Liuyang Fireworks Reports Record First Quarter Net Income Increased 273% Over Last Year
30 Junho 2011 - 8:00AM
PR Newswire (Canada)
TORONTO, June 30, 2011 /CNW/ -- TORONTO, June 30, 2011 /CNW/ -
Liuyang Fireworks Limited (TSX-V: FWK) ("Liuyang" or "the Company")
released its financial results for the three-month period ending
March 31, 2011. All amounts are in Canadian dollars unless
otherwise stated. Selected Q1 2011 Financial Highlights
_____________________________________________________________________
|In thousands except share and % data|FY 2011 Q1|FY 2010 Q1|Change
(%)|
|____________________________________|__________|__________|__________|
|Revenue |$4,113 |$2,646 |55% |
|____________________________________|__________|__________|__________|
|Gross margins |35.4% |35.4% |0% |
|____________________________________|__________|__________|__________|
|EBITDA |$665 |$195 |242% |
|____________________________________|__________|__________|__________|
|Net Income |$489 |$131 |273% |
|____________________________________|__________|__________|__________|
|Earnings per share |$0.009 |$0.003 |200% |
|____________________________________|__________|__________|__________|
|Cash and Cash equivalents |$4,425 |$2,031 |118% |
|____________________________________|__________|__________|__________|
|Working capital |$7,167 |$3,806 |88% |
|____________________________________|__________|__________|__________|
Miao Hu, President and Chief Executive Officer, Liuyang Fireworks
Limited states, "We are very pleased that both our revenue and
earnings have grown dramatically during the quarter. The results
are largely attributed to the successful implementation of our
two-pronged strategy. Domestically, we have acquired two
wholesalers that have contributed significantly to our sales
revenue during the Chinese New Year season. Our sales from the
domestic market accounted for 56% of total sales for the first
quarter of 2011. The increase in sales from the domestic market
over the first quarter has diminished the seasonal trend that the
Company has operated under in the past. Earnings growth has
surpassed revenue, as we continue to manage our expense and bring
more value to our shareholders." Other Highlights for First Quarter
2011: -- Completed a non-brokered private placement of 12,033,700
shares for gross proceeds of $2.17 million -- Announced record
sales of $3.6 million for the 2011 Chinese New Year selling season
-- Hunan Liuyang Fireworks Display Art Company (100% owned
subsidiary of the Company) successfully presented fireworks
displays at eight different events during the first two months of
2011 Review of First Quarter 2011 Financial Results Revenue for the
first quarter of 2011 reached $4.11 million, a 55% increase over
the same period last year. This significant increase was credited
mainly to rapid sales growth in the domestic market. During the
2011 Chinese New Year sales season, the Hangzhou Wanjia wholesaler
(acquired in the second quarter last year) alone contributed $1.3
million new revenue to the company. Gross profit for the first
quarter was $1.46 million, an increase of 56% from $0.94 million
over the same period in 2010. As a percentage of revenue, gross
profit margin for the first quarter was 35.4%, consistent with the
same period last year. The Company expects to improve gross margin
by optimizing product mix and controlling production costs by
aligning with all of its subcontractors for raw materials
purchases. EBITDA for the first quarter of 2011 was $0.67 million,
an increase of 242% over the same period last year. EBITDA as a
percentage of revenue for the first quarter of 2011 was 16.2%,
compared with 7.4% from the same period last year. The improvement
in EBITDA for the first quarter of 2011 was linked to a higher
sales volume of fireworks and a slightly higher sale price.
Additionally, due to the earlier timing of Chinese New Year for
2011, lower transportation costs were recorded for the first
quarter. Net income for the first quarter was $0.49 million, an
increase of 273% from the same period in 2010. Net income as a
percentage of revenue (net profit margin) for the first quarter of
2011 was 12%, compared with 5% for the first quarter of 2010. The
significant improvement of net income for the first quarter of 2011
was primarily due to higher sales revenue and lower operating
expenses. The Company has entered into the domestic Chinese market
for the second year with full integration of two wholesale joint
venture companies and is poised to generate higher net income into
the future. At March 31, 2011, the Company had a working capital of
$7.17 million and cash and cash equivalents totaling $4.43 million.
These figures compare to $3.81 million and $2.03 million
respectively, as of December 31, 2010. Outlook President and Chief
Executive Officer of Liuyang Fireworks Limited, Miao Hu reports,
"We have seen great success in implementing our long-term strategy
to create more value for our company and shareholders.
Internationally, we continue to see strong sales growth from both
existing and new customers, especially in the European market. It
is due to these factors, coupled with recent financing, that we
have the capability to pursue more aggressive marketing strategies
and acquisition opportunities within the domestic market. We
believe that the Company will continue to experience sales growth
in both markets over the remainder of 2011." Subsequent to this
quarter, Liuyang adjusted the Company's fiscal year end from the
current fiscal year end of December 31 to June 30, to better align
with Company's financial reporting, tax planning, and business
cycles of both customers and suppliers. Liuyang's consolidated
financial statements for the quarter ended March 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. 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. To view this news release in HTML formatting,
please use the following URL:
http://www.newswire.ca/en/releases/archive/June2011/30/c2416.html p
Jacky Longbr/ Chief Financial Officerbr/ Liuyang Fireworks
Limitedbr/ Tel : 416-613-0208 ext 206br/ a
href="mailto:jackylong@farocean.com"jackylong@farocean.com/a /p
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