Novik Inc. - 147% increase in net earnings over Q2 2012 - Novik reports second quarter 2013 results

• Record revenues of $9,639,530 compared to $7,428,646, an increase of 30%
• 147% increase in net earnings to $1,387,000 compared to $562,052
• 27% EBITDA margin on revenue compared to 20% in Q2 2012
• 73% increase in EBITDA to $2,610,065
• 32% decrease in net borrowings from $8,297,927 as of June 30, 2012 to $5,654,269
• 49% increase in year-to-date net earnings of $1,004,365 versus $672,010 during same period in 2012

QUEBEC CITY, Aug. 15, 2013 /CNW Telbec/ - Novik Inc. (TSXV: NVK) released today its 2013 second quarter results. All amounts are expressed in Canadian dollars.

NOVIK INC. for the periods ended June 30, 2013 and 2012	Period of three months	Period of three months	Period of six months	Period of six months
(in thousands of dollars, except data per share)	2013	2012	2013	2012
	$	$	$	$
Operating results
Revenues	9,640	7,429	13,241	12,781
Gross margin	4,613	3,531	5,940	5,701
Earnings before interest, income taxes, stock-based compensation costs, depreciation, and amortization	2,610	1,508	2,551	2,253
Net earnings	1,387	562	1,004	672
Basic and diluted net earnings per share	0.028	0.012	0.020	0.014

NOVIK INC.	June 30	December 31
(in thousands of dollars, except data per share)	2013	2012
	$	$
Financial position
Total assets	26,057	24,703
Working capital	5,902	4,494
Long-term debt including the current portion	6,217	6,839
Total liabilities	10,498	10,461
Shareholders' equity	15,559	14,242
Shareholders' equity per share	0.32	0.29
Number of outstanding shares	49,200,858	48,825,858

Mr. Michel Gaudreau, Chairman of the Board and President and Chief Executive Officer of the Corporation, was pleased with the exceptional results for the second quarter 2013.  Mr. Gaudreau stated that "the late start of the construction season following a long series of weather issues, the introduction of new exciting products and the ramp up of new targeted customers contributed to this noticeable improvement".

During the second quarter of 2013, the corporation generated record revenues for a second quarter at $9,639,530 compared with $7,428,646 in 2012, an increase of 30%.

During the first half of 2013, the corporation generated $13,241,208 in revenues compared with $12,781,160 in 2012, a 4% increase. Management believes that product and market strategies set in motion in latter part of previous year are improving revenues and results.

EARNINGS BEFORE DEPRECIATION, AMORTIZATION, FINANCIAL EXPENSES, STOCK-BASED COMPENSATION COSTS AND TAXES ("Adjusted EBITDA")

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 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 corporation's liquidity and ability to generate funds to finance its activities.

For the second quarter of 2013, adjusted EBITDA amounted to $2,610,065 compared with $1,508,064 for the same period of the previous fiscal year, a significant increase of 73%.  Adjusted EBITDA on sales for the second quarter of 2013 was 27% versus 20% over the corresponding period of last year. Higher overall sales, changes in the product mix with the introduction of new products, new customers and continuous improvement activities support this level of performance.

For the first six-month period ended on June 30, 2013, adjusted EBITDA increased by 13% to $2,551,074 compared with $2,253,364 for the same period of the previous fiscal year.  Adjusted EBITDA on sales for the first half of 2013 was 19% versus 18% over the corresponding first half of last year despite a slow start in Q1 2013.

NET EARNINGS

The net earnings for the second quarter of the fiscal year 2013 were $1,387,000 compared with $562,052 for the same quarter of the previous fiscal year.  This increase of 147% in profitability is directly in line with the increase of the sales and the same factors previously referred to in the adjusted EBITDA section.

For the six-month period ended on June 30, 2013, net earnings were $1,004,365 compared with $672,010 for the same period of the previous fiscal year.  This financial result represents a net improvement compared with the previous year and is directly in line with management's desire to maximize profitability through innovation and operational excellence.

OUTLOOK

Mr. Gaudreau concluded that "even if the construction industry has yet to recover fully from the latest downturn, we are pleased with positive results delivered by Novik."

Management believes that innovation efforts made in recent years in marketing of new sophisticated and unique products have allowed Novik to better position itself in the industry and to differentiate itself from its competitors.  At the same time, internal efforts to generate operational savings through better use of raw materials, equipment, and value-added production methods have been implemented to allow Novik to improve its profitability despite the constant pressure of raw material price levels.

Novik is pleased with the fact that the US housing market is showing improvements that should create additional demand for the corporation's products. The overseas markets have started to show improvements as well and management expects that it should have a favorable impact on volume of sales of Novik in the second half of the year.

The senior sales management team member added in the latter part of 2012 helped capturing additional market share in 2013 by optimizing Novik's presence with current and potential distributors in the North American markets.

"We enter the third quarter with a strong order book and many sales and marketing activities to come. At this point, the management of the corporation still sees no needs to change its outlook for the full year 2013" added Mr. Gaudreau. "Novik keeps its focus on improving the customer's experience thus creating value for the shareholders not solely by increasing sales volume but leveraging the passion of our members who provide measurable operating excellence".

About NOVIK

Novik (NVK) is a leader in the design, manufacture 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 are based upon current expectations and involve known and unknown risks, uncertainties or other factors associated with Novik's business and the environment in which the business is operated and that may cause actual results, performance or achievements of the corporation to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements including the matters discussed in the MD&A of Novik for the year ended December 31, 2012.

Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking, including those identified by the expressions "anticipate", "believe", "plan", "estimate", "expect", "intend", and similar expressions to the extent they relate to Novik or its management. Forward-looking statements are not historical facts, but reflect Novik's current expectations regarding future results or events. Novik assumes no obligation to update the forward-looking statements, or to update the reasons why actual results could differ from those reflected in the forward-looking statements except as may be required by Canadian securities laws.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
 

 

SOURCE: Novik Inc.

Michel Gaudreau
Chairman of the Board and President and Chief Executive Officer
Tel. : [phone]
E-mail : [email protected]

François Giroux
EVP & General Manager and Interim Chief Financial Officer
Tel. : [phone]
E-mail : [email protected]