Press Release
Creative Vistas Returns to Positive EBITDA in First Quarter of 2009
Company’s Proprietary Business Intelligence Software Enables Continued Expansion Across U.S. Cable Industry and Path Towards Profitability
Financial Highlights:
- Revenues for the first quarter of 2009 were down 15.2% year-over-year to $9.14 million.
- Sales in U.S. rise 600% from year earlier to $1.97 million.
- Cuts in SG&A and financing costs help reduce net loss to ($0.03) from ($0.18) year-over-year.
- Company returns to positive EBITDA, at $495,600
Revenue Mix Shifts From Canada Toward U.S.
Revenues for the first quarter of 2009 totaled $9.14 million, down 15.2% from $10.78 million in the first quarter of 2008. The decline was mainly due to the exchange rate fluctuations as well as the weakened economy. Dependable HomeTech (DHT) reported overall revenues of $7.46 million in the first quarter of 2009, compared to $8.87 in the first quarter of 2008. DHT achieved revenues of $1.97 million from the U.S. in the first quarter, up more than 600% from $280,000 in the first quarter of 2008. As a percentage of DHT’s revenues, the U.S. cable industry increased to 26.4% in the first quarter of 2009 from 3.2% a year earlier.
Company’s Focus on Business Intelligence Software and U.S. Expansion Strategy Brings Company Closer to Profitability
Operating expenses for the first quarter of 2009 totaled $2.44 million, down from $4.13 million a year earlier. Most of the decrease was due to a drop of $1.68 million in selling, general and administrative (SG&A) expenses that were incurred last year as part of DHT’s one-time start-up expenses stemming from its U.S. expansion strategy.
The Company reported a loss from operations in the first quarter of 2009 of ($286,600), compared to a year-earlier operating loss of ($1.65 million). The net loss narrowed to ($1.77 million), or ($0.03) per fully diluted share, from ($6.39 million), or ($0.18) per fully diluted share, in the first quarter of 2008. The smaller net loss was due both to improved operating results and a reduction in net financing expenses, to $605,700 in the first quarter of 2009 from $4.43 million a year earlier. The higher costs in the first quarter of 2008 were primarily due to the issuing of warrants valued at $3.72 million, which were charged to financing costs during that quarter. There was no such balance for the first quarter of 2009.
Company Returns to Positive EBITDA
EBITDA totaled $495,600 in the first quarter of 2009, compared to negative EBITDA of ($962,400) a year earlier. 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. As in prior quarters, the Company’s net income and earnings per share (EPS) results for the first quarter of 2009 have been affected substantially by non-cash adjustments related to the Company’s capital structure. 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.
CEO Notes the U.S. Expansion Progress and Focus on Business Intelligence Software
Dominic Burns, Chief Executive Officer of Creative Vistas, commented, “Our results from the first quarter of 2009 is a clear reflection of the impact of a challenging business environment offset by continued progress in our U.S operations. The decline in revenues from DHT is a result of strong price pressures in Canada’s cable industry in addition to weakening consumer spending trends. We are pleased, however, that our U.S. revenues are now running at an annual rate of approximately $7 million, up from virtually nil at the start of 2008. We were able to establish our presence in this new and much larger revenue channel primarily due to our continued focus on our proprietary business intelligence (BI) software. We are rapidly finding that our BI technology is becoming a critical selling point in a recessionary market that has customers demanding for technology that can help them remain competitive and financially stable. The return to positive EBITDA is an important milestone marking this progress,” concluded Mr. Burns.
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 broadband-related services as well as security technologies and systems. Through its subsidiary, Dependable HomeTech, 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., 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.
