TORONTO,
Oct. 30, 2012 /CNW/ - Liuyang
Fireworks Limited (TSX-V: FWK) ("Liuyang" or "the Company")
today reported its financial results for the three- and 12-month
periods ended June 30, 2012. All
amounts are in Canadian dollars unless otherwise indicated.
Commencing with fiscal 2011, Liuyang changed its fiscal year end
to June 30 to better align the
Company's financial reporting and business cycles with customers
and suppliers. As a result of the change in year end, the Company's
financial statements only include the six-month period ending
June 30, 2011. For purposes of this
press release and our MD&A we have provided comparisons between
the twelve month periods ending June 30,
2012 and June 30, 2011.
Highlights during and subsequent to fiscal 2012:
- The Company achieved a record of $19.8
million sales revenue for the year ended June 30, 2012. This represents growth of
26.1% compared to the twelve months ended June 30, 2011. Growth was achieved in both
domestic and international sales which accounted for 40% and 60% of
revenue respectively;
- The Company achieved gross profit of $7.4 million during the twelve months period
ended Jun 30, 2012 representing a 23%
improvement over the previous 12 month period and the highest level
in the Company's history;
- The Company continued to grow its domestic business with the
establishment of two new joint ventures in Hunan Province. These new joint ventures
are expected to significantly contribute to both the manufacturing
and wholesale part of the business in China over the next year;
- The Company's Wanjia wholesale business contributed
$2 million gross profit and doubled
Wanjia's gross margin to a record of 47% compared to last year by
effectively improving sales price during the 2012 spring festival
sales season;
- As at June 30, 2012, the Company
had cash of $1.9 million and total
bank debt of $3.2 million;
- Subsequent to the year end June
30, 2012,Liuyang Fireworks continued to improve its
reputation and visibility in the domestic Chinese industry.
In addition to winning a gold medal at the 13th annual
Shanghai International Music Fireworks Festival, the Company's
"dragon egg" brand was also recognized as International Well-Known
Brand of Hunan Province.
"We achieved record revenue and gross profit in
fiscal 2012," said Mr. Hu, Liuyang's president and CEO. "This
growth was the result of our success in further penetrating the
Chinese domestic market while continuing to grow our international
export business. We remain focused on higher selling prices thru
our newly established joint ventures."
Income Statement Highlights
|
|
|
|
|
In thousands except per share and
% data |
12
months
ended
June 30 |
12
months
ended
June 30 |
Change
(%) |
2012 |
2011 |
|
Revenue |
$19,805 |
$15,707 |
26.1% |
Gross profit |
$7,374 |
$5,994 |
23.0% |
Gross margins |
37.2% |
38.2% |
(1%) |
EBITDA |
$1,537 |
$1,328 |
15.7% |
EBITDA before stock-based
compensation |
$1,891 |
$1,517 |
24.7% |
Net income |
$655 |
$886 |
(26.1%) |
Net income per share |
Basic |
$(0.004) |
$0.019 |
(36.8%) |
|
Diluted |
$(0.003) |
$0.017 |
(41.2%) |
|
|
|
|
|
Balance Sheet Highlights
|
|
|
In thousands
except ratio data |
As at June 30 |
2012 |
2011 |
Cash |
$1,910 |
$5,829 |
Current ratio |
2.08:1 |
1.63:1 |
Working capital |
$7,727 |
$6,406 |
Total assets |
$17,852 |
$18,413 |
Debt to equity
ratio |
0.67:1 |
1.23:1 |
|
|
|
Review of Fiscal 2012 Results
Revenue for fiscal 2012 was $19.81 million, representing an increase of
$5.0 million or 26.1% over the
comparable twelve months ended June 30,
2011. The increase was attributable to expanded production
capacity at certain facilities and production improvements. The
Company earned 60% of its revenues during fiscal 2012 from
international markets with domestic markets representing 40%.
Gross profit was $7.34
million, representing an increase of $1.38 million or 23.0% when compared to the same
twelve month period the year before. The increase was a result of
both higher sales volume and higher revenue achieved as the Company
increased its focus on the Chinese domestic market. Gross margin as
a percentage of sales for fiscal 2012 was 37.2% compared with 38.2%
for the same twelve month period the year before.
EBITDA was $1.5
million, representing an increase of 15.8% over the twelve
months ended June 30, 2011. EBITDA
before stock-based compensation expense was $1.9 million, representing an increase of 24.7%
compared to the same twelve months the year before. For the fiscal
year, the Company had net income of approximately $0.7 million, or $0.012 per share ($0.010 diluted).
The Company continues to have a strong balance
sheet, with improved debt to equity levels and sufficient working
capital to continue its growth and expansion plans for fiscal
2013.
Liuyang's consolidated financial statements for
the year ended June 30, 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.
Outlook
"We expect to build on our success thus far in
strengthening our brand recognition in the Chinese domestic
market," said Mr, Hu. "Moreover, we have been pleased with the
early performance of our manufacturing joint venture in Liuyang
City and our wholesale joint venture in Youxian City. We expect
that these joint ventures will contribute combined annualized sales
of approximately $5 million per year
on a go forward basis as we capitalize on the higher production
capacity and 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.
SOURCE Liuyang Fireworks Limited