NOVIK ANNOUNCES RECORD QUARTERLY SALES

QUEBEC CITY, Nov. 10 /CNW/ -- 
THIRD QUARTER 2010 HIGHLIGHTS


    --  Net earnings of $693,000 compared to $93,000 last year
    --  Consecutive record quarterly sales at $7.8 M
    --  61% increase in sales during the quarter
    --  66% sales growth for the first nine months
    --  446% improvement in adjusted EBITDA for the first nine months
    --  Quarterly operating profit of $1,043,000 compared to $128,000
        last year



QUEBEC CITY, Nov. 10 /CNW Telbec/ - Novik inc. (NVK) releases today its
 results for the third quarter of fiscal year 2010. All amounts are
 expressed in Canadian dollars unless otherwise indicated.






NOVIK inc.

for the periods ended September       Third      Third Year to Year to
30, 2010 and 2009

(in thousands dollars, except       quarter    quarter    date    date
for amounts per share)

                                       2010       2009    2010    2009

                                          $          $       $       $

Operating results

Revenues                              7,839      4,872  19,384  11,688

Gross                                 3,257      1,993   7,387   4,493
margin

Earnings before depreciation,         1,637        442   2,687     492
stock-based compensation,
financial expenses and income
taxes

Net earnings (loss)                     693         93     432    (99)

Basic and diluted net earnings        0.014      0.002   0.009 (0.002)
(loss) per share

NOVIK inc.

                                  Sept. 30,   Dec. 31,

(in thousands dollars, except          2010       2009
for amounts per share)

                                          $          $

Financial position

Total                                26,287     25,314
assets

Working capital                         962      1,457

Total long-term                       9,519     10,450
financial
liabilities

Total                                14,921     14,496
liabilities

Shareholder's                        11,366     10,818
equity

Shareholder's equity                   0.23       0.22
per share

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





Mr. Gaudreau, Novik's president, is proud to announce positive financial
 results for the third quarter of current fiscal year. He points out
 that "during the previous quarter, Novik had announced a record quarter
 in its sales with disappointing profitability. The high cost of raw
 materials combined with introductory discounts offered to large North
 American distributors explained this lower profitability. The current
 quarter presents better financial results. Novik has again set a new
 sales record but with much greater operational profitability. The
 increase in the price of our products, a decrease in the price of raw
 materials on the market, the significant decrease in introductory
 discounts offered, as well as tighter monitoring of our operating costs
 contributed to these more positive financial results."


Revenue


During the course of the third quarter of fiscal year 2010, Novik
 recorded revenues of $7.8 M, compared to $4.9 M during the same quarter
 of the previous fiscal year. This level is a new quarterly sales record
 for Novik, surpassing the quarterly sales record of $7.7 M during the
 previous quarter. Novik has thus achieved two consecutive quarters of
 record sales. Mr. Gaudreau explains that "Novik's 61% sales growth in
 the third quarter compared to the same period of last fiscal year is
 still a great achievement, given our presence in an industry still
 facing significant challenges following the latest economic
 recession. Our industry has grown marginally since last year and
 remains far from the thresholds seen in the mid-2000s; Novik is thus
 gaining market share, given its greater pace of sales growth since the
 start of the current year."


Mr. Gaudreau adds that "the sales growth remains mainly in Canada and
 the United States. Just like the previous quarters of the current
 fiscal year, the presence of new large distributors in these two
 countries and especially the introduction of innovative covering
 products in 2009 explain this growth. Sales increased by nearly $3 M in
 the North American territory for the third quarter, a 76% increase
 compared to the same period of the previous year. The same surge in
 sales growth was observed on this market during the previous
 quarter. The efforts in marketing and developing new products in recent
 years have allowed Novik to generate this sales growth and stand out in
 a market where the opportunities are at a slow pace. This phenomenal
 growth in Novik's sales in a North American economic context considered
 very difficult, positions the company advantageously in the face of a
 stronger economic recovery foreseen over the coming years."


