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Creative Vistas > Investor Relations > Headlines > Aug 14, 2008

Press Release

Creative Vistas Reports 32% Increase in Second Quarter Revenues, Driven by U.S. Expansion

Creative Vistas Inc. today reported financial results for the second quarter ended June 30, 2008. Following are key highlights for the quarter:

  • Booming Dependable HomeTech division helps drive revenues up 32% for second quarter and 35% for first half
  • Company projects positive EBITDA for third quarter and second half of 2008
  • U.S. sales rise from zero at start of 2008 to $1 million in second quarter
  • US Sales expected to continue to increase significantly over the next two quarters. US Revenues expected to grow to an annual run rate of $15 to $18 Million a year by year end.
  • Capital infusion of $5.6 million from 180 Connect sale to finance accelerated growth beginning in third quarter

For the second quarter ended June 30, 2008, the Companys revenues totaled $12.59 million, up 32% from $9.58 million in the second quarter of 2007. The increase was primarily due to sharply increased sales in the Companys Dependable HomeTech division (formerly Cancable Inc.), which performs installation, repair and other services for major broadband providers in Canada and the U.S. Revenues from the U.S. expansion, which began earlier in 2008, reached $1 million in the second quarter and are projected to growth to an annual run-rate of at least $15 million to $18 million by the end of the current fiscal year.

Net loss for the second quarter of 2008 was ($2.95 million), or ($0.08) per fully diluted share, compared to net income of $191,726, or $0.01 per fully diluted share, in the second quarter of 2007. As expected, the shift to a loss reflected higher general and administrative expenses, which rose to $3.95 million from $2.00 million a year earlier, primarily because of non-recurring costs related to the Companys U.S. expansion strategy. It also included a non-cash adjustment for the issuance of stock-purchase warrants and common stock.

Earnings before interest, taxes, depreciation and amortization (EBITDA) were negative in the second quarter of 2008, at ($831,600), compared to positive EBITDA of $974,800 a year earlier. As in prior quarters, the net income and EPS results for the second quarter of 2008 have been affected substantially by adjustments related to Creative Vistas capital structure. For that reason, the Company believes EBITDA provides a useful tool, in conjunction with measures recognized under generally accepted accounted principles (GAAP), for gauging the ongoing performance of its operating units. However, CVAS does not consider EBITDA an adequate substitute for GAAP-recognized measures.

On the balance sheet, CVAS reported cash and cash equivalents totaling $2.54 million on June 30, 2008, compared to $1.96 million on December 31, 2007. Long-term liabilities on June 30, 2008 totaled $21.12 million, compared to $18.79 million at the end of 2007.

Subsequent to the end of the second quarter of 2008, CVAS realized proceeds of approximately $5.6 million from the sale of its stake in 180 Connect Inc., a major U.S. provider of services to the cable and satellite industry. The acquisition of 180 Connect by DirecTV Group, Inc. (Nasdaq: DTV - News) was completed on July 9, 2008.

CEO Projects Sharp U.S. Growth, Positive EBITDA in 2008

Dominic Burns, CEO of Creative Vistas, commented, The big story for Creative Vistas in the second quarter of 2008, as in the first, was our rapid expansion in the U.S., driven by the superior field services of our Dependable HomeTech division. DHT is just beginning to take advantage of the competitive edge provided by its proprietary business intelligence software, which gives cable-system operators an unparalleled analysis on customer contacts, fuel costs and other critical operational data.

Mr. Burns continued, Our rapid growth south of the Canadian border has temporarily impacted net income and EBITDA with non-recurring costs. However, we expect that the negative EBITDA trend will reverse in the third quarter and second half, generating positive EBITDA excluding non-cash expenses for the last two quarters of 2008.. Helping boost our growth in the second half will be the infusion of $5.6 million in working capital that we gained in July 2008 from the sale of our stake in 180 Connect. Ultimately, we expect our new U.S. operations, which should grow from zero to nearly $15 to $18 million a year run rate in less than 12 months, to also become a key source of revenues for the company in the future.

First Half Revenues Rise 35%

For the six months ended June 30, 2008, Creative Vistas reported revenues of $23.38 million, up 35% from $17.37 million a year earlier. As in the second quarter, the increase was due largely to rising sales at Dependable HomeTech, both in the U.S. and Canada.

Net loss for the first six months of 2008 was ($9.33 million), or ($0.25) per fully diluted share, compared to a net loss of ($340,372), or ($0.01) per fully diluted share, in the first six months of 2007. The increase in net loss was due to expansion-related general and administrative costs, financing expenses and non-cash adjustment for the issuance of stock purchase warrants and common stock.

