Carmanah Reports Fourth Quarter, and Fiscal 2015 Results

VICTORIA, BRITISH COLUMBIA -- (Marketwired) -- 03/29/16 -- Carmanah Technologies Corporation (TSX: CMH) ("the Company" or "Carmanah") today reported its fourth quarter financial results for the period ended December 31, 2015. Currency amounts are in U.S. dollar unless otherwise noted.

For the fourth quarter of 2015, the Company recorded a net income of $0.6 million on revenues of $21.3 million. This compares to net income of $0.3 million on revenues of $13.5 million over the same period in 2014.

For the year ending December 31, 2015, the Company recorded net income of $10.7 million on revenues of $68.2 million. This compares to net income of $1.0 million on revenues of $43.7 million over the same period in 2014.

Carmanah management relies on Adjusted EBITDA(1) (a non-IFRS measure) to gauge financial performance. In 2015 the Company's generated $8.6 million of Adjusted EBITDA up from $4.0 million in 2014. A table reconciling net profit and adjusted EBITDA is included in this release.

The business highlights by segment included:

--  The Signals segment, which now includes the July 2015 acquisition of the
    Sabik Group of Companies ("Sabik" or the "Sabik companies"), showed
    strong organic growth and margin expansion, generating revenues in the
    fourth quarter of $12.5 million, up 59% from $5.4 million in the same
    period in 2014. Full year 2015 revenues were $34.2 million, up 56% from
    $16.8 million in the same period in 2014. On a year-to-date basis, the
    majority of this increase is due to the acquisition of Sabik, which
    contributed revenues of $6.0 million in the third quarter and $8.4
    million in the fourth quarter, "In all respects Sabik has exceeded our
    expectations", said John Simmons, Chief Executive Officer. Ignoring the
    effects of Sabik, our Signals segment showed year-over-year organic
    growth of 18% compared to 2014.

--  The Illumination segment generated revenues in the fourth quarter of
    $3.3 million, down 18% from $4.0 million in the same period in 2014.
    Full year 2015 revenues were $8.9 million, down 15% from $10.5 million
    in the same period in 2014. The decline year-over-year is due to a very
    soft third quarter of 2015 due to a lack of projects that could be
    closed and shipped in that period, rather than a general slowdown in
    sales or a trend in losing projects to competitors.

--  The Power segment generated revenues in the fourth quarter of $5.5
    million, up 36% from $4.1 million in the same period in 2014. Full year
    2015 revenues were $25.1 million, up 53% from $16.4 million in the same
    period in 2014. The increase is due to higher sales in both our On-Grid
    and Off-Grid verticals.


(1)  NON-GAAP FINANCIAL MEASURES: EBITDA and Adjusted EBITDA. This news
     release presents information about EBITDA and Adjusted EBITDA, both of
     which are non-IFRS financial measures, to provide supplementary
     information about 2015 operating performance. Carmanah defines EBITDA
     as net income or loss before interest, income taxes, amortization, and
     non-cash stock based compensation. Adjusted EBITDA removes unusual or
     non-operating items from EBITDA, such merger and acquisition costs,
     restructuring charges, asset write offs, and foreign exchange gains and
     losses. Carmanah uses these non-IFRS measures internally to make
     strategic decisions, forecast future results and evaluate its
     performance. EBITDA and Adjusted EBITDA are not intended as a
     substitute for IFRS measures. A limitation of utilizing these non-IFRS
     measures is that the IFRS accounting effects of the non-recurring items
     do in fact reflect the underlying financial results of Carmanah's
     business and these effects should not be ignored in evaluating and
     analyzing Carmanah's financial results. Therefore, management believes
     that Carmanah's IFRS measures of net loss and the same respective non-
     IFRS measure should be considered together. Non-IFRS measures do not
     have any standardized meaning prescribed by IFRS and are therefore
     unlikely to be comparable to similar measures presented by other
     companies. Readers should refer to the "Definitions and
     Reconciliations" section of the Company's most recently filed MD&A for
     the four and twelve months period ended December 31, 2015 for a more
     detailed discussion of these measures and their calculation.

"Our Company continued to progress well in 2015 and built on the turnaround that started to take hold in 2014", said John Simmons, Chief Executive Officer. "In 2016, we will begin to make strategic investments in our Signals and Illumination divisions in an effort to develop profitable growth. Our plans in this respect is to concentrate first on organic growth, which we hope to achieve through the addition of distribution on a global scale. In addition, we see opportunities to make strategic acquisitions to add to our product portfolio and to make further distribution gains. Finally, in 2016 we will begin to ramp up our product development spending which will be focused on adding advanced telematics to all of our product offerings so that we can lead our markets in the "internet of things" capability. Overall we are optimistic that we can continue Carmanah's progress in 2016 and achieve reasonable levels of growth."

Highlights for the quarter and the year are provided below:

----------------------------------------------------------------------------
                                   Three months ended            Year ended
                                         December 31,          December 31,
(US$ thousands)                       2015       2014       2015       2014
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Revenue                             21,327     13,451     68,206     43,732
----------------------------------------------------------------------------
Gross margin %                        32.3%      34.3%      33.6%      34.7%
----------------------------------------------------------------------------
Total operating expenditures         5,884      3,869     18,158     12,792
----------------------------------------------------------------------------
Net income                             601        284     10,680        994
----------------------------------------------------------------------------
Adjusted EBITDA (i)                  2,505      1,234      8,569      3,971
----------------------------------------------------------------------------

(i)Adjusted EBITDA is a Non-IFRS measure. Foreign exchange gain/ loss is now included in the adjusted EBITDA calculation, as such historical amounts have been updated.

