Liuyang Fireworks Reports Six Month and Fiscal Year-end Financial Results
29 Oktober 2011 - 1:00AM
PR Newswire (Canada)
-6 month stub period with change of year-end date- TORONTO, Oct.
28, 2011 /CNW/ - Liuyang Fireworks Limited ("Liuyang" or "the
Company") today reported financial performance for the six month
period ended June 30, 2011. Liuyang has changed its year end to
June 30(th) and therefore an audit was completed for the period
from January 1, 2011 to June 30, 2011 as explanation of which is
presented below. Highlights for the 6 month period ending June 30,
2011 -- Improved domestic sales and improved pricing led to a 28.7%
increase in revenues during the 6 month period to June 30th, 2011
compared with the same period of 2010. -- Domestic Chinese sales
have grown by 85.2% during the 6 months with record sales during
the 2011 Chinese New Year season. Further, the company has had a
successful marketing program for 2012 with the completion of three
fireworks displays as well as organizing the 10th China (Liuyang)
International Fireworks Festival -- The Company successfully passed
on higher raw material and labour costs and achieved gross margin
of 36.9% for the six month period compared with 35.0% during the
same period in 2010. -- The Company achieved 6 month EDITDA of
$0.52 million representing 1.7% growth compared with the same
period of 2010. -- The Company successfully completed a private
placement of 12,033,700 shares for gross proceeds of $2.17 million.
This financing was used to acquire targeted fireworks wholesalers
and manufacturers; -- As at June 30, 2011 the Company had cash of
$5.8 million and total bank debt of $5.4 million , "We are very
pleased with our progress in consolidating the domestic Chinese
distribution channel while continuing to grow our international
business. said Mr.Hu, Liuyang's president and CEO.. "Over the
past year, we have successfully integrated our two domestic
wholesale acquisitions into our operation and have grown the
domestic sales to 45% of total revenues for the six months to June
30, 2011. We expect improvement in domestic sales in 2012 spring
festival sales season as we continue to expand our domestic sales
network." SUMMARY FINANCIAL STATEMENTS
______________________________________________________________________________________
|In thousands except share and % data | Six| Six| | | | | months|
months| | | | | ended| ended| Year| Year| | | June| June| ended|
ended| | | 30,| 30,|December|December| | | 2011| 2010|31, 2010|31,
2009|
|____________________________________________________|_______|_______|________|________|
|Revenue | $7,288| $5,662| $14,081| $13,408|
|____________________________________________________|_______|_______|________|________|
|Gross profit | $2,688| $1,982| $5,289| $5,549|
|____________________________________________________|_______|_______|________|________|
|Gross margins | 36.9%| 35.0%| 37.6%| 41.3%|
|____________________________________________________|_______|_______|________|________|
|EBITDA | $522| $477| $1,343| $1,590|
|____________________________________________________|_______|_______|________|________|
|EBITDA before stock-based compensation | $616| $757| $1,701|
$2,963|
|____________________________________________________|_______|_______|________|________|
|Net Income | $296| $366| $944| $637|
|____________________________________________________|_______|_______|________|________|
|Net Income (loss) per share Basic | 0.006| 0.008| 0.021| 0.016| |
Diluted| 0.005| 0.007| 0.019| 0.015|
|____________________________________________________|_______|_______|________|________|
|Balance Sheet Highlight | | | | |
|____________________________________________________|_______|_______|________|________|
|Cash | $5,829| $1,599| $2,031| $1,999|
|____________________________________________________|_______|_______|________|________|
|Current ratio | 1.63:1| 1.80:1| 1.48:1| 1.88:1|
|____________________________________________________|_______|_______|________|________|
|Working capital | $6,406| $3,960| $3,806| $4,507|
|____________________________________________________|_______|_______|________|________|
|Total assets |$18,413|$10,646| $13,676| 18,324|
|____________________________________________________|_______|_______|________|________|
|Debt to equity ratio | 1.23:1| 0.86:1| 1.41:1| 0.39:1|
|____________________________________________________|_______|_______|________|________|
Review of Fiscal Year 2011 Financial Results Liuyang changed its
fiscal year end to June 30 to better align the Company's financial
reporting, tax planning, and business cycles with customers and
suppliers. As such, Liuyang is reporting its transitional fiscal
2011 financial results for the six-month period ending June 30,
2011. The first full fiscal period will be for the twelve months
ended June 30, 2012. During the six month period ended June 30.
2011, revenues were $7.29 million compared with $5.67 million for
the same period of 2010. This represented an increase of
28.7% which is mainly due to expanded production capacity at
certain facilities, production improvements, and higher selling
prices. Gross profit was $2.69 million for six months ended June
30, 2011, compared to $1.98 million for the period ending June 30,
2010, representing an increase of 35.6% gross margin as a
percentage of sales for six months ended June 30, 2011 increased to
36.9% from 35% during the period ending June 30, 2010. The increase
in gross profit was attributable to higher products volume and the
higher revenue achieved as a result of the Company's increased
focus on domestic China market. EBITDA for six months ended June
30, 2011 increased by 1.7% to $0.52 million from $0.51 million
during the same period of 2010. Net earnings for the six months
ended June 30, 2011 decreased by or 19.1% to $0.3 million compared
with the six months ended June 30, 2010. The decrease in net
earnings was due to higher general & administrative expenses as
well as lower government subsidies income during the period. At
June 30, 2011, the Company reported cash of $5.83 million and
working capital of $6.41 million. These figures compare to $2.03
million and $5.67 million respectively at June 30, 2010. Liuyang's
consolidated financial statements for the year ended June 30, 2011
and related management's discussion and analysis (MD&A) will be
filed with securities regulatory authorities within applicable
timelines and will be available via SEDAR at www.sedar.com. About
Liuyang Fireworks Limited Liuyang Fireworks Limited is a leading
China-based manufacturer of fireworks distributed both domestically
and within more than 15 countries in North America, South America
and Europe. The Company has more than 17 years of experience
in the fireworks industry and is a supplier to the world's top five
fireworks wholesalers and retailers. Liuyang's
ISO9001-certified manufacturing facilities are located in the
Liuyang area of Hunan, China, where more than half of the world's
fireworks are produced. The forward-looking information contained
in this news release represents the expectations of the Company as
of the date of this news release and, accordingly, is subject to
change after such date. Readers should not place undue
importance on forward-looking information and should not rely upon
this information as of any other date. While the Company may
elect to, it does not undertake to update this information at any
particular time except as required in accordance with applicable
securities legislation. Neither TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release. Liuyang Fireworks
Limited CONTACT: Jacky LongChief Financial OfficerLiuyang Fireworks
LimitedTel : 647 350 8818jackylong@farocean.com
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