TORONTO,
March 4, 2013 /CNW/ - Liuyang
Fireworks Limited (TSX-V: FWK) ("Liuyang" or "the Company")
today announced financial results for its second quarter and first
six months ended December 31, 2012.
All amounts are in Canadian dollars unless otherwise indicated.
Highlights for the second quarter:
- Revenues for the Second quarter ended December 31, 2012 were $5.57 million of which 46% represented domestic
Chinese sales. This percentage of domestic sales are the
highest achieved by the company during the Q2 period and represent
the Company's strengthening position in the domestic
marketplace.
- Higher domestic sales coupled with improved international
product mix resulted in record gross margins for the company of
43.4% during the quarter.
- The Company achieved net income of $230,000 during the second quarter, or
$0.004 per share ($0.003 diluted).
- The company had a cash position of $2.8
million and total bank debt of $6.7
million as at December 31,
2012.
"We continued to strengthen our profitability
despite softer international sales for the quarter," said Mr. Hu,
Liuyang's president and CEO. "The decrease in our
international sales was partially offset by stronger domestic
market sales, highlighting the success of our ongoing penetration
into the Chinese market. Our strategy to focus on higher
margin products within our line of firework resulted in higher
gross profit during the quarter. Additionally, lower general
and administrative expenses contributed to our strong bottom
line."
SUMMARY FINANCIAL STATEMENTS
|
|
|
|
|
|
In thousands except per share and % data |
3 months ended Dec. 31 |
6 months ended Dec. 31 |
2012 |
2011 |
2012 |
2011 |
Revenue |
$5,565 |
$5,974 |
$9,634 |
$9,901 |
Gross profit |
$2,413 |
$2,284 |
$3,801 |
$3,785 |
Gross margins |
43.4% |
38.2% |
39.5% |
38.2% |
EBITDA |
$406 |
$511 |
$833 |
$757 |
EBITDA before stock-based
compensation |
$413 |
$601 |
$858 |
$1,057 |
Net income |
$230 |
$280 |
$388 |
$372 |
Net income per share |
Basic |
$0.004 |
$0.005 |
$0.007 |
$0.007 |
|
Diluted |
$0.003 |
$0.004 |
$0.006 |
$0.005 |
|
|
|
|
|
|
Balance Sheet Highlights |
|
|
|
|
Cash |
$2,855 |
$7,026 |
|
|
Current ratio |
1.64:1 |
1.66:1 |
|
|
Working capital |
$7,575 |
$7,751 |
|
|
Total assets |
$22,940 |
$21,520 |
|
|
Debt to
equity ratio |
1.06:1 |
1.21:1 |
|
|
Review of Second Quarter Results
Revenue for the quarter was $5.57 million, representing a decrease of 5.2% or
$0.41 million compared to the second
quarter a year ago. The decrease was mainly attributable to a
$0.82 million decrease in U.S.
revenue, which was partially offset by a $0.42 million improvement in domestic
revenue.
Gross profit for the quarter was $2.41 million, representing a 5.7% increase
compared to the same quarter a year ago. Gross margin as a
percentage of sales increased to 43.4% compared to 38.2% in the
second quarter of last year. The increase in gross profit was
attributable to higher volume from the domestic China market and improved product mix as
higher margin products were sold to the US market.
EBITDA for the quarter was $406,000, a decrease of $105,000, or 20.5%, compared with the second
quarter of fiscal 2012. The decrease in EBITDA is mainly due
to lower net income and interest expense recognized in the second
quarter of fiscal 2013. EBITDA before stock-based
compensation expense decreased by $188,000, or 31.3% for the quarter, compared with
the same quarter the year before. Net income decreased to
$230,000, or $0.004 per share ($0.003 diluted), compared to $280,000, or $0.005
per share ($0.004 diluted) for the
second quarter a year earlier.
At December 31,
2012, the Company had cash of $2.85
million and working capital of $7.63
million. These figures compare to cash of $7.03 million and working capital of $7.75 million at December
31, 2011. The Company anticipates having sufficient cash and
working capital to continue its growth and expansion plans for the
balance of fiscal 2013.
Liuyang's consolidated financial statements for
the three and six months ended December 31,
2012 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.
Forward-Looking Statements
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.
SOURCE Liuyang Fireworks Limited