| Creative Vistas, Inc. |
| Condensed Consolidated Statements of Operations |
| (Unaudited) |
| |
|
Three months ended |
| |
|
March 31, |
| |
|
2009 |
|
2008 |
| Contract and service revenue |
|
|
|
|
| Contract |
|
$ 1,224,040 |
|
$ 1,479,319 |
| Service |
|
7,909,147 |
|
9,291,977 |
| Others |
|
8,986 |
|
10,059 |
| |
|
9,142,173 |
|
10,781,355 |
| Cost of sales |
|
|
|
|
| Contract |
|
628,514 |
|
900,707 |
| Service |
|
6,357,928 |
|
7,407,221 |
| Project Expenses |
|
223,653 |
|
326,055 |
| Selling Expenses |
|
199,007 |
|
218,597 |
| General and administrative expenses |
|
1,235,470 |
|
2,891,202 |
| Depreciation expense |
|
701,846 |
|
500,885 |
| Amortization of intangible assets |
|
82,392 |
|
190,167 |
| |
|
9,428,810 |
|
12,434,834 |
| Loss from operations |
|
(286,637) |
|
(1,653,479) |
| Interest and other expenses |
|
|
|
|
| Net financing expenses |
|
605,665 |
|
4,432,917 |
| Amortization of deferred charges |
|
40,998 |
|
44,215 |
| Foreign currency translation loss |
|
243,690 |
|
255,234 |
| |
|
890,353 |
|
4,732,366 |
| (Loss) before income taxes |
|
(1,176,990) |
|
(6,385,845) |
| Income taxes |
|
- |
|
- |
| Net (loss) |
|
(1,176,990) |
|
(6,385,845) |
| Other comprehensive income (loss): |
|
|
|
|
| Unrealized loss – available for sale securities |
|
- |
|
(2,858,282) |
| Foreign currency translation adjustment |
|
299,529 |
|
180,671 |
| Comprehensive (loss) |
|
$ (877,461) |
|
$ (9,063,456) |
| Basic and diluted weighted-average shares |
|
37,391,761 |
|
36,248,724 |
| Basic and diluted earnings (loss) per share |
|
$ (0.03) |
|
$ (0.18) |
| Creative Vistas, Inc.
Condensed Consolidated Balance Sheets |
|
March 31, 2009 |
|
December 31, 2008 |
|
|
(Unaudited) |
|
|
| Assets |
|
|
|
|
| Current Assets |
|
|
|
|
| Cash and bank balances |
|
$ 3,694,657 |
|
$ 4,770,337 |
| Accounts receivable, net of allowance for doubtful accounts of $255,689 and $323,183 |
|
4,436,023 |
|
4,571,327 |
| Income tax recoverable |
|
184,648 |
|
188,525 |
| Inventory and supplies |
|
701,588 |
|
829,318 |
| Prepaid expenses |
|
383,992 |
|
289,638 |
| Due from related parties |
|
2,028 |
|
2,094 |
| Total current assets |
|
9,402,936 |
|
10,651,239 |
| Property plant and equipment, net of depreciation |
|
8,296,072 |
|
9,214,623 |
| Deposits |
|
339,500 |
|
460,376 |
| Intangible assets |
|
753,968 |
|
850,136 |
| Deferred financing costs, net |
|
427,734 |
|
483,331 |
| Deferred income taxes |
|
35,042 |
|
35,343 |
| |
|
$ 19,255,252 |
|
$ 21,695,048 |
| Liabilities and Shareholders' (Deficit) |
|
|
|
|
| Current Liabilities |
|
|
|
|
| Bank Indebtedness |
|
$ 1,354,762 |
|
$ 1,581,912 |
| Accounts payable and accrued liabilities |
|
5,226,099 |
|
5,800,061 |
| Current portion of obligation under capital leases |
|
2,061,616 |
|
2,125,312 |
| Deferred income |
|
98,096 |
|
118,595 |
| Deferred income taxes |
|
25,858 |
|
25,858 |
| Current portion of term notes |
|
1,750,000 |
|
1,750,000 |
| Current portion of other payable |
|
238,095 |
|
245,902 |
| Due to related parties |
|
6,093 |
|
6,292 |
| Total current liabilities |
|
10,760,619 |
|
11,653,932 |
| Term notes |
|
13,878,920 |
|
14,062,290 |
| Notes payable to related parties |
|
1,500,000 |
|
1,500,000 |
| Obligation under capital lease |
|
4,064,250 |
|
4,554,240 |
| Due to related parties |
|
183,230 |
|
189,237 |
| |
|
30,387,019 |
|
31,959,699 |
| Shareholders' (deficit) |
|
|
|
|
| Share capital |
|
|
|
|
Authorized 50,000,000 no par value preferred shares undesignated, none issued or outstanding 100,000,000 no par value common shares 37,391,761 at March 31, 2009 and 37,224,926 December 31, 2008 issued and outstanding |
|
|
|
|
| Common stock |
|
6,533,191 |
|
6,488,137 |
| Additional paid-in capital |
|
13,970,918 |
|
14,005,627 |
| Accumulated (deficit) |
|
(32,534,913) |
|
(31,357,923) |
| Accumulated other comprehensive income |
|
899,037 |
|
599,508 |
| |
|
(11,131,767) |
|
(10,264,651) |
| |
|
$ 19,255,252 |
|
$ 21,695,048 |
Contact:
Investor Relations International
Haris Tajyar, 818-382-9700
htajyar@irintl.com
|
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