Press Release
Creative Vistas, Inc. Reports 34% Rise in Record Revenues, Doubling of EBITDA in Second Quarter
Wednesday August 15, 9:03 am ET
Results Exceed Guidance; Revenues for Quarter and Year to Date Represent Record in Company History;
Company Expects Annual Growth of 20%-30% in Revenues and 40%-50% in EBITDA.
WHITBY, Ontario--(BUSINESS WIRE)--Creative Vistas, Inc., (OTCBB:CVAS - News), a leading provider of integrated advanced video security and surveillance solutions as well as broadband-related services, today reported record financial results for the second quarter and six month period ending June 30, 2007.
Revenues for the second quarter of 2007 totaled $9.58 million, up 34% from $7.16 million in the second quarter of 2006. Net income was $191,700, or $0.01 per fully diluted share, compared to $690,255, or ($0.01) per fully diluted share, in the year-earlier quarter. Net income in 2006 was impacted by non-cash gains of $1,080,000.
Earnings before income taxes, depreciation and amortization (EBITDA(1)) were $974,800 in the second quarter of 2007, up 127% from $430,000 in the second quarter of 2006. EBITDA, excluding non-cash expenses for the second quarter of 2007, was $1,146,100, up 103% from $565,900 in the second quarter of 2006.
Revenue and EBITDA both exceeded earlier guidance by significant margins. Revenue for the second quarter of 2007 had been projected to total between $8.9 million and $9.2 million. EBITDA had been projected to reach $650,000.
CEO Sees Stronger Growth Going Forward
Sayan Navaratnam, Chairman and CEO of Creative Vistas, commented, "The company's second quarter results have exceeded our expectations and demonstrate the strength of demand for Creative Vistas' products and services in all of its business units. Meanwhile, the sharp rise in EBITDA shows that the company is solidly profitable at an operating level and increasingly able to fund future growth through organic growth and cash flows. This solid financial performance comes as Creative Vistas is still in the early phases of executing its primary growth strategy, that of integrating its technology, video security systems and broadband-related services in both commercial and residential markets. I believe the success of the latest quarter is the foundation towards a brighter future for the company," concluded Mr. Navaratnam.
As in prior quarters, the net income and EPS results are affected substantially by non-cash adjustments related to Creative Vistas' capital structure. These include quarterly revaluations of the Company's warrant liabilities, which change in value inversely to the price of its stock. For that reason, the Company believes EBITDA provides a useful tool, in conjunction with GAAP reporting, for gauging the ongoing performance of its operating units.
For the six months ended June 30, 2007, revenues totaled $17.37 million, up 28% from $13.61 million in the first six months of 2006. Net loss was ($340,372), or ($0.01) per fully diluted share, compared to a net loss of ($6.6 million), or ($0.21) per fully diluted share, in the first six months of 2006. EBITDA in the first six months of 2007 was $1,523,500, compared to EBITDA of $812,800 in the first six months of 2006. Excluding non-cash expenses, EBITDA for the first six months of 2007 was $1,809,200, up 65% from EBIDTA of $1,099,000 in the first six months of 2006. Revenues for the second quarter and six months ended June 30, 2007 were positively impacted by approximately 3.5% and 1.0% due to currency fluctuations.
On an operating basis, earnings in the second quarter of 2007 were $419,200, up 156% from $163,800 in the second quarter of 2006. Operating earnings for the first six months of 2007 were $472,600, up 110% from $225,100 in the first half of 2006.
Creative Vistas Provides Positive Annual Guidance
The Company also provided future annual guidance for both revenues and EBITDA. Based on today's guidance, revenues are expected to grow by 20%-30% with EBITDA increases of between 40%-50%.
For further information on Creative Vistas please visit www.creativevistasinc.com. If you would like to be added to Creative Vistas' investor email lists or have additional questions, please contact Haris Tajyar with Investor Relations International at htajyar@irintl.com.
About Creative Vistas
Creative Vistas Inc. is a leading provider of security-related technologies and systems. It also provisions the deployment of broadband services. Operating through its wholly-owned subsidiaries AC Technical Systems Ltd. and Iview Digital Video Solutions Inc., it offers integrated electronic security and surveillance solutions. Its systems are used by numerous high-profile clients including government, school boards, retail outlets, banks and hospitals. Through its subsidiary Cancable Inc., the Company provisions the deployment and servicing of broadband technologies to the commercial and residential market. Creative Vistas is based in Ontario, Canada.
Forward-Looking Statements: Statements about the Company's future expectations, including future revenues and earnings, and all other statements in this press release other than historical facts are "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, Section 21E of the Securities Exchange Act of 1934, and as the term is defined in the Private Securities Litigation Reform Act of 1995. The Company's actual results could differ materially from expected results for reasons described from time to time in the Company's public filings. The Company undertakes no obligation to update forward-looking statements to reflect subsequently occurring events.
(1) EBITDA represents, for any relevant period, income (loss) before income taxes, depreciation of property, plant and equipment, interest expense (including amortization of debt issuance costs) and amortization of intangible assets.
