NVK Novik Inc.

QUEBEC CITY, Aug. 4, 2011 /CNW/ -- SECOND QUARTER 2011 HIGHLIGHTS -- Historic sales record for a quarter at $9.0 M -- 17% sales growth versus Q2 - 2010 -- 17% sales growth for the first six months -- Adjusted EBITDA of $1,699,000 compared with $1,002,000 Q2 - 2010 -- Adjusted EBITDA of 19% versus 13% on sales in Q2 - 2010 -- Net profit of $471,000 compared with $30,000 -- Year-to-date net profit of $394,000 versus net loss of $244,000 last year QUEBEC CITY, Aug. 4, 2011 /CNW Telbec/ - Novik inc. (TSXV: NVK) releases today its results for the second quarter of fiscal year 2011. All amounts are expressed in Canadian dollars unless otherwise indicated. NOVIK inc. for the periods ended June 30, Second Second Year to Year to 2011 and 2010 (in thousands dollars, except for quarter quarter date date amounts per share) 2011 2010 2011 2010 $ $ $ $ Operating results Revenues 9,019 7,691 13,505 11,545 Gross margin 3,368 2,897 8,517 4,171 Earnings before depreciation, stock-based 1,699 1,002 2,090 1,049 compensation, financial expenses and income taxes Net earnings (loss) 471 30 394 (244) Basic and diluted net earnings 0.010 0.001 0.008 (0.004) (loss) per share NOVIK inc. June 30, Dec. 31, (in thousands dollars, except for 2011 2010 amounts per share) $ $ Financial position Total assets 25,709 24,488 Working capital 2,516 2,186 Total long-term financial 9,575 8,960 liabilities Total liabilities 13,636 13,109 Shareholder's equity 12,072 11,379 Shareholder's equity per share 0.25 0.23 Number of shares outstanding 48,470,858 48,470,858   During the course of the second quarter of fiscal year 2011, Novik recorded revenues of $9.0 M, compared with $7.7 M during the same quarter of the previous fiscal year. Mr. Gaudreau, Novik's CEO, is particularly proud to announce that "this level of sales is a historic record for Novik during a quarter, surpassing the record of $7.8 M set last year during the third quarter. It should be noted that over the last seven quarters, Novik has shown sales growth over comparative periods." Mr. Gaudreau points out that "this 17% growth in Novik's sales in the second quarter compared with the same period of the previous fiscal year is localized in Europe and Mexico, just like the first quarter. Stronger economic activity in certain territories has allowed Novik to make more deliveries since the beginning of the year with distributors in place. Cumulative sales since the beginning of the year on these territories are up $2,400,000." Mr. Gaudreau adds "in Canada and the US, sales remained stable in the second quarter compared with the previous year, where Novik is continuing to outperform the industry and gain market share. These levels of sales are positive considering the industry's statistics. For example, the vinyl exterior sidings industry has seen a decrease in its deliveries of nearly 5% in the United States and 20% in Canada since the beginning of the year." Novik's cumulative sales for the first six months of 2011 amount to $13.5 M compared with $11.5 M for the same period of the previous year. This 17% growth 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 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 2011, adjusted EBITDA increased by 70 % to $1,699,000 compared with $1,002,000 for the same period of the previous fiscal year.  A higher level of sales of nearly $1,225,000 for the period compared with the previous year, lower levels of introductory discounts offered to major distributors, permanent operational efficiencies implemented and a decrease in selling expenses are mainly responsible for this increase. For the six-month period ended on June 30, 2011, adjusted EBITDA increased by 90% to $2,090,000 compared with $1,049,000 for the same period of the previous fiscal year. Adjusted EBITDA over sales for the second quarter 2011 were 19% versus 13% over the corresponding quarter last year, and for the first half of 2011, adjusted EBITDA over sales were 16% versus 9% year-over-year.  This ratio demonstrates the significant increase in Novik's operating performance in 2011. 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 PROFIT The company's net profit for the second quarter of fiscal year 2011 amounts to $471,000 compared with a level of $30,000 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. For the six-month period ended on June 30, 2011, net profit is $394,000 compared with a net loss of $244,000 for the same period of the previous fiscal year. OUTLOOK The combination of sales growth and higher profitability in the first six months of fiscal year 2011 is directly in line with the objectives set at the beginning of the year.  Despite lingering effects on the industry from the latest economic crisis and price increase 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. Novik must remain vigilant in the second part of the 2011 fiscal year in order to maintain and continue the pace of growth in its sales and its profitability. The recent price increases announced in May and June 2011 will favour an increase in our sales, but the success of our marketing strategy as well as those of our current and potential customers to push our products will need to be watched in order to maintain or increase our volume of deliveries. At the operational level, we are always 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. To view this news release in HTML formatting, please use the following URL: http://www.cnw.ca/en/releases/archive/August2011/04/c9484.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

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