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 For further information on Creative Vistas, please visit

About Creative Vistas

Creative Vistas Inc. is a leading provider of broadband-related services as well as security technologies and systems. Through its subsidiary Dependable HomeTech, formerly known as Cancable Inc., Creative Vistas provisions the deployment and servicing of broadband technologies to the commercial and residential market in Canada and the U.S. Through its subsidiaries AC Technical Systems Ltd. and Iview Digital Video Solutions Inc., it offers proprietary and non-proprietary technologies to the integrated electronic security and surveillance market. Its growing list of customers for broadband-related services include major cable-system operators in Ontario, Canada and U.S. metropolitan markets including New Orleans and Baton Rouge, La., and Charlotte, N.C. Its security and surveillance systems are used by numerous high-profile clients including government, school boards, retail outlets, banks and hospitals. 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 Sheets

June 30, 2008


December 31, 2007

Current Assets
Cash and bank balances $ 2,540,203 $ 1,960,340
Accounts receivable, net of allowance for doubtful accounts of $469,980 and $405,432



Income tax receivable 293,602 448,126
Inventory and supplies 976,646 1,043,815
Prepaid expenses 622,479 270,930
Due from related parties 2,530   2,581
Total current assets 10,702,251   9,913,343
Property plant and equipment, net of depreciation 8,862,756 6,352,014
Deposits 329,500 125,498
Goodwill 3,097,485 3,101,598
Intangible assets 1,323,267 1,717,003
Other investments available for sale securities 5,530,200 -
Restricted cash - 53,430
Deferred financing costs, net 621,423 551,747
Deferred income taxes 37,315   37,547
  $ 30,504,197   $ 21,852,180
Liabilities and Shareholders' (Deficit)
Current Liabilities
Bank indebtedness $ 2,853,108 $ -
Accounts payable and accrued liabilities 6,428,880 6,074,212
Current portion of obligations under capital leases 1,673,482 1,195,366
Deferred income 181,761 91,900
Deferred income taxes 25,858 25,858
Current portion of term notes 1,750,000 2,240,356
Current portion of other payable 297,030 303,030
Due to related parties 7,601   8,143
Total current liabilities 13,217,720   9,938,865
Term notes 14,811,219 13,565,421
Notes payable to related parties 1,500,000 1,500,000
Obligations under capital lease 4,575,296 3,184,103
Other payables - 303,030
Due to related parties 228,584   233,203
  34,332,819   28,724,622
Shareholders' (deficit)
Share capital
50,000,000 no par value preferred shares undesignated, none issued or outstanding
100,000,000 no par value common shares 37,224,926 and 34,494,623 issued and outstanding
Common stock 6,488,137 1,439,307
Deferred compensation (636,372) -
Additional paid-in capital 13,757,869 4,958,871
Accumulated (deficit) (21,780,236) (12,445,468)
Accumulated other comprehensive (losses)
Foreign currency translation adjustment (741,371) (825,152)
Unrealized loss on available for sale securities (916,649)   -
  (3,828,622)   (6,872,442)
  $ 30,504,197   $ 21,852,180

Creative Vistas, Inc.          
Condensed Consolidated Statements of Operations and Comprehensive Losses
    Three months ended   Six months ended
    June 30   June 30
    2008   2007   2008   2007
Contract and service revenue        
Contract $ 1,786,195 $ 1,534,017 $ 3,265,514 $ 2,861,264
Service 10,803,125 8,023,515 20,095,102 14,477,444
Other   5,541   19,049   15,600   31,493
    12,594,861   9,576,581   23,376,216   17,370,201
Cost of sales
Contract 1,083,059 889,505 1,983,766 1,811,501
Service   8,669,381   5,735,967   16,076,602   10,345,667
    9,752,440   6,625,472   18,060,368   12,157,168
    2,842,421   2,951,109   5,315,848   5,213,033
Operating expenses
Project 266,018 323,637 592,073 605,303
Selling 261,382 211,726 479,979 387,570
General and administrative   3,954,241   1,996,591   7,536,495   3,747,547
    4,481,641   2,531,954   8,608,547   4,740,420
Income (Loss) from operations   (1,639,220)   419,155   (3,292,699)   472,613
Interest and other expenses
Net financing expenses 1,383,466 740,091 5,816,383 1,299,289
Amortization of deferred charges 45,700 46,575 89,915 91,851
Foreign currency translation gain (loss)  








    1,309,707   227,429   6,042,073   812,985
Income (loss) before income taxes (2,948,927) 191,726 (9,334,772) (340,372)
Income taxes   -   -   -   -
Net income (loss)   (2,948,927)   191,726   (9,334,772)   (340,372)
Other comprehensive income (loss):
Unrealized gain (loss) available for sale securities





Foreign currency translation adjustment  








Comprehensive (loss)   $ (1,104,185)   $ (216,084)   $ (10,703,919)   $ (792,870)
Basic weighted-average shares 37,147,384 33,576,678 36,667,096 33,475,041
Diluted weighted-average shares   37,147,384   39,132,316   36,667,096   33,475,041
Basic earnings (loss) per share $ (0.08) $ 0.01 $ (0.25) $ (0.01)
Diluted earnings (loss) per share   $ (0.08)   $ 0.01   $ (0.25)   $ (0.01)


Investor Relations International
Haris Tajyar, 818-382-9700
Creative Vistas, Inc.
Sayan Navaratnam, 905-666-8676