Reported 11% revenue decline offset by 41% gain in gross profits

LED signals manufacturer Carmanah Technologies Corp reported mixed results for its third quarter of 2018, with a slight revenue decline offset by higher gross profits.

The company reported revenues of US$12.9m for the quarter ended September 30, 2018, down $1.6m or 11.3% over the same period in 2017. Part of the decline was attributed to a backlog in deliveries, with Carmanah’s Finland-based Sabik Marine division incurring a decline in revenues despite strong order activity. It is expected that order backlogs will return to normal levels during the first quarter of 2019.

On the positive side, gross margins for Q3 2018 were reported as 41.4%, up from 37.4% reported for the same period in 2017. Gross margins for the quarter include a $0.8m inventory write-down as certain legacy products were made obsolete by the development of the new EverGen product offering.

An increase in core operating expenditures for Q3 – $4.9m compared to $4.6m for Q3 2017 – was attributed to higher amortisation costs relating to acquired assets as well as increased research and development costs.

Adjusted EBITDA was $1.5m, down 40.7% from the $2.4m reported for the same period in 2017.