Novik Second quarter highlights

                           - Record sales of $4.5M
             - Sales growth of more than 20% compared with 2006
       - Net income of $311,000 compared with loss of $185,000 in 2006
     - Six-month net income of $98,000 versus loss of $419,000 in 2006
                 - Gross margin improvement from 36% to 41%

    QUEBEC CITY, Aug. 20 /CNW Telbec/ - Novik inc. (NVK) releases today its
financial results for the second quarter for the period ended June 30, 2007.
All amounts are expressed in Canadian dollars unless otherwise indicated.

    NOVIK inc.
    for the periods ended
    June 30, 2007 and 2006
    (in thousands dollars,
     except for amounts per         Second     Second     Year to    Year to
     share)                        quarter    quarter        date       date
                                      2007       2006        2007       2006
                                         $          $           $          $
    Operating results

    Revenues                         4,470      3,704       6,826      6,309
    Gross margin                     1,825      1,316       2,644      2,208
    Income before depreciation,
     stock-based compensation,
     financial expenses and
     income taxes                      932        391       1,066        477
    Net income (loss)                  311       (185)         98       (419)
    Basic and diluted net income
     (loss) per share                0.007     (0.005)      0.002     (0.011)

    NOVIK inc.
    (in thousands dollars,                    June 30,               Dec. 31,
     except for amounts per share)               2007                   2006
                                                    $                      $
    Financial position

    Total assets                               17,368                 16,442
    Working capital                             2,240                  2,203
    Total debt                                  6,510                  6,055
    Total liability                             8,545                  7,793
    Shareholder's equity                        8,823                  8,649
    Shareholder's equity per share              0.193                  0.189

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

    During the course of the second quarter of fiscal year 2007, Novik
recorded revenues of $4.5M compared with $3.7M during the same quarter of the
previous fiscal year. This 21% increase can be attributed to the following
    First, Novik carried out a higher number of shipments totaling nearly
$300,000 to its biggest customer during the second quarter of 2007 compared
with 2006. As explained in the press release of the first quarter, Novik sold
less to its biggest customer during the previous quarter compared with the
same period last year. This decrease can be attributed to a price increase
announced on April 1, 2006. Since this beginning of the fiscal year, sales
with this client have been greater than last year.
    In addition, the Canadian construction market brought sales growth of
more than 25% during the second quarter of the current fiscal year in relation
to the same period of the previous year. This growth is explained by the
success of our new roof coverings in this market and better representation
with contractors. This improved visibility stems from our Novexpert network,
our Smart program offered to contractors, and our salespeople covering every
corner of Canada. On the American market, our sales team is carrying on with
our marketing plan, which involves targeting potential customers offering the
best short-term potential.
    Lastly, the international market is continuing its momentum with growth
of more than 25% in relation to the second quarter of the previous fiscal
year. This market represents enormous potential for Novik, and recent
marketing trips to Spain and France could contribute to continuing our rate of
growth in this market. In addition, significant firm orders on the Russian
market have been received, which should be realized in the next quarter,
confirming supported annual growth in relation to the previous year.
    Novik's cumulative sales, i.e. for the six- month period, amounted to
$6.8M compared with $6.3M for the same period of the previous year. This 8%
growth is explained by the aforementioned items.
    For the second quarter of fiscal year 2007, the earnings before interest,
stock-based compensation costs, taxes depreciation and amortization ("adjusted
EBITDA") is greater than the second quarter of 2006 by more than $0.5M, with
sales growth of around $0.8M. This noticeable improvement can be directly
attributed to the overhaul of Novik's operating costs as well as the sales
growth observed during the quarter. This overhaul of costs has led Novik to
take actions to eliminate positions and remove expenditures deemed irrelevant
to the future of the company. These actions have contributed to improving
Novik's future financial position and posting a greater level of profitability
than in the previous years.
    For the six- month period ended June 30, 2007, the adjusted EBITDA
amounted to $1.1M compared with $0.5M for the same period of previous fiscal
year. The higher gross margin seen since the beginning of the fiscal year
explains this new improvement in large part.
    The company's net earnings for the second quarter of fiscal year 2007
amounted to more than $300,000 compared with a net loss of $190,000 for the
same quarter of the previous fiscal year. This improvement of nearly $500,000
is encouraging for Novik's future. The recent actions taken to make Novik
profitable as quickly as possible are confirmed by these financial results.
    For the six- month period ended June 30, 2007, net earnings were
$100,000, compared with a net loss of more than $400,000 for the same period
of the previous fiscal year. These results are positive and are encouraging
management to bring Novik to profitability in the near future. This expected
profitability would be an important improvement considering with the net loss
of nearly $1,000,000 observed during the previous fiscal year.


    The success of our recent cost-reduction program is confirmed by the
second quarter's financial results. Improved profitability of around $500,000
for the six- month period ending June 30, 2007, compared with the previous
year demonstrates that Novik is now more competitive in its operational cost
structure. These positive financial results are motivating Novik's management
to continue its vigilance in initiating projects that could contribute to
better efficiency of its operational processes.
    Sustained sales growth for the coming quarters will also support Novik in
achieving its planned financial objectives for fiscal year 2007. The launch of
a new exterior covering announced in July 2007, the firm orders received by
our international distributors for the third quarter, Novik's stronger
representation on the North American market, and a marketing strategy
targeting customers offering the most short-term potential make it possible
for Novik's management to face the quarters and years to come with confidence.

    About NOVIK

    Novik Inc. (NYK) is a leader in manufacturing and commercializing
innovative polymer exterior 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.

    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.
    %SEDAR: 00022807EF

For further information:

For further information: Michel Gaudreau, President, (418) 878-6161,; Pascal Bouthot, CA, 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