Post by
TheRock07 on Apr 19, 2010 8:56am
Solid Financials/ Record Cash flows
MCVICAR ANNOUNCES FOURTH QUARTER AND FISCAL YEAR-END 2009 FINANCIAL RESULTS
McVicar Industries Inc. has released its financial results and management's discussion and analysis for the fourth quarter and the year ended Dec. 31, 2009. The detailed financial statements and management's discussion and analysis can be found the SEDAR website.
Adjusted net income grew 1.8 times year over year to $2.1-million or six cents per share.
Revenues from the chemical business grew 3 per cent year over year to $19.4-million.
Cash generated by operating activities grew 3.7 times year over year to $6-million.
Financial highlights for the year ended Dec. 31, 2009:
Sales were $35-million, a decrease of 4.8 per cent compared with $36.7-million in 2008.
Gross profit was $10.6-million, an increase of 24 per cent compared with $8.5-million in 2008. Gross profit, as a percentage of sales increased to 30 per cent in 2009 from 23 per cent in 2008. The significant increase in gross margin is attributable to a number of factors, including low raw-material purchase price secured by future purchase contracts, less provision for obsolete inventories and the positive impact due to a benefit of $520,000 from the sale of inventory written down in 2008.
Operating income was $1.6-million compared with an operating loss of $1.7-million in 2008.
Net income was 490,000 or one cent per share compared with a net loss $3.1-million or 10 cents per share in 2008.
Excluding one-time items of investment income (loss), gain (loss) on disposal of equity investment, impairment of goodwill and write-off of intangible assets, adjusted net income for 2009 was $2.1-million or six cents per share, an increase of 180 per cent compared with $740,000 or two cents per share for 2008. The significant year-over-year increase is primarily attributable to higher gross margin and lower operating expenses as a result of strategic cost reduction plans.
Cash provided by operating activities for 2009 was $5.96-million, an increase of $4.7-million or 370 per cent, compared with $1.27-million for 2008.
Financial highlights for the fourth quarter ended Dec. 31, 2009:
Sales were $8.4-million, an increase of 6.7 per cent compared with $7.9-million in the quarter from a year ago.
Gross profit was $2.5-million, an increase of 112 per cent compared with $1.2-million in the quarter from a year ago.
Operating loss was $1.4-million, a decrease of 70 per cent compared with $4.6-million in the quarter from a year ago.
Net loss was $1.7-million or five cents per share, a decrease of 61 per cent compared with $4.5-million or 13 cents in the quarter from a year ago.
Business developments:
Jite (Kunshan) plant: On Oct. 9, 2009, Jite incorporated the wholly owned subsidiary of Jite Industrial (Kunshan) Co. Ltd. (Jite Kunshan) with registered capital of $20-million (U.S.). Jite Kunshan is located northwest of Shanghai, at the economic and technological development zone in Jiangsu province, China.
Pending the moving of the Chanlong plant in May, 2009, Changlong reached agreements regarding relocation of its operating plant, since the Chinese government will expropriate its current rented land. The total government compensation fund in the amount of 8.5 million renminbi ($1.3-million) will be adequate to cover all of its moving costs. It is expected that the production capacity will increase by 50 per cent on the new plant upon the completion of relocation by the end of 2010.
In July, 2009, Luyuan suspended operations due to the combined results of its operating loss and lawsuits against Luyuan. The resumption of operations will depend in part on how well and when these liabilities are settled.
On Jan. 7, 2009, McVicar (Hong Kong) Advanced Materials Co. reached an agreement with Sanlong Holdings Co. Ltd. to exchange Sanlong's 9.5-per-cent equity interest in McVicar Advanced Materials Co. for a 38-per-cent equity interest in Changlong. In connection with this transaction, McVicar Advanced Materials further reached an agreement with Sanlong to purchase the 38-per-cent equity interest in Changlong for cash consolidation of 9,405,000 renminbi ($1,441,787) on Dec. 30, 2009. Upon closing the transaction, McVicar will have a 100-per-cent interest in McVicar Advanced Materials, and in turn, McVicar Advanced Materials will have a 100-per-cent interest in Changlong.
"In 2009, McVicar achieved impressive performances by implementing a series of strategic initiatives despite the challenging economic weakness," said Gang Chai, McVicar's president and chief executive officer. "These initiatives, which we believe will ultimately strengthen our competitive position, mainly focused on cost reductions, deepening our relationships with key customers and streamlining our operations to improve efficiency. In 2010, we will continue to focus on maintaining profitable businesses and maximizing our cash flow."
We seek Safe Harbor.