Message #26 From:
Stock News Bot Date: August 15, 2006 08:41:00 AM
CVAS News Creative Vistas, Inc., Reports Record Revenues and Achieves Profitability in Second Quarter; Company Sees Rise in Gross Margins, Operating Income in a Record Quarter
WHITBY, Ontario--(BUSINESS WIRE)--Aug. 15, 2006--Creative Vistas, Inc., (OTCBB:CVAS), a leading provider of advanced security and surveillance products as well as broadband-related services, today reported financial results for the second quarter ended June 30, 2006. Highlights of the report include:
-- Record revenues, passing $7 million for the first time.
-- A return to profitability, both at operating and net levels.
-- Gross margin of 33%, up from 22% in Q2 2005.
Revenues for the second quarter of 2006 totaled $7.16 million, up 213% from $2.29 million in the second quarter of 2005. The increase was due to the acquisition of Cancable Inc., which was acquired by Creative Vistas in January 2006. For the first six months of 2006, revenues totaled $13.61 million, an increase of 165% from $5.14 million a year earlier.
Operating income for the second quarter of 2006 was $470,313, up from an operating loss of ($676,475) in the second quarter of 2005. For the first six months of 2006, operating income was $427,197, compared to an operating loss of ($759,694) in the year-earlier period.
Net income for the second quarter of 2006 was $414,104, or ($0.01) per fully diluted share, up from a net loss of ($104,168), or ($0.01) per fully diluted share, in the second quarter of 2005. For the first six months of 2006, the Company reported a net loss of ($6.87 million), most of which resulted from non-cash expenses incurred in the first quarter of 2006, or ($0.21) per fully diluted share, compared to net income of $1.22 million, which was mostly attributed to non-cash gains resulting from derivative calculations, or $0.04 per fully diluted share, in the first six months of 2005.
Margins, Operating Results Rise
Gross margin in the second quarter of 2006 was $2.36 million, or 33% of revenues, compared to $496,925, or 22% of revenues, in the second quarter of 2005. For the first six months of 2006, gross margin was $4.64 million, or 34% of revenues, compared to $1.40 million, or 27% of revenues, in the first six months of 2005.
Operating income for the second quarter of 2006 was $470,313, up from an operating loss of ($676,475) in the second quarter of 2005. For the first six months of 2006, operating income was $427,197, compared to an operating loss of ($759,694) in the year-earlier period.
Financing-related factors that accounted for most of the net loss in the first quarter and first half of 2006 had a net positive impact in the second quarter of 2006. Net financing expenses and amortization of deferred charges, together totaling $553,901, were offset by an upward adjustment of $773,843 in the value of derivative instruments (options and warrants) issued by the Company. The value of these derivatives will continue to rise or fall in an inverse relationship to the per-share value of CVAS stock.
CEO Cites Cancable Acquisition
Sayan Navaratnam, Chairman and CEO of CVAS, said, "These results from the latest quarter show that Creative Vistas' strategic initiatives are working as planned, not only expanding sales but significantly expanding margins as well. As can be seen from our return to profitability on both an operating and net basis, the acquisition of Cancable at the beginning of this year increased sales sharply while improving bottom-line results. Although financing factors such as interest expense and re-valuation of derivatives will continue to have a significant impact on net results in coming quarters, our operating profits are moving us toward consistent company-wide profitability, and EPS growth."
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 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.
