Novik increased the net earnings by 22% second quarter 2012 highlights

• Sales for the quarter at $7.4 M
• 11 points increase in gross margin to 48% of sales
• Adjusted EBITDA of 20% versus 19% on sales in Q2 - 2012
• Net earnings of $562,000 compared with $460,000
• Year-to-date net earnings of $672,000 versus $373,000 last year

QUEBEC CITY, Aug. 15, 2012 /CNW Telbec/ - Novik inc. (TSXV: NVK) releases today its results for the second quarter of fiscal year 2012. All amounts are expressed in Canadian dollars unless otherwise indicated.

NOVIK inc.
for the periods ended June 30, 2012 and 2011	Second	Second	Year to	Year to
(in thousands dollars, except for amounts per share)	quarter	quarter	date	date
	2012	2011	2012	2011
	$	$	$	$
Operating results
Revenues	7,429	9,019	12,781	13,505
Gross margin	3,531	3,351	5,701	4,955
Earnings before depreciation, stock-based compensation,
financial expenses and income taxes	1,508	1,699	2,253	2,089
Net earnings	562	460	672	373
Basic and diluted net earnings per share	0.012	0.009	0.014	0.009
NOVIK inc.
	June 30,	Dec. 31,
(in thousands dollars, except for amounts per share)	2012	2011
	$	$
Financial position
Total assets	25,106	25,316
Working capital	4,089	3,362
Total long-term financial liabilities	8,485	9,092
Total liabilities	12,112	13,270
Shareholder's equity	12,995	12,046
Shareholder's equity per share	0.27	0.25
Number of shares outstanding	48,615,199	48,470,858

During the course of the second quarter of fiscal year 2012, Novik recorded revenues of $7.4 M, compared with $9.0 M during the same quarter of the previous fiscal year.  Mr. Gaudreau, Novik's CEO, is particularly proud to announce that "even with a level of sales lower than the second quarter 2011, Novik managed to realize a net earnings of 22% higher than during the same quarter of the previous fiscal year."

Mr. Gaudreau points out that the shortfall in sales for the quarter is mostly tied to an apparent softness in export sales outside North America. We expect a recovery in orders flow from this market segment.

Mr. Gaudreau adds that the US distribution is showing growth from last year and indicates that some of the market strategies are slowly making grounds.  These levels of sales are still positive considering the industry's statistics.

Novik's cumulative sales, for the first six months of 2012, amount to $12.8 M compared with $13.5 M for the same period of the previous year.

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 second quarter of fiscal year 2012, adjusted EBITDA on sales increased to 20% compared to 19% for the same period of the previous fiscal year. Continued operating improvement, new product introductions and efficient strategic procurement of raw materials explain this progression in profitability.

For the six-month period ended on June 30, 2012, adjusted EBITDA increased by 8% to $2,253,000 compared with $2,089,000 for the same period of the previous fiscal year.  Adjusted EBITDA on sales for the first half 2012 was 18% versus 15% over the corresponding first half last year. This ratio demonstrates the significant increase in Novik's operating performance in 2012.  This desire of Novik's management to improve this profitability threshold was clearly identified at the beginning of the year and will remain a constant priority until the end of the year.

NET EARNINGS

The company's net earnings for the second quarter of fiscal year 2012 amounts to $562,000 compared with a level of $460,000 for the same quarter of the previous fiscal year.  This increase in profitability is directly in line with the same factors previously explained in the adjusted EBITDA section: better management of production costs, procurement strategies and new product introductions to the market.

For the six-month period ended on June 30, 2012, net earnings is $672,000 compared with $373,000 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 this profitability.

OUTLOOK

Just like the first quarter of fiscal year 2012, Novik's current financial performance is positive.  Despite lingering effects on the industry from the latest economic crisis and pressures on the cost of its raw materials, Novik has managed to recover quickly to achieve better financial results.  The company has successfully taken advantage of the opportunities created by the industry's weakness by increasing its presence with various distribution networks and intends to pursue this strategy to ensure continued growth in its sales.

At the operational level, we remain on the lookout for any opportunities to improve our production costs.  Improving our productivity and buying raw materials at competitive prices are constantly on the agenda with our various teams in order to be able to generate potential savings.

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.

 

SOURCE: Novik Inc.

Source :  

Novik inc.

For further information:

Michel Gaudreau
President
Tel. : [phone]
E-mail : [email protected]

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