Message #41 From:
TheMachine Date: April 4, 2009 02:04:28 AM
CVAS Stock News : Creative Vistas, Inc. Announces Record Revenues for Fiscal 2008
U.S. Expansion Strategy Generates Sales of Over $5.5 Million in First
Year, Driving Overall Revenue Increase of 21%
Creative Vistas, Inc. (OTCBB:CVAS), a leading provider of
broadband-related services as well as advanced video and surveillance
systems, today reported financial results for the Company’s fourth
quarter and fiscal year ended December 31, 2008.
Fourth Quarter and Year-End Highlights:
Revenues for fiscal year 2008 were up 21.2% from 2007 and down 3%
year-over-year from the fourth quarter of 2008.
Sales growth came mainly from its Dependable HomeTech (DHT) Division,
providing broadband-related services in Canada and U.S.
Sales from services to U.S. cable providers totaled more than $5.5
million in the first year of the Company’s U.S. expansion strategy.
As expected, start-up costs related to the U.S. expansion strategy
resulted in a net loss of ($0.51) for all of 2008 and ($0.17) for the
fourth quarter.
Sales Increase 21.2% for 2008; U.S. Revenues Grow from Zero to $5.5
Million
For the fourth quarter ended December 31, 2008, Company-wide revenues
totaled $11.10 million, down 3% from $11.47 million in the fourth
quarter of 2007. For the fiscal year 2008, revenues totaled $48.47
million, up 21.2% from $39.99 million in 2007.
The rise in full-year sales was due to increased business at the
Company’s broadband-related service division, operating under the
Dependable HomeTech brand. Revenues of this subsidiary rose 26% to
$40.65 million in 2008 from $32.32 million in 2007. In the fourth
quarter of 2008, DHT revenues were up slightly from a year earlier,
rising to $9.57 million from $9.53 million in the fourth quarter of
2007. The Company said the flat-to-lower quarter sales comparisons for
the Company as a whole showed the impact of economic slowdowns in Canada
and the U.S., where a building slump and retrenchment in consumer
spending reduced the volume of new cable or satellite installations and
service upgrades.
For the full year, the revenue increases were due primarily to two major
developments at DHT. One was the division’s purchase, in October 2007,
of the Canadian broadband provisioning firm XL Digital Services Inc.
This transaction gave DHT access to two territories of Rogers Cable Inc.
where it previously did not have a presence. Total revenue of this
segment for 2008 rose to $5.32 million from $1.08 million in 2007.
The other major development was DHT’s expansion into U.S. markets for
the first time in 2008. During the year, the division signed service
contracts with leading U.S. cable providers in three major metropolitan
areas. Revenues from U.S. business, which were non-existent in 2007,
totaled $5.54 million in 2008. In the fourth quarter of 2008 alone, they
totaled $2.08 million.
Expansion Costs Impact Operating and Net Results
For the fourth quarter of 2008, direct cost of sales totaled $9.46
million, resulting in a gross profit excluding depreciation of $1.64
million. Operating expenses totaled $3.00 million, leading to an
operating loss of ($1.37 million), compared to an operating profit of
$341,500 in the fourth quarter of 2007.
For the fiscal year 2008, the direct cost of sales totaled $38.78
million, resulting in a gross profit excluding depreciation of $9.69
million. Operating expenses totaled $15.80 million, leading to an
operating loss of ($6.11 million), compared to an operating profit of
$1.49 million in 2007. The most significant increase in year-over-year
expenses was from general and administrative expenses, which rose to
$10.45 million in 2008 from $5.64 million in 2007. Within this category,
salaries and training cost for management and administrative staff rose
to $5.70 million in 2008 from $2.55 million in 2007, largely due to the
need for additional staff required by DHT’s expansion into the U.S.
Net loss for the fourth quarter of 2008 was ($6.25 million) or ($0.17)
per fully diluted share, compared to net loss of ($508,700), or ($0.02)
per fully diluted share. For fiscal year 2008, the net loss was ($18.91
million) or ($0.51) per fully diluted share, compared to a net loss of
($581,606), or ($0.02) per fully diluted share, in fiscal 2007.
CEO Cites Success of U.S. Rollout
“Today’s results show that 2008, although a challenging year in the U.S.
and Canadian economies, was also a time of growth and accomplishment for
us,” says Creative Vistas CEO Dominic Burns. “The most significant
initiative was the expansion of our Dependable HomeTech business. We
have signed service contracts with the two largest cable providers in
the U.S., and we have solidified our position as the largest provider of
deployment and provisioning services to Canada’s top cable provider,
Rogers Communications. The most tangible sign of success for this
initiative has been the zero-to-$5.5 million growth in U.S. revenues for
DHT. The costs of this rollout have been considerable, and they are
reflected in the latest financial results. But we expect these to
decline sharply, in terms of percentage of revenues, as our
broadband-related business continues to expand.”
Mr. Burns continued, “In the coming year, we expect to continue facing
the headwinds of a recession that has sharply reduced two key sources of
revenue in cable and satellite-related business -- construction of new
homes (leading to new hookups) and consumer spending on service
upgrades. As the economy improves, our revenue growth should resume
while our costs stay well-controlled. We also will continue developing
our proprietary business intelligence (BI) software, which boosts the
efficiency of the cable and satellite providers we serve and gives us a
key advantage over less technologically advanced service firms.
Ultimately, as we have said before, we intend to deploy and/or market
our BI solutions in a much wider range of industries.”
EBITDA1 Shows Continued Sequential
Improvements
Earnings before interest, taxes, depreciation and amortization (EBITDA)
for the fourth quarter ended December 31, 2008 came to a loss of
($459,400), compared to positive EBITDA of $1.0 million in the fourth
quarter of 2007. EBITDA, excluding non-cash items in the fourth quarter
of 2008, was negative at ($39,900).
On a sequential basis, the Company’s fourth-quarter 2008 EBITDA results
showed a narrowing loss from the first three quarters of 2008. Negative
EBITDA was ($532,400) in the third quarter, ($831,573) in the second
quarter and ($962,426) in the first quarter. Negative EBITDA, excluding
non-cash items, was ($112,900) in the third quarter, ($513,387) in the
second quarter and ($868,786) in the first quarter of 2008.
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 net income and earnings per
share results for the fourth quarter and the twelve months of 2008 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.
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.
For further information on Creative Vistas, please visit www.creativevistasinc.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.
