)      (0.03)

    Financial position

    Total assets                                          16,442      15,866
    Working capital                                        2,203       2,318
    Total debt, net of cash                                6,055       7,667
    Total liability                                        7,793       8,748
    Shareholders' equity                                   8,648       7,118
    Shareholders' equity per share                          0.19        0.18

    Number of shares outstanding                      45,799,429  39,028,000


    During the course of fiscal year 2006, the company recorded revenues of
$12.2M compared with $11.3M for the previous fiscal year. This 8% growth is
due to the new agreements signed during the 2006 fiscal year, including Alcoa,
the introduction in June 2006 of new imitation slate and clay roofing
products, and the international branch with market growth for Novik of more
than 170% compared to the previous year. The increase number of shipments to
the Asian market allowed this sizable growth to be achieved. It should be
noted that this growth was reduced by a noticeable average increase of 7% in
Canadian currency with relation to the U.S. dollar in 2006. This had a
negative impact for the company which amounted to nearly $0.25M on the level
of revenues earned during the course of fiscal year 2006.
    Revenues for the fourth quarter of the current fiscal year amounted to
$1.8M compared with $2.3M in the corresponding quarter of 2005, a decrease of
22%. This variation was caused in part by the desire of current and potential
customers to reduce inventory in a quieter period in view of the slowdown of
construction in the US housing market. It was also caused by a change in the
structure of our sales team, leading new associates to become familiar with
our market.


    For the fiscal year ended December 31, 2006, EBITDA amounted to $0.5M,
compared with $0.7M for the previous fiscal year. This decrease was caused by
several factors, including the hiring of staff during the previous fiscal year
and at the beginning of 2006 in our sales and administration departments to
contribute to the company's planned growth objectives, more significant
expenses for travel, representation, exhibition, and marketing specific to our
market penetration challenges, and Novik's arrival on the public market in
October 2005. This situation has contributed to an increase in administrative
expenses of more than $150,000 in order to ensure compliance with the new
securities exchange requirements. However, as mentioned above, Novik reacted
during the second half of financial year 2006 by carrying out a significant
review of its operating costs. Most of the actions taken will have a direct
impact on the profitability of the next fiscal year. The items described in
the following sections further explain the reason for this decrease.


    The company's net loss for fiscal year 2006 amounted to $(1.0)M compared
with $(0.8)M for the previous fiscal year. Management believes that the
decisions made during the final months of financial year 2006 will allow the
company to improve the level of profitability for future years. In fall 2006,
a focus was put on reducing the company's operating costs and fixed costs,
allowing the company to take advantage of these significant savings from the
beginning of financial year 2007.


    Management of orderly growth is the challenge which Novik must meet in
the near future. The level of sales attained in 2006 and the company's cost
structure for part of the year explain Novik's disappointing financial
results. The slowdown observed in the US housing market during the last
quarter and the management changes made in our sales team prevented Novik from
achieving the expected profitability. The cost structure put into place to
support greater growth also contributed to Novik's financial situation.
    However, management remains confident about Novik's potential. Novik took
concrete actions during the second half of financial year 2006 to reduce the
break-even point in relation to its sales. Most of these actions will have an
impact beginning on January 1, 2007, and we anticipate better financial
results, assuming a comparable level of sales for the next financial year.
However, our objective is not to achieve constant sales for 2007; we are
targeting for a greater rate of growth than realized in 2006. With the sale of
our new roof coverings over a period of 12 months, the introduction of these
products in Menards stores in the United States planned for the first half of
fiscal year 2007, the major growth observed in our overseas shipments to Asia,
the introduction of a new polymer exterior covering which is already
attracting interest from our current and potential customers, better focus in
our sales team with a well-targeted marketing strategy for each market, and
the arrival of a vice president of sales and marketing in March 2007, we are
looking to the future with optimism.

    About NOVIK

    Novik Inc. (NYK) is a leader in manufacturing and commercializing
innovative polymer exterior and roofing coverings that replace traditional
materials such as stone, brick or wood shingles. These products target the
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,; Pascal Bouthot, Vice-President, Finances, (418) 878-6161,; 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