Creative Vistas, Inc. June 30, 2006
Condensed Consolidated Balance Sheet (Unaudited)
Assets
Current Assets
Cash and bank balances $2,930,763
Accounts receivable, net of allowance for doubtful
accounts $218,120 4,304,130
Income tax recoverable 229,947
Inventory and supplies 796,876
Prepaid expenses 271,495
Note receivable 125,000
Due from related parties 2,281
----------------------------------------------------------------------
Total current assets 8,660,491
----------------------------------------------------------------------
Property plant and equipment, net of depreciation 3,027,586
Restricted cash 442,819
Deferred financing costs, net 761,469
Deferred income taxes 36,189
Customer list 2,235
Goodwill 4,736,405
----------------------------------------------------------------------
$17,667,195
----------------------------------------------------------------------
Liabilities and Shareholders' (Deficit)
Current Liabilities
Accounts payable and accrued liabilities $4,431,516
Current portion of obligation under capital leases 644,016
Deferred income 21,122
Deferred income taxes 25,858
Current portion of term notes 1,327,201
Current portion of other notes payable 119,040
Due to related parties 526
----------------------------------------------------------------------
Total current liabilities 6,569,279
Term notes 15,787,799
Notes payable to related parties 1,500,000
Obligation under capital lease 1,064,918
Due to related parties 206,120
Derivative financial instruments 2,425,717
----------------------------------------------------------------------
27,553,833
----------------------------------------------------------------------
Shareholders' (deficit)
Share capital
Authorized
50,000,000 no par value preferred shares
undesignated
100,000,000 no par value common shares 32,372,596
issued
Common stock
Deferred compensation (36,100)
Additional paid-in capital (139,395)
Accumulated other comprehensive income (325,462)
Accumulated (deficit) (9,385,681)
----------------------------------------------------------------------
(9,886,638)
----------------------------------------------------------------------
$17,667,195
----------------------------------------------------------------------
Creative Vistas, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
Three months ended Six months ended
----------------------------------------------------------------------
June 30 June 30
----------------------------------------------------------------------
2006 2005 2006 2005
----------------------------------------------------------------------
Contract and service
revenue
Contract $1,305,993 $2,050,122 $2,906,956 $4,594,066
Service 5,833,441 235,989 10,679,420 539,553
Others 18,273 3,126 27,888 4,168
----------------------------------------------------------------------
7,157,707 2,289,237 13,614,264 5,137,787
----------------------------------------------------------------------
Cost of sales
Contract 851,901 1,704,245 1,818,597 3,520,273
Service 3,942,787 88,037 7,160,582 213,798
----------------------------------------------------------------------
4,794,688 1,792,282 8,979,179 3,734,071
----------------------------------------------------------------------
Gross margin 2,363,019 496,955 4,635,085 1,403,716
----------------------------------------------------------------------
Operating expense
Project 289,718 352,701 692,131 686,122
Selling 161,982 239,648 300,271 421,243
General and
administrative 1,302,756 549,771 2,929,286 957,554
General and
administrative - Non-
cash stock compensation 138,250 31,310 286,200 98,491
----------------------------------------------------------------------
1,892,706 1,173,430 4,207,888 2,163,410
----------------------------------------------------------------------
Income (Loss) from
operations 470,313 (676,475) 427,197 (759,694)
----------------------------------------------------------------------
Interest and other
expenses (income)
Net financing expenses 503,656 95,610 3,553,441 217,683
Amortization of deferred
charges 50,245 115,403 693,934 240,782
Liquidated damages - 137,703 - 137,703
Derivative instruments (773,843) (913,387) 2,787,700 (2,563,074)
----------------------------------------------------------------------
(219,942) (564,671) 7,035,075 (1,966,906)
----------------------------------------------------------------------
Income (loss) before
income taxes 690,255 (111,804) (6,607,878) 1,207,212
Income taxes - - - -
----------------------------------------------------------------------
Net income (loss) 690,255 (111,804) (6,607,878) 1,207,212
----------------------------------------------------------------------
Other comprehensive
income (loss):
Foreign currency
translation adjustment (276,151) 7,636 (260,447) 9,229
----------------------------------------------------------------------
Comprehensive income
(loss) $414,104 $(104,168)$(6,868,325)$1,216,441
----------------------------------------------------------------------
Basic weighted-average
shares 32,345,686 30,246,177 32,276,826 30,190,895
----------------------------------------------------------------------
Diluted weighted-average
shares 34,948,619 30,246,177 32,276,826 30,190,895
----------------------------------------------------------------------
Basic earnings (loss) per
share $0.02 $(0.01) $(0.21) $0.04
Diluted earnings (loss)
per share $(0.01) $(0.01) $(0.21) $0.04
----------------------------------------------------------------------
