LIUYANG FIREWORKS RELEASES 2010 FINANCIAL RESULTS - EARNINGS GROWTH 40%YEAR-OVER-YEAR
02 Mayo 2011 - 6:00AM
PR Newswire (Canada)
TORONTO, May 2 /CNW/ -- TORONTO, May 2 /CNW/ - Liuyang Fireworks
Limited (TSX-V: FWK), a leading China-based manufacturer of
consumer fireworks, released its three- and twelve-month results
today. The results, ending December 31, 2010, are in Canadian
dollars unless otherwise stated. Selected 2010 Financial Highlights
_______________________________________________________________ |In
thousands except share and % data|FY 2010|FY 2009|Change (%)|
|____________________________________|_______|_______|__________|
|Revenue |$14,081|$13,408|5% |
|____________________________________|_______|_______|__________|
|Gross margins |37.6% |41.3% |-9% |
|____________________________________|_______|_______|__________|
|EBITDA |$1,293 |$1,590 |-19% |
|____________________________________|_______|_______|__________|
|Net Income |$894 |$637 |40% |
|____________________________________|_______|_______|__________|
|Earnings per share (Basic) |$0.021 |$0.016 |31% |
|____________________________________|_______|_______|__________|
|Cash and Cash equivalents |$2,031 |$1,999 |2% |
|____________________________________|_______|_______|__________|
|Working capital |$3,806 |$4,507 |-16% |
|____________________________________|_______|_______|__________|
Liuyang Fireworks Limited 2010 Operating Highlights: -- Launched
fireworks display company in March 2010; -- Established two
wholesale JVs in Zhejiang Province to enter the fireworks wholesale
market; -- Received Canadian Explosives Regulatory Division (CERD)
approval for additional three products (15 in total as of December
2010) to distribute within Canada; -- Received a confirmed order
from one US wholesaler for US$1.4 million to deliver in 2011. "We
are very pleased with our company's achievements and our ability to
present positive earnings growth to our shareholders." said Miao
Hu, President and Chief Executive Officer, Liuyang Fireworks. "We
continue to capitalize on the domestic market through new product
offerings and acquisitions. Although we have faced the negative
impact of strong Canadian dollars, our revenues continue to
increase steadily in 2010." Highlights subsequent to the year-end:
-- 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 first two months of 2011. Review of Fourth
Quarter and Fiscal Year 2010 Financial Results Selected Fourth
Quarter Financial Highlights
_______________________________________________________________ |In
thousands except share and % data|Q4 2010|Q4 2009|Change (%)|
|____________________________________|_______|_______|__________|
|Revenue |$4,986 |$4,709 |6% |
|____________________________________|_______|_______|__________|
|Gross margins |37% |35% |6% |
|____________________________________|_______|_______|__________|
|EBITDA |$226 |($71) |--- |
|____________________________________|_______|_______|__________|
|Net Income |$83 |($338) |--- |
|____________________________________|_______|_______|__________|
|Earnings per share (Basic) |$0.002 |($0.01)|--- |
|____________________________________|_______|_______|__________|
Revenue Revenue for the fourth quarter was $4.99 million, compared
with $4.71 million for the same period last year, representing an
increase of 6%. The increase was due to a slight increase in
Chinese domestic sales over the same period in 2009. Revenue for
2010 was $14.1 million, an increase of $0.67 million or 5% over the
$13.4 million generated in 2009. Liuyang Fireworks Limited receives
most of its international orders in U.S. dollars. Conversely, the
company incurs most of its expenses in Chinese RMB. Strong Canadian
dollar appreciation during 2010 has significantly reduced the
reported revenues. If 2010 revenue was converted at the prior
year's average exchange rate, revenue for 2010 would have been
$15.6 million, a 16% increase over 2009 results. Gross Profit Gross
profit for the fourth quarter was $1.84 million compared with $1.67
million for the same period last year, an increase of 11%. As a
percentage of revenue, gross profit margin for the fourth quarter
was 37% compared to 35% for the fourth quarter of 2009. The
increase was due to higher margin products sold during this period.
The gross profit for 2010 was $5.29 million, compared with $5.55
million for 2009. The decrease was due to higher raw material cost
incurred over the year. Management believes that the company will
continue to control these production costs by establishing an
alliance with the subcontractors used for raw materials purchasing.
Liuyang Fireworks Limited also plans to improve upon the historical
levels of gross margin by optimizing product mix and improving
production efficiency. EBITDA EBITDA for the fourth quarter
increased to $0.23 million from a negative $0.07 million for the
same period in 2009. The improvement in EBITDA for the fourth
quarter of 2010 was mainly attributed to low non-cash stock-based
compensation costs and higher revenue in 2010. EBITDA for 2010 was
$1.3 million, while in 2009 it was $1.59 million. The change was
due to the significant decrease of amortization expense and
interest expense, which were offset by the increase of net income
in 2010. Net Income Net income for the fourth quarter increased to
$0.08 million from a negative $0.34 million for the same period
last year. Luiyang Fireworks Limited's net income for 2010 was 0.9
million, a 40% increase over the $0.64 million earned in 2009. This
net income growth was due to slightly higher revenue and cost
savings from operation expenses. After successful integration of
two wholesaler joint venture companies, Liuyang Fireworks Limited
enters into the domestic Chinese market for the second year. It is
believed that the company will continue its success and is expected
to generate higher net income in the future. Cash and Cash
Equivalents As of December 31, 2010, the company has cash and cash
equivalents totaling $2.03 million, representing an increase of
$0.03 million, or 2% compared with the balance as of December 31,
2009. The Company also had $0.1 million of restricted cash. Outlook
"We are very pleased with our progress and will continue the
two-pronged strategy designed to accelerate our long-term growth.
Internationally, we continue to see strong demand for our safe,
high quality consumer fireworks." said Mr.Hu. "Domestically, we
have successfully integrated our two recently acquired wholesale
companies into our operation over the past year. As a result, our
revenues from international markets and domestic markets are 70%
and 30% respectively. We expect a dramatic increase in domestic
sales for Q1, 2011 as we continue to expand our domestic sales
network. We are also in the process of evaluating a third
acquisition candidate. Our display company has begun establishing
some key client relations and we are very confident that we can
fulfill our goal of 30 displays over 2011." About Liuyang Fireworks
Limited Liuyang Fireworks Limited is a leading China-based
manufacturer of consumer fireworks distributed domestically and in
more than 15 countries in North America, South America and Europe.
The company has more than 16 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/May2011/02/c8372.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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