Trading Symbol: MCV
TORONTO, Sept. 2 /CNW/ - McVicar Resources Inc. ("McVicar" or the
"Company") is pleased to announce that it has filed its interim financial
statements and management's discussion and analysis (MD&A) for the second
quarter ended June 30, 2008. The detailed financial statements and MD&A can be
found on www.sedar.com. All amounts are in Canadian dollars unless otherwise
- Quarterly consolidated revenues grew 64 percent year over year to
- Revenues from chemical business grew 300 percent year over year to
- Net income from chemical business grew 140 percent year over year to
Second quarter financial results:
- Consolidated revenues increased to $10.3 million, or 64%, from the
same period last year and 13% from the previous quarter. The
consolidated revenue increase was due primarily to significantly
steady increase from the Chemical business.
- Revenues from the chemical business increased to $5.6 million, from
$1.4 million in the same period last year, an increase of nearly 300%
and from $4.8 million in the previous quarter, an increase of 17%,
marking the sixth consecutive quarter of revenues growth. The
revenues increase was due to both steadily organic growth from Hongbo
and new acquisitions.
- Revenues from technical business were $4.6 million. This was an
increase of 9.5% from $4.2 million in the previous quarter, but a
decline of 6% from the same period last year. The year-over-year
revenue decline was due primarily to a massive slowdown in US
building and real estate markets, and thus reduced demand for its
- Consolidated gross profit margin was 27% and was equivalent to the
same period last year, but declined 2% from 29.0% in the previous
quarter. The slightly lower margin can be attributed to increase of
raw materials and labour cost.
- Operating expenses for the quarter were $1.6 million compared to $1.4
million in the previous quarter and $1.1 million in the same period
last year. Operating expenses as a percentage of sales was 16% and
was equivalent to the previous quarter, but slightly down from 18% in
the same period last year.
- Net income for the quarter was $312,729, or $0.01 per share compared
to net income (before gain on dilution of investment in subsidiary)
$242,852, or $0.01 per share, for the same period last year and
$327,775, or 0.01 per share, in the previous quarter.
- Net income (before non-controlling interest) attributable to chemical
business for the quarter increased to $1 million, or 140%, from $0.4
million for the same period last year.
- Net income (before non-controlling interest) attributable to
technical business for the quarter increased to $71,554, from
$6,654 for the sequential quarter, but declined 82% from $408,849
for the same period last year. The year-over-year decline was due
primarily to sales decline in US market and overall increase in its
raw material prices and labour cost.
Year-to-date financial results
- For the first six months of 2008, total revenues were $19.3 million,
compared with total revenues of $12.4 million in the first six months
- Total operating expenses for the first six months of 2008 were $3.1
million, versus $2.3 million in the comparable period last year as a
result of increases in sales, but operating expenses as a percentage
of sales for the first six moths of 2008 declined to 16% from 18% for
the first six months of 2007 as a result of tight cost control.
- Net income before gain on dilution of investment in subsidiary was
$640,504 for the first six months of 2008, versus $565,703 for the
first six months of 2007.
- Acquisition of an 80% interest in Luyuan Chemical Co. Ltd.
("Luyuan"). On April 21, 2008, Hongbo, closed an acquisition of an
80% interest in Luyuan Chemical Co. Ltd. ("Luyuan"). Luyuan is a
manufacturer and supplier of specialized chemical products for
industrial markets. One of Luyuan's main products is a key raw
material for Hongbo's strategic DuPont project.
- Completion of a private placement. 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 on May 30, 2008. Proceeds from the
Offering will be used primarily to fund the acquisition and working
capital needs for chemical business.
- Production expansion. At the end of June, 2008, Changlong completed
the construction of a 20,000 tonnes per annum expansion facility on
its current location for its chemical products, NEP (N-Ethyl-2-
pyrrolidone) and NMP (N-methyl-pyrrolidone). This expansion will add
20% more capacity to the production.
- Product innovation and development. In April 2008, Hongbo signed a
letter of confidentiality with an Australian company to develop new
pesticide products for agricultural use applying insect pheromone
synthesis technology. The new products have the advantages of being
highly efficient, non-toxic and have no environmental pollutants as
compared to traditional chemical pesticides.
"We are very proud to report six consecutive quarters of revenue and
operating earnings growth," said Gang Chai, President & CEO of McVicar. "Our
chemical business delivered a nearly 300 percent growth in sales revenues and
140 percent growth in net income. This excellent result was generated during a
difficult global economic environment. We are confident that the Company will
achieve excellent results this year with a firm backlog of orders and
contribution from new acquisitions."
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.
For further information:
For further information: Mr. Kevin Zhang, CFO at: 55 University Avenue,
Suite 605, Toronto, ON, M5J 2H7, Tel: (416) 366-7420, Fax (416) 366-7421,