Novik Inc. - 90% increase in adjusted EBITDA - First quarter 2012 highlights

• Record revenues for a first quarter at $5.4M
• 19% revenue growth over first quarter 2011
• 5 point increase in gross margin to 41% of sales
• 90% increase in Adjusted EBITDA from $391,000 to $745,000
• Net earnings of $110,000 compared to net loss of $87,000

QUEBEC CITY, May 17, 2012 /CNW Telbec/ - Novik Inc. (TSXV: NVK) is pleased to release its 2012 first quarter results.  All amounts are expressed in Canadian dollars.

NOVIK inc.
for the periods ended March 31, 2012 and 2011	First		First
(in thousands dollars, except for amounts per share)	quarter		quarter
	2012		2011
	$		$
Operating results
Revenues	5,353		4,486
Gross margin	2,170		1,604
Earnings before depreciation, stock-based compensation, financial expenses and income taxes	745		391
Net earnings (loss)	110		(87)
Basic and diluted net earnings (loss) per share	0.002		(0.002)
NOVIK inc.
	March 31,		Dec. 31,
(in thousands dollars, except for amounts per share)	2012		2011
	$		$
Financial position
Total assets	25,760		25,316
Working capital	3,389		3,363
Total long-term financial liabilities	8,772		9,092
Total liabilities	13,599		13,270
Shareholder's equity	12,161		12,046
Shareholder's equity per share	0.25		0.25
Number of shares outstanding	48,470,858		48,470,858

Mr. Gaudreau, Chairman and CEO of Novik, is proud to announce that "during a quarter that is seasonally our weakest, Novik's financial performance in the first quarter of 2012 was extremely positive, highlighted by strong sales growth, cost containment, and profitability.  Novik's financial 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."

In the first quarter of 2012, Novik recorded revenues of $5.4M, compared to $4.5M during the same quarter of the previous fiscal year, representing the highest level of first quarter sales achieved by Novik in any prior fiscal year.

Mr. Gaudreau states "the 19% growth in Novik's sales in the first quarter was predominantly generated within North America. The recent launch of the new Novistone^TM Premium product line in March 2012 contributed to Novik's sales growth. This new product line offers the appearance of river stone, cut stone, and fieldstone as a result of a new innovative manufacturing process developed by Novik, and provides a more realistic texture, feel, and touch of real stone.  Also, Novik experienced considerable succcess in its winter booking program, with sales increasing to existing distribution channel partners due to higher demand from their end customers. Novik's new exterior covering products have been well received in the market, allowing Novik to increase its visibility and give confidence to its channel partners to build inventory with Novik's product lines."

Mr. Gaudreau adds "the recent launch of the new Novistone^TM Premium product line in March 2012 also contributed to Novik's sales growth. This new product line offers the appearance of river stone, cut stone, and fieldstone as a result of a new innovative manufacturing process developed by Novik, and provides a more realistic texture, feel, and touch of real stone."

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 2012, Novik recorded adjusted EBITDA of $745,000 compared to $391,000 for the same period of the previous fiscal year.

Adjusted EBITDA growth of 90% was the result of an increase in sales of $900,000 as well as a 5 point increase in gross margin as a percentage of sales versus the same quarter of the previous fiscal year.  The success of the winter 2011 booking program, maintaining price increases introduced in 2011 and better operational management all contributed to the marked improvement in adjusted EBITDA.

NET EARNINGS

Novik recorded net earnings of $110,000 in the first quarter of fiscal 2012 compared to a net loss of $87,000 during the corresponding period of the previous year. This was only the second time in Novik's history as a public company where it recorded positive net earnings in the first quarter, which traditionally is the company's seasonally slowest period.

OUTLOOK

"We are continuing our initiatives in order to maintain these positive trends," stated Mr. Gaudreau, "the recent launch of the Novistone^TM Premium product line is a concrete example of this.  This new product line is unique in our industry and distances Novik products even more from the competition, while also strengthening Novik's position as leader in new product development.  Our sales and marketing team members are busy introducing Novistone^TM Premium across our markets in order to maximize their presence with our current customers and to identify new high-potential customers.

At the operational level, staff throughout the organization continues to focus on sound operational management - procurement of our raw materials at competitive prices, efficiency in production techniques, and the reduction of tasks not providing added value are factors occupying the daily tasks of our people and contributing to Novik's future profitability."

OTHER

Following the annual general meeting held this morning, the directors have approved the grant of 950 000 stock options available to directors and certain officers at $0.30 a share.

Mr. Gaudreau also announces today that Pascal Bouthot, Novik's CFO, has decided to pursue other opportunities outside of the Company. Mr. Bouthot stated "I very much enjoyed my time at Novik over the past six years.  While I am moving on to expand my professional horizons, I am proud on what we have accomplished and I am positive for its future".  Mr. Gaudreau stated "on behalf of everyone at Novik, I would like to thank Pascal for his contribution to Novik and wish him all the best in his future endeavors."

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 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.

Source :  

Novik inc.

For further information:

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