Liuyang Fireworks Reports Second Quarter Growth in Revenue and Profitability
01 Mars 2012 - 1:00PM
PR Newswire (Canada)
TORONTO, March 1, 2012 /CNW/ - Liuyang Fireworks Limited ("Liuyang"
or "the Company") today announced financial results for its second
quarter and first six months ended December 31, 2011. All amounts
are in Canadian dollars unless otherwise indicated. Highlights for
the second quarter: -- Growth in international and domestic sales
led to a 17.6% increase in revenue during the six month period
ended December 31, 2011 compared with the same period of
2010;Domestic sales and international sales accounted for 37% and
63% of revenue respectively; -- The Company achieved gross profit
of $3.8 million during the six month period to December 31, 2011
which represents the highest level in the Company's history. -- The
Company established two joint ventures in Hunan Province: a
manufacturing joint venture in Liuyang City and a wholesale joint
venture in Youxian City. Both joint ventures are expected to
contribute to the Company's operations during the second half of
fiscal 2012 in the form of increased manufacturing capacity and
expanded distribution; -- The Company has had a successful
marketing program thus far in fiscal 2012 with the completion of
three fireworks displays as well as organizing the 10th annual
China (Liuyang) International Fireworks Festival; -- The Company
won the gold award at the China Liuyang International Pyro-musical
Competition; -- As at December 31, 2011 the Company had cash of
$7.03 million and total bank debt of $6.7 million. "Our strong
second quarter results were driven by growth in both international
and domestic sales channels resulting from the focused execution of
our business plan," said Mr. Hu, Liuyang's president and CEO.
"During the quarter, we achieved higher sales volume in the U.S.
fireworks market in conjunction with our continued efforts to
further penetrate the domestic market in China as well as
benefiting from higher overall selling prices. Importantly, our
efforts translated to a more than tripling of our bottom line for
the quarter." SUMMARY FINANCIAL STATEMENTS 3 months ended Dec. 6
months ended Dec. In thousands except per 31 31 share and % data
2011 2010 2011 2010 Revenue $5,974 $4,986 $9,901 $8,419 Gross
profit $2,284 $1,841 $3,785 $3,306 Gross margins 38.2% 36.9% 38.2%
39.3% EBITDA $511 $222 $757 $806 EBITDA before stock-based $601
$269 $1,057 $900 compensation Net income $280 $91 $372 $578 Net
income Basic $0.005 $0.002 $0.007 $0.014 per share Diluted $0.004
$0.001 $0.005 $0.012 Balance Sheet Highlights Cash $7,026 $2,031
Current ratio 1.66:1 1.46:1 Working capital $7,751 $3,806 Total
assets $21,520 $13,533 Debt to equity ratio 1.21:1 1.39:1 Review of
Second Quarter Results Revenue for the quarter was $5.97 million,
representing an increase of 19.8% or $0.99 million compared to the
same three month period a year earlier. The increase was primarily
attributable to higher U.S. market fireworks sales volume combined
with higher selling prices during the quarter. Gross profit for the
quarter was $2.28 million, representing an increase of 24.1% or
$0.44 million over the comparable period. The increase was driven
by higher sales volume and higher selling prices during the
quarter. Gross margin for the quarter increased to 38.2% of revenue
compared to 36.9% of revenue for the comparable period. EBITDA for
the quarter was $0.51 million, representing an increase of 130.2%
or $0.29 million over the comparable period. EBITDA before
stock-based compensation expense was $0.60 million, representing an
increase of 123.4% or $0.33 million compared to the same three
month period a year earlier. Net income improved to $0.28 million,
or $0.005 per share ($0.004 diluted), compared to $0.09 million, or
$0.002 per share ($0.001 diluted) for the same three month period a
year earlier. At December 31, 2011, the Company had cash of $7.03
million and working capital of $7.75 million. These figures compare
to cash of $2.03 million and working capital of $3.81 million at
December 31, 2010. The Company has sufficient cash and working
capital to continue its growth and expansion plans for the balance
of fiscal 2012. Liuyang's consolidated financial statements for the
three and six months ended December 31, 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. Outlook "As we
continue to carry out our business strategy, we expect our sales to
continue to grow both internationally and domestically in China,"
said Mr. Hu. "Importantly, our two recent joint ventures will
contribute to our results in the second half of the fiscal year.
The manufacturing joint venture we established during the quarter
will increase our production capacity, while the wholesale joint
venture we established in the first quarter will yield additional
distribution." 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. Liuyang Fireworks Limited
CONTACT: Jacky LongChief Financial OfficerLiuyang Fireworks
LimitedTel : 647 350 8818jackylong@farocean.com
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