Press Release
Creative Vistas Inc. Announces Record Fourth Quarter
and Fiscal Year Results for 2006
Monday April 16, 11:00 am ET
Company Reports $30.5 Million in Full-Year
Revenues, Topping Guidance, With EBITDA, Excluding Non-Cash
Compensation, of $3.1 Million
WHITBY, Ontario--(BUSINESS WIRE)--Creative Vistas,
Inc., (OTCBB:CVAS - News), a leading provider of advanced
video security and surveillance products as well as
broadband-related services, today reported financial
results for the fourth quarter and fiscal year ended
December 31, 2006.
For the fourth quarter ended December 31, 2006, revenues
totaled $7.7 million, up 353% from $1.7 million in the
fourth quarter of 2005. The increase was primarily due
to revenues from the CVAS subsidiary Cancable Inc.,
acquired in January 2006. For the full fiscal year ended
December 31, 2006, revenues totaled $30.5 million, up
250% from $8.7 million in 2005. As with quarterly revenues,
the increase was due primarily to the Cancable acquisition.
Revenues for both the fourth quarter and full year
2006 were above the company's most recent guidance of
$7.5 million and $30 million, respectively. That guidance,
given in January 2007, was an increase from an original
forecast of $26 million in 2006 revenues.
Net loss for the fourth quarter of 2006 was ($1.2M),
or ($0.03) per fully diluted share, compared to net
income of $212,000, or ($0.07) per fully diluted share,
in the fourth quarter of 2005. For the full year 2006,
net loss was ($5.5M), or ($0.17) per fully diluted share,
compared to income of $827,000 and an adjusted loss,
on a fully-diluted share basis, of ($0.06) in 2005.
For fiscal 2006, there was non-cash stock compensation
of $682,000, amortization and depreciation in the amount
of $2,369,000, derivative instrument expenses of $1,106,000
and non-cash payment interest of $1,913,000. In 2005,
there was non-cash stock compensation in the amount
of $351,000, amortization and depreciation in the amount
of $494,700, derivative instrument income of $3,734,900,
written off goodwill in the amount of $503,900 and non-cash
payment for liquidated damages of $137,700.
EBITDA(1) Trend Points to Profit Growth
Quarterly and annual net income figures for both 2006
and 2005 were affected by substantial swings in the
valuation of derivative liabilities and other non-operating
factors. The Company believes that EBITDA is an important
measure of operating performance. It eliminates items
that have less bearing on the Company's operating performance
and thus highlights trends in our core business that
may not otherwise be apparent when relying solely on
GAAP financial measures. For the fourth quarter of 2006,
the operating loss was ($580,900) with the addition
of the depreciation of the capital assets in the amount
of $190,900 and amortization of intangible assets in
the amount of $600,000, the EBITDA was $210,000. For
the fourth quarter of 2005, the operating loss was ($87,000)
with the addition of depreciation of the capital assets
in the amount of $6,600, the negative EBITDA was ($80,400).
EBITDA was $0.3 million up from the loss of ($80,000)
in the fourth quarter of 2005. For all of 2006, the
operating income was $802,300 with the addition of the
depreciation of the capital assets in the amount of
$986,000 and amortization of intangible assets in the
amount of $600,000, the EBITDA was $2.4M. For all of
2005, the operating loss was ($1,146,300) with the addition
of the depreciation of the capital assets in the amount
of $44,000, the negative EBITDA was ($1.1M). Included
in the EBITDA for 2006 was non-cash stock compensation
in the amount of $682,000 compared to $351,000 for fiscal
2005. The EBITDA excluding non-cash compensation amounted
to $3.1 million for 2006.
On the Company's balance sheet, cash and equivalents
totaled $3,560,181 on December 31, 2006, up from $532,694
a year earlier.
Sayan Navaratnam, Chairman and CEO of Creative Vistas,
said, "The year 2006 was a very successful year
and notable as a time of transition and integration
as well as growth. We successfully incorporated Cancable
into our corporate family, and as the year went on we
increasingly saw the positive impact of this acquisition.
Cancable's revenue and gross margins have had a positive
impact on our results over the past year; we expect
additional value from this division over the next three
to five years as we plan to leverage the Cancable platform
of broadband-related services to expand our market for
networked video surveillance services and related networked
products. 2006 was a year in which we experienced successful
growth in revenue and EBITDA while continuing to invest
in R&D to further develop video based surveillance
technologies to aid our growth strategy in the long
run. Finally, the latest quarter shows us to be consistently
profitable on an EBITDA basis - a fact that will enable
us to shift over time to internal cash flow as our primary
source of growth capital. Already we can see that shift
occurring, as witnessed by the strengthening of our
cash position during 2006."