Financial Condition at December 31, 2015 compared to December 31, 2014

--  Cash and cash equivalents of $14.9 million, up $6.1 million from $8.8
    million
--  Working capital of $28.3 million, up $12.2 million from $16.1 million

Complete set of Financial Statements and Management Discussion & Analysis

A complete set of the fourth quarter ended December 31, 2015 Financial Statements and Management's Discussion & Analysis are available on Carmanah's corporate website. To view these documents, visit: www.carmanah.com/Company/Investors/Financial_Reports.aspx. Both documents are also filed on SEDAR (www.sedar.com). The financial information included in this release is qualified in its entirety and should be read together with the audited consolidated financials for the year ended December 31, 2015, including the notes thereto.

EBITDA and Adjusted EBITDA

----------------------------------------------------------------------------
                                   Three months ended           Year ended
EBITDA reconciliations                   December 31,          December 31,
(US$ in thousands)                    2015       2014       2015       2014
----------------------------------------------------------------------------
----------------------------------------------------------------------------
Net income                             601        284     10,680        994
----------------------------------------------------------------------------
Add/(deduct):
----------------------------------------------------------------------------
  Interest expense                     188          -        188          -
----------------------------------------------------------------------------
  Income taxes                         (83)       (34)    (5,685)       (35)
----------------------------------------------------------------------------
  Amortization                         554        172      2,073        436
----------------------------------------------------------------------------
  Non-cash stock based
   compensation                        267        113        901        326
----------------------------------------------------------------------------
EBITDA                               1,527        535      8,157      1,721
----------------------------------------------------------------------------
  Merger and acquisition costs           3         25      1,218        756
----------------------------------------------------------------------------
  Fair value of acquired
   inventory                           492          -        492          -
----------------------------------------------------------------------------
  Extraordinary legal costs              2        139         34        804
----------------------------------------------------------------------------
  Investment tax credits              (182)         -     (4,502)         -
----------------------------------------------------------------------------
  Restructuring and asset write
   offs/(recovery)                     143        312        539        190
----------------------------------------------------------------------------
  Other inventory write
   downs/(recoveries)                   15          -        383          -
----------------------------------------------------------------------------
  Foreign exchange loss                505        223      2,248        500
----------------------------------------------------------------------------
Adjusted EBITDA(i)                   2,505      1,234      8,569      3,971
----------------------------------------------------------------------------

(i)Adjusted EBITDA is a Non-IFRS measure. Foreign exchange gain/ loss is now included in the adjusted EBITDA calculation, as such historical amounts have been updated.

About Carmanah Technologies Corporation

Headquartered in Victoria, British Columbia, Carmanah produces a portfolio of products focused on energy optimized LED and solar technologies. We design, develop and distribute energy efficient LED solutions for infrastructure including: signaling systems for the marine aids to navigation, airfield ground lighting, offshore wind marking, aviation obstruction and traffic markets. Carmanah's product portfolio also includes industrial and commercial solar powered outdoor LED lighting systems, and solar on and off-grid power generation systems. Since 1996, we have earned a global reputation for delivering strong and effective products for industrial applications that perform reliably in some of the world's harshest environments. Our LED and solar power systems provide durable, dependable, efficient and cost-effective solutions which have been deployed in over 400,000 installations in 110 countries. The Carmanah brand portfolio includes Go Power! and recently acquired companies, Sol and Sabik.

This release may contain forward-looking statements. Often, but not always, forward-looking statements can be identified by the use of words such as "expects," "estimates," "could," "will" or variations of such words and phrases. Forward-looking statements or information in this news release relate to, among other things: revenues, and revenue growth, for the fourth quarter and year ended December 31, 2015; order backlogs; gross margins and estimates of EBITDA and Adjusted EBITDA. Forward-looking statements involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance, or achievements of Carmanah or Sabik to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements. Such factors include, but are not limited to: our ability to become a worldwide leader in the marine aids to navigation industry, the potential growth of the off shore wind safety market or our ability to participate in any growth and other general uncertainties that may impact actual outcomes. These forward-looking statements are based on management's current expectations and beliefs but given the uncertainties, assumptions and risks, readers are cautioned not to place undue reliance on such forward-looking statements or information. Carmanah disclaims any obligation to update, or to publicly announce, any such statements, events or developments except as required by law.

For additional information on these risks and uncertainties, see Carmanah's most recently filed Annual Information Form (AIF) and Annual MD&A, which are available on SEDAR at www.sedar.com and on the Company's website at www.carmanah.com. The risk factors identified in Carmanah's AIF and MD&A are not intended to represent a complete list of factors that could affect Carmanah.

Contacts:
Carmanah Technologies Corporation:
Evan Brown
Chief Financial Officer/Corporate Secretary
(250) 380-0052
[email protected]

Source: Carmanah Technologies Corporation

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