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
May 18, 2009 9:00:00 AM
Copyright Business Wire 2009
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View Additional ProfilesWHITBY, Ontario & LOS ANGELES--(BUSINESS WIRE)-- Creative Vistas, Inc. (OTCBB: CVAS), a leading provider of broadband-related services as well as advanced video and surveillance systems, today announced that it has returned to positive EBITDA (earnings before interest, taxes, depreciation and amortization) in its first quarter ended March 31, 2009.
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.
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.
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.
March 31, 2009 December 31, 2008
Condensed Consolidated Balance Sheets
(Unaudited)
Assets
Current Assets
Cash and bank balances $ 3,694,657 $ 4,770,337
Accounts receivable, net of allowance for 4,436,023 4,571,327
doubtful accounts of $255,689 and $323,183
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 8,296,072 9,214,623
depreciation
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 2,061,616 2,125,312
leases
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
Source: Creative Vistas, Inc.
----------------------------------------------
Investor Relations International for Creative Vistas
Haris Tajyar
1-818-382-9702
htajyar@irintl.com
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