Novik Inc. (TSXV:NVK)
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QUEBEC CITY, May 19 /CNW/ --
FIRST QUARTER 2011 HIGHLIGHTS
-- Record sales for a first quarter at $4.5M
-- 16% sales growth versus first quarter 2010
-- Increase in gross margin to 36% of sales
-- Adjusted EBITDA of $390,000 compared with $49,000
-- Net loss of $77,000 compared to $275,000
QUEBEC CITY, May 19 /CNW Telbec/ - Novik inc. (TSXV: NVK) releases today
its results for the first quarter of fiscal year 2011. All amounts are
expressed in Canadian dollars unless otherwise indicated.
NOVIK inc.
for the periods ended March 31, 2011 and 2010 First First
(in thousands dollars, except for amounts per quarter quarter
share)
2011 2010
$ $
Operating results
Revenues 4,486 3,854
Gross margin 1,619 1,274
Income before depreciation, stock-based 390 49
compensation, financial expenses and income taxes
Net loss (77) (275)
Basic and diluted net income (loss) per share (0.002) (0.006)
NOVIK inc.
March 31, Dec. 31,
(in thousands dollars, except for amounts per 2011 2010
share)
$ $
Financial position
Total assets 24,988 24,469
Working capital 2,516 2,186
Total long-term financial liabilities 9,553 8,960
Total liabilities 13,589 13,090
Shareholder's equity 11,308 11,379
Shareholder's equity per share 0.23 0.23
Number of shares outstanding 48,470,858 48,470,858
During the course of the first quarter of fiscal year 2011, Novik
recorded revenues of $4.5 M, compared to $3.9 M during the same quarter
of the previous fiscal year. Mr. Gaudreau, Novik's CEO, points out
"this level of sales is a record for Novik during a first quarter,
surpassing that of last year. It should be noted that for the last six
quarters, Novik has had record sales for each of these periods."
This 16% growth in Novik sales in the first quarter compared to the same
period of the previous fiscal year is localized in Europe and Mexico.
Stronger economic activity in certain European countries has allowed
Novik to make more deliveries on this continent since the beginning of
the year with distributors in place. Greater sales of nearly $850,000
in the first quarter compared to the same period of the previous fiscal
year suggest greater annual growth in 2011 compared to 2009 and 2010.
In the last two fiscal years, European sales totalled $1.9 M in 2009
and $2.4 M in 2010. As for our Mexican sales, since the beginning of
the year, a major distributor in this country has been given more
construction projects using one of our roof coverings. As of today,
orders totalling more than $1,000,000 have been received from this
customer in 2011, and most of them will be delivered in the next
quarter.
At the Canadian level, sales remained stable in this first quarter
compared to last year and despite the weather condition experienced in
this period. The late snowmelt, seen mainly in Quebec and the
Maritimes, slowed down construction and renovation projects in these
territories.
In the US, the decrease in sales of nearly $400,000 is also explained in
part by the severe weather conditions seen in the northern United
States, which has delayed renovation and residential construction
projects. In addition, during the first quarter of last year, Novik had
offered advantageous introductory discounts to new US distributors.
This initiative had thus allowed Novik to generate sales figures
greater than those observed in the current quarter but at lower
profitability.
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 International Financial Reporting
Standards (IFRS). It is therefore considered to be a non-IFRS
measure. 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 first quarter of fiscal year 2011, adjusted EBITDA is $390,000
compared to $49,000 for the same period of the previous fiscal year.
A higher level of sales of nearly $600,000 for the period compared to
the previous year and lower levels of introductory discounts offered to
new customers mainly explain this increase. In order to encourage new
distributors offering high potential volume to join Novik, favourable
terms were granted to them last year to allow them to stock our
products in their warehouses. This measure promoted the receipt of
large orders in the first quarter of the previous fiscal year in return
for this introductory discount but had reduced gross margin on these
sales.
NET LOSS
The company's net loss for the first quarter of fiscal year 2011 amounts
to $77,000 compared to a net loss of $275,000 for the same quarter of
the previous fiscal year. The company generally shows a net loss in
its first quarter of each fiscal year. This situation is explained by
cyclical fluctuations, as the first quarter is normally a quarter
signifying a slow-down in sales compared to the second and third
quarter.
This reduction in net loss is directly in line with the same elements
previously explained: the increase in the sales volume combined with
the decrease in introductory discounts offered to major customers last
year. These financial earnings are directly related to our desire to
improve the company's profitability.
OUTLOOK
Novik's financial performance in the first quarter of the current year
is encouraging; thanks to the growth of its sales, cost containment,
and reduction of its net loss. The posted results are directly in line
with the objectives set at the beginning of the year: an increase in
sales and better profitability compared to last year.
The current orders on hand and the current discussions with our
Canadian, US, and international distributor allow us to remain positive
about achieving our 2011 sales growth objective. However, we must be
vigilant in the coming months in order to reach our financial objective
of obtaining better profitability than last year. The significant
increase in the cost of raw materials observed since the beginning of
the fiscal year as well as the level of the Canadian dollar in relation
to the US dollar bring external obstacles that must be addressed.
An increase in the price of our products already announced to our
customer for May 2011, the search for and purchase of alternative
materials at a lower cost without compromising the quality of our
products, and the establishment of actions aiming to improve our
production costs are measures already taken to react to these
obstacles. We are also making significant efforts with our team
members to bring about additional actions necessary to lessen these
negative trends.
OTHER
Following the annual general meeting held this morning, the directors
have approved the grant of 1,175,000 stock options available to
directors and certain officers at $0.36 a share.
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.
To view this news release in HTML formatting, please use the following URL: http://www.cnw.ca/en/releases/archive/May2011/19/c6139.html
p bSource : /b /p p Novik inc. /p p bFor further information/b: /p p Michel Gaudreaubr/ Presidentbr/ Tel. : (418) 878-6161br/ E-mail : a href="mailto:micgau@novik.com"micgau@novik.com/a /p p Pascal Bouthotbr/ Vice-President, Financesbr/ Tel. : (418) 878-6161br/ E-mail : a href="mailto:pasbou@novik.com"pasbou@novik.com/a /p