Carmanah Technologies Corporation (TSX - CMH) Message Board

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Gold/Mining/Energy : Carmanah Technologies Corporation (TSX - CMH)

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To: Stephen O who wrote (46)	10/28/2003 1:30:17 PM
From: Stephen O	Read Replies (1) of 101

From Canaccord CARMANAH TECHNOLOGIES INC. (CMH : TSX-V : C$1.25) - BUY - 12-MONTH TARGET PRICE: C$1.50 é Sara Elford, CFA Comment: Carmanah reports strong Q3/F03 financial results Carmanah reported strong Q3/F03 financial results last week that were in-line with our expectations. Revenue increased 43.4% year over year to $2.3 million and net earnings rose 163.1% to $0.1 million. The company reported EPS of $0.00 in both quarters. The increase in revenue this quarter is a reflection of the early success of Carmanah’s solar-powered LED lights in a variety of newer end markets – namely the aviation and transit segments (30% of the quarter’s revenue). We expect this diversification strategy to continue to bear fruit in the quarters and years ahead. Bearing in mind that its products are produced in Canada and priced in US dollars, we were pleased to see Carmanah’s 54.1% gross margin, consistent with the year-to-date average. All other cost items continued to be well contained, and in fact grew at a slower rate than revenue. We expect this trend to continue. At the end of the quarter, Carmanah had a backlog of $1.1 million (recall that the company got a $1.6 million order for 300 bus shelter lighting systems for the city of London, England). That said, this isn’t really a backlog-based business at this point. Most of Carmanah’s orders are still relatively small and turn over quickly. We are maintaining our BUY rating and increasing our one-year target price from $1.25 to $1.50.

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