Trading Symbol: MCV
TORONTO, May 3 /CNW/ - McVicar Industries Inc. ("McVicar" or the
"Company") today is pleased to announce its financial results and
management's discussion and analysis (MD&A) for the fourth quarter and
the year ended December 31, 2010. The detailed financial statements and
MD&A can be found on www.sedar.com. All amounts are in Canadian dollars unless otherwise noted.
Financial Highlights for the Year Ended December 31, 2010:
Sales were $33.5 million, down 4% compared to $35 million in 2009, due
to the suspension of operations of Changlong.
Gross profit was $9.7 million, 8% lower than $10.6 million in 2009.
Operating income was $3.03 million, an increase of 93% from the $1.57
million in 2009.
Net income was $1.95 million or $0.05 per share compared to $0.49
million or $0.01 per share in 2009. This increase is due to less write
down of goodwill and intangible in 2010.
Financial Highlights for the Fourth Quarter Ended December 31, 2010:
Sales were $7.9 million, a decrease of 6% compared to $8.4 million in
the year-ago quarter.
Gross profit was $1.77 million, a decrease of 30% compared to $2.5
million in the year-ago quarter.
Operating loss was $0.9 million, compared to $1.42 million in the
Net loss was $0.11 million, a loss of $0.00 per share, compared to a
loss of $1.74 million or $0.05 per share in the year-ago quarter.
Increase of interest in Jite: During 2010 the Company bought 1,036,000
shares on the open-market of Jite, through several independent
step-purchases for total cash consideration of $430,148. In 2010 Jite
conducted a normal course issuer bid to buy back 435,000 of its own
shares for cash consideration of $199,662 that were subsequently
cancelled by Jite. The result of these transactions was an increase in
the Company's interest in Jite from 48.6% to 54.7% as of December 31,
2010. Subsequent to December 31, 2010, Jite has further cancelled
565,000 of its shares bought back and as of the date of this MD&A the
Company's interest in Jite has increased to 56.2%,
Jite (Kunshan) plant: On October 9, 2009, Jite incorporated another
wholly-owned subsidiary of Jite Industrial (Kunshan) Co., Ltd. at
Kunshan Economic and Technological Development Zone, in Jiangsu
Province, China. The Company is developing an optimal strategic
expansion plan for the Kunshan plant. The expectation is that the
resulting expansion plan will not only stabilize the existing business
operation and minimize capital expenditure in the short term, but will
also fit the Company's business growth strategy in the long term. In
December 2010 the Company established an assembling facility in the
Kunshan plant for trial production of the products currently sold to
customers. Management will review the results of the trial productions
and the costs of productions to formalize future expansion plan.
Pending relocation of the Changlong plant: In 2010 Changlong was
required by the local government to cease production activities and
prepare for relocation. However, as of today the relocation of
Changlong is still pending. For more details please refer to note 10 of
the 2010 consolidated financial statements of the Company.
Reformation of parts manufacturing in Jite: During 2010, the Company
executed a plan for reforming the manufacturing structure and spinning
off certain parts manufacturing to employee ownership. For details,
please refer to note 20 to the 2010 consolidated financial statements
of the Company. Management of the Company is pleased that the
objectives of the reforming, i.e., improving production effectiveness
and efficiency, reduce of labour force and capital required, are being
Resume operations in Luyuan: In the last quarter of 2010, the Company
settled the legal disputes in Luyuan, as described in the note 15(b) to
the 2010 consolidated financial statements. Luyuan is in the process of
Acquisition of interest in MAM and divestiture of interest in Changlong:
In December 2010, the Company finalized an arm's length equity sale and
exchange agreement with Sanlong Holdings Co., Ltd. ("Sanlong"), the
minority interest shareholder in MAM. The Company and Sanlong agreed to
exchange Sanlong's 9.5% of MAM for 38% of Changlong, and then
subsequently the Company purchased 30% interest of Changlong from
Sanlong for cash consideration of $995,940 (RMB6,600,000). After the
transactions the Company owns 100% of MAM and 92% of Changlong. The
transactions resulted in a gain of $118,315 recorded in the
consolidated statements of operations.
This press release contains forward-looking statements which reflect the
Corporation's current expectations regarding future events. The
forward-looking statements involve risks and uncertainties. Actual
results could differ materially from those projected herein. Although
we believe that our expectations are based on reasonable assumptions,
we can give no assurance that our expectations will materialize. The
TSX Venture Exchange Inc. has not reviewed and does not accept
responsibility for the adequacy or accuracy of this release.
SOURCE McVicar Industries Inc.
For further information:
Ms. eXavier Peterson or Winfield Yongbiao Ding, CFO at: 55 University Avenue, Suite 605, Toronto, ON M5J 2H7 Tel: (416)366-7420 Fax (416)366-7421 www.mcvicar.ca