Creative Vistas, Inc.
Condensed Consolidated Balance Sheet (Unaudited) June 30, 2007
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Assets
Current Assets
Cash and bank balances $2,969,278
Accounts receivable, net of allowance for doubtful
accounts $203,742 4,231,158
Income tax recoverable 382,684
Inventory and supplies 944,435
Prepaid expenses 374,721
Due from related parties 2,399
----------------------------------------------------------------------
Total current assets 8,904,675
----------------------------------------------------------------------
Property plant and equipment, net of depreciation 5,696,751
Goodwill 2,893,845
Intangible assets 1,300,000
Restricted cash 201,068
Deferred financing costs, net 602,882
Deferred income taxes 36,724
----------------------------------------------------------------------
$19,635,945
----------------------------------------------------------------------
Liabilities and Shareholders' (Deficit)
Current Liabilities
Accounts payable and accrued liabilities $4,929,521
Current portion of obligation under capital leases 664,798
Deferred income 70,750
Deferred income taxes 25,858
Current portion of term notes 2,593,212
Due to related parties 1,803
----------------------------------------------------------------------
Total current liabilities 8,285,942
----------------------------------------------------------------------
Term notes 13,752,921
Notes payable to related parties 1,500,000
Obligation under capital lease 3,506,971
Due to related parties 216,779
----------------------------------------------------------------------
27,262,613
----------------------------------------------------------------------
Shareholders' (deficit)
Share capital
Authorized
50,000,000 no par value preferred shares
undesignated, nonissued or outstanding -
100,000,000 no par value common shares
33,647,804 issued and outstanding
Common stock 949,615
Additional paid-in capital 4,197,987
Accumulated other comprehensive losses (570,234)
Accumulated (deficit) (12,204,036)
----------------------------------------------------------------------
(7,626,668)
----------------------------------------------------------------------
$19,635,945
----------------------------------------------------------------------
Creative Vistas, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended Six months ended
----------------------------------------------------------------------
June 30 June 30
----------------------------------------------------------------------
2007 2006 2007 2006
----------------------------------------------------------------------
Contract and service
revenue
Contract $1,534,017 $1,305,993 $2,861,264 $2,906,956
Service 8,023,515 5,833,441 14,477,444 10,679,420
Other 19,049 18,273 31,493 27,888
----------------------------------------------------------------------
9,576,581 7,157,707 17,370,201 13,614,264
----------------------------------------------------------------------
Cost of sales
Contract 889,505 851,901 1,811,501 1,818,597
Service 5,735,967 3,942,787 10,345,667 7,160,582
----------------------------------------------------------------------
6,625,472 4,794,688 12,157,168 8,979,179
----------------------------------------------------------------------
Gross margin 2,951,109 2,363,019 5,213,033 4,635,085
----------------------------------------------------------------------
Operating expense
Project 323,637 289,718 605,303 692,131
Selling 211,726 161,982 387,570 300,271
General and
administrative 1,825,291 1,609,305 3,461,846 3,131,413
General and
administrative - Non-
cash stock compensation 171,300 138,250 285,701 286,200
----------------------------------------------------------------------
2,531,954 2,199,255 4,740,420 4,410,015
---------------------------------------------- -----------------------
Income from operations 419,155 163,764 472,613 225,070
----------------------------------------------------------------------
Interest and other
expenses
Net financing expenses 740,091 503,656 1,299,289 3,553,441
Amortization of deferred
charges 46,575 50,245 91,851 693,934
Foreign Currency
Translation Gain (559,237) (306,549) (578,155) (202,127)
Derivative instruments - (773,843) - 2,787,700
----------------------------------------------------------------------
227,429 (526,491) 812,985 6,832,948
----------------------------------------------------------------------
Income (loss) before
income taxes 191,726 690,255 (340,372) (6,607,878)
Income taxes - - - -
----------------------------------------------------------------------
Net income (loss) 191,726 690,255 (340,372) (6,607,878)
----------------------------------------------------------------------
Other comprehensive
income (loss):
Foreign currency
translation adjustment (407,810) (276,151) (452,498) (260,447)
----------------------------------------------------------------------
Comprehensive income
(loss) $(216,084) $414,104 $(792,870) $(6,868,325)
----------------------------------------------------------------------
Basic weighted-average
shares 33,576,678 32,345,686 33,475,041 32,276,826
Diluted weighted-average
shares 39,132,316 34,948,619 33,475,041 32,276,826
----------------------------------------------------------------------
Basic earnings (loss) per
share $0.01 $0.02 $(0.01) $(0.21)
Diluted earnings (loss)
per share $0.01 $(0.01) $(0.01) $(0.21)
----------------------------------------------------------------------
Contact:
Investor Relations International
Haris Tajyar, 818-382-9700
htajyar@irintl.com
OR
Creative Vistas, Inc.
Sayan Navaratnam, 905-666-8676
sayan@creativevistasinc.com
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