Trading Symbol: MCV
TORONTO, May 5 /CNW/ - McVicar Industries Inc. ("McVicar" or the
"Company"), formerly McVicar Resources Inc., 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, 2008. The detailed financial
statements and MD&A can be found on www.sedar.com. All amounts are in Canadian
dollars unless otherwise noted.
- Consolidated revenues grew 34 percent to $36.7 million.
- Revenues from chemical business doubled to $18.9 million.
- Cash provided by operating activities grew 11 times to $1.3 million.
- Holding interest in MAM increased to 90.5% from 51%.
Some highlights of the annual and fourth quarter results:
- Consolidated revenues for the fourth quarter 2008 increased to
$7.9 million, or 12%, from $7.0 million for the same period last
year. For the twelve months ended December 30, 2008, revenues
increased to $36.7 million, or 34%, from $27.5 million for the same
period last year. The significant year-over-year increases in sales
are attributable primarily to strong growth in the Company's chemical
- Gross profit for the fourth quarter and for the twelve months ended
December 31, 2008 was $1.2 million and $8.5 million, versus
$1.4 million and $7.2 million for the same period last year,
respectively. Gross profit as a percentage of sales decreased from
20% to 15% in the fourth quarter, and from 26% to 23% for the year,
compared with the same period last year. This decrease was mainly due
to margin shrinking in both technical and chemical products. This was
caused by a number of factors, including higher sales volume, product
mix, overall increase in its raw material prices and labour cost and
higher provision for slow moving or obsolete inventories.
- Excluding one-time items in both years such as impairment of goodwill
and intangible assets, provision for inventories, gain on disposal of
investment (subsidiary) and investment income, operating income
increased in 2008 by 270% to $2.1 million or $0.07 per share,
compared with pro forma $0.6 million or $0.02 per share in the prior
year. The significant year-over-year increases in net income are
mainly attributable to the increase in sales and cost reduction in
technical business. Net loss for the year ended December 31, 2008 was
$ 3.1 million or 0.10 per share, compared to net income of
$ 2.2 million or 0.10 per share for same period of 2007.
- As at December 31, 2008, McVicar had cash on hand of $ 6.8 million
and net working capital of $18 million, compared with $4.9 million
and $10 million in 2007 respectively. The increase in working capital
is primarily due to the significant increase in cash provided by
operating activities and increases in accounts receivable and
inventory and decrease in accounts payable as a result of increase in
- Cash provided by operating activities for the year ended December 31,
2008 was $1.3 million, an increase of $1.2 million or 1132%, compared
to $105,000 for the same period last year. The significant increase
was mainly attributable to increase in sales and tight cost control
measure taken technical business.
- On April 21, 2008, Zhejiang Hongbo Chemical Co. Ltd. ("Hongbo"), a
subsidiary of McVicar, closed an acquisition of an 80% interest in
Luyuan Chemical Co. Ltd. ("Luyuan") in Xiangshui city, China, for a
total cash consideration of 4 million RMB (approximately
CDN $ 0.6 million). Luyuan is a manufacturer and supplier of
specialized chemical products for industrial markets. One of Luyuan's
main products is a key raw material in the intermediate chemicals
that Hongbo manufactures.
- On May 30, 2008, the Company completed a private placement of
2,183,073 common shares for gross proceeds of $3,056,302 at a price
of $ 1.40 per unit. Each unit consisted of one common share of
McVicar and one-half of one common share purchase warrant. Proceeds
from the Offering will be used primarily to fund the acquisition and
working capital needs for chemical business.
- On July 28, 2008, the Company increased its ownership in McVicar
(Hong Kong) Advanced Materials Co. Ltd., ("MAM"), from 51% to 90.5%
by way of purchase of shares held by Shining Palace Holding Co.
Limited ("Shining Palace"). The total consideration was satisfied by
the issue of 5,239,800 units of the Company at an agreed issue price
of $1.40 per unit, each unit consisted of one common share of McVicar
and one-half of one common share purchase warrant.
- On September 27, 2008, the Company registered its China operational
office, McVicar (Hang Zhou) Management Co. Ltd., ("McVicar (HZ)"),
which was wholly owned by MAM, with a total registered capital of
USD $2 million (approximately CDN $ 2.4 million). The main
consideration to set up this operational office in Hangzhou, China is
to centralize the Company's chemical subsidiaries' R&D resources and
sales with the expectation to enhance our competence in China.
- On September 26, 2008, the Company reached an agreement with Ascend
Technologies Ltd. on the sale of our 27% equity interest in Sino Lion
Nanjing Ltd.(" Sino Lion"), based in Nanjing, China. The transaction
is valued at USD$ 850,000 in cash consideration and is expected to
close in the second quarter of 2009.
- On September 15, 2008, JITE consolidated the outstanding common
shares at a ratio of 1 consolidated share for 5 pre-consolidated
shares. The Company's holding interest in JITE remains unchanged
after its share consolidations.
"2008 saw noticeable growth in sales and operating income given current
economic and market conditions," said Gang Chai, McVicar's President and CEO.
"This year, with continuing efforts to expand our business, especially in the
chemical industry through strategic acquisitions, we also focused on improving
operational efficiency to support profitable growth, which is critical for us,
to thrive in this competitive marketplace and to face the challenging economy
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
For further information:
For further information: Please contact Ms. eXavier Peterson at: 55
University Avenue, Suite 605, Toronto, ON, M5J 2H7, Tel: (416) 366-7420, Fax
(416) 366-7421, www.mcvicar.ca