14% Revenue Rise Seen in First-Quarter Guidance
For the first quarter ending March 31, 2007, the Company
said it expects revenues of approximately $7.4 million,
or 14% above the $6.5 million reported in the first
quarter of 2006. EBITDA, excluding non-cash expenses,
is expected to be positive for a sixth consecutive quarter.
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
or info@creativevistasinc.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 also
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.
Consolidated Balance Sheets
December 31 2006 2005
----------------------------------------------------------------------
Assets
Current Assets
Cash and bank balances $ 3,560,181 $ 532,694
Accounts receivable, net of allowance
for doubtful accounts 3,861,036 2,620,090
Income tax recoverable 351,344 501,966
Inventory 764,077 580,350
Prepaid expenses 237,288 31,353
Note receivable - 93,744
Due from related parties 2,203 2,203
----------------------------------------------------------------------
Total current assets 8,776,129 4,362,400
Property and equipment, net of depreciation 3,824,555 804,907
Deposits 156,080 -
Goodwill 2,893,845 -
Restricted cash 339,028 -
Deferred financing costs, net 647,542 600,479
Other assets - 35,210
Intangible assets 1,600,000 -
Deferred income taxes 32,746 13,779
----------------------------------------------------------------------
$18,269,925 $5,816,775
----------------------------------------------------------------------
Liabilities and Shareholders' Equity (Deficiency)
Current Liabilities
Revolving credit facilities $ - $ 2,218,435
Accounts payable and accrued liabilities 4,654,988 2,501,053
Current portion of obligation under capital
leases 710,375 -
Deferred income 68,245 15,875
Deferred income taxes 22,770 3,803
Current portion of convertible notes - 1,100,000
Current portion of term notes 2,439,046 -
Current portion of other notes payable 28,736 143,678
Due to related parties 2,501 903
----------------------------------------------------------------------
Total current liabilities 7,926,661 5,893,747
Term notes 14,430,776 -
Convertible notes - 1,171,499
Notes payable to related parties 1,500,000 1,500,000
Other notes payable - 28,736
Obligation under capital lease 1,789,365 -
Due to related parties 199,025 199,025
Derivative financial instruments - 328,280
----------------------------------------------------------------------
25,845,827 9,121,287
----------------------------------------------------------------------
Stockholders' (deficiency)
Share capital
Authorized
50,000,000 no par value preferred shares
undesignated
100,000,000 no par value common shares
33,253,358 and 32,101,706 shares issued
and outstanding
Common stock 517,990 -
Deferred compensation - (164,000)
Additional paid-in capital 3,887,706 (297,695)
Accumulated other comprehensive losses (117,736) (65,015)
Accumulated (deficit) (11,863,862) (2,777,802)
------------------------
(7,575,902) (3,304,512)
------------------------
$18,269,925 $5,816,775
------------------------
Creative Vistas, Inc.
Consolidated Statement of Operations
For the year ended December 31 2006 2005
----------------------------------------------------------------------
Revenue $ 30,456,897 $ 8,718,043
Cost of sales 20,511,034 5,831,621
----------------------------------------------------------------------
Gross margin 9,945,863 2,886,422
----------------------------------------------------------------------
Operating expense
Selling General & Administrative 6,875,016 3,637,436
Selling General & Administrative - non-cash
stock compensation 681,990 351,038
Depreciation of capital assets and
amortization of intangible assets 1,586,516 44,215
----------------------------------------------------------------------
9,143,522 4,032,689
----------------------------------------------------------------------
Income (loss) from operations 802,341 (1,146,267)
----------------------------------------------------------------------
Interest expenses and other expenses (income)
Net financing expenses 2,704,254 2,307,270
Net financing expense - non-cash 1,913,571 -
Written off Goodwill - 503,900
Liquated damages - 137,703
Amortization of deferred charges 782,881 450,507
Derivative instruments 943,527 (5,373,221)
----------------------------------------------------------------------
6,344,233 (1,973,841)
----------------------------------------------------------------------
Income (loss) before income taxes (5,541,892) 827,574
Income taxes - -
----------------------------------------------------------------------
Net income (loss) (5,541,892) 827,574
----------------------------------------------------------------------
Other comprehensive (loss):
Foreign currency translation adjustment (52,721) (51,306)
----------------------------------------------------------------------
Comprehensive loss $ (5,594,613)$ 776,268
----------------------------------------------------------------------
Basic weighted-average shares 32,394,008 30,945,604
----------------------------------------------------------------------
Basic earnings (loss) per share $ (0.17)$ 0.02
----------------------------------------------------------------------
Diluted (loss) per share $ (0.17)$ (0.06)
----------------------------------------------------------------------
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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