On the other hand, Mr. Gaudreau ends by outlining that "European
 deliveries are constant compared to the last quarter. Access to credit
 for our distributors remains the main obstacle to bringing back the
 sales volumes seen in 2008, of nearly $9 M. It is difficult for us to
 predict the volume of sales for the coming year, but we know that Novik
 products still remain a viable, desired option on this continent. We
 are thus continuing discussions with our current distributors in order
 to maximize the opportunities offered on this continent."


Novik's cumulative sales, for the first nine months of 2010, total $19.4
 M compared to $11.7 M for the same period of the previous year. This
 strong 66% increase in sales is also explained by the items mentioned
 above.


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 third quarter of fiscal year 2010, adjusted EBITDA is $1,637,000
 compared to $442,000 for the same period of the previous fiscal year.


Novik's large sales growth during the third quarter explains this
 increase.  This level of adjusted EBITDA, with a ratio of 21% on sales,
 represents a threshold more comparable to that seen in fiscal year
 2008, when Novik had generated an annual return of 20%.  This ratio
 demonstrates Novik's potential to generate attractive levels of
 liquidities in a context of profitability.


For the nine-month period ended on September 30, 2010, adjusted EBITDA
 totals $2,687,000 compared to $492,000 for the same period of the
 previous fiscal year. It is important for Novik to post a suitable
 adjusted EBITDA threshold during the second and third quarters, given
 that the next two quarters will be periods of lower sales combined with
 the production of Novik products in order to respond to strong sales
 during second quarter next year.


NET PROFIT


The company's net profit for the third quarter of fiscal year 2010
 amounts to $693,000, compared to a net profit of $93,000 for the same
 quarter of the previous fiscal year. It is important to understand that
 the net profit generated during the second quarter of the previous
 fiscal year was made possible through the recording of an exchange gain
 of $300,000 as explained above. Considering the level of earnings
 coming from operations, Novik shows an operating profit of $1,128,000
 in the current third quarter compared to an operating profit of
 $27,000. Novik's large sales growth in this third quarter made this
 significant improvement possible.


In addition, the net profit for the third quarter improved greatly
 compared to the previous quarter. The net profit for the previous
 quarter was $51,000.  Despite a comparable level of sales, this
 profitability was improved thanks to the increase in the gross margin
 as a percentage of sales and better monitoring of selling expenses.


For the nine-month period ended on September 30, 2010, the net profit is
 $432,000 compared to a net loss of $99,000 for the same period of the
 previous fiscal year. Novik generated an operating profit of $1,187,000
 after the first nine months of 2010 compared to an operating loss of
 $956,000 last year. A marked increase can thus been seen in the
 company's profitability in only one year.


OUTLOOK


Achieving profitability in 2010 remains an important focus for
 Management by the end of the fiscal year. Despite a more difficult
 fiscal year in 2009, Management insisted on, and still insists, on
 action plans in order to encourage this return to profitability. The
 level of orders and current discussions with customers encourages us to
 maintain focus in order to achieve this profitability goal.


We are also preparing the goals for next fiscal year. Having already
 received the support of most of our large North American distributors
 for 2011, we are building the foundation of our marketing strategy with
 regard to Novik's various markets and products. We have already put
 forward certain projects to improve our products and our range of
 colours, bringing a strong positive view from of our distributors.  We
 are thus working internally to ensure that these opportunities are
 ready for the first quarter of fiscal year 2011. We are also aiming to
 continue our organizational agility in our manufacturing operations in
 order to be ready to adequately support the growth foreseen for the
 coming years.


About NOVIK


Novik (NVK) is a leader in the design, manufacturer and distribution of
 innovative polymer exterior siding, roofing coverings and accessories
 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



pbSource :  /b /p pNovik inc./p pbFor further information/b:/p pMichel Gaudreaubr/ Presidentbr/ Tel. : [phone]br/ E-mail : a href="mailto:[e-mail]" font-style="italic"[e-mail]/a/p pPascal Bouthotbr/ Vice-President, Financesbr/ Tel. : [phone]br/ E-mail : a href="mailto:[e-mail]" font-style="italic"[e-mail]/a/p

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