TORONTO, Oct. 30, 2012 /CNW/ - Liuyang Fireworks Limited (TSX-V: FWK) ("Liuyang" or "the Company") today reported its financial results for the three- and 12-month periods ended June 30, 2012. All amounts are in Canadian dollars unless otherwise indicated.
Commencing with fiscal 2011, Liuyang changed its fiscal year end to June 30 to better align the Company's financial reporting and business cycles with customers and suppliers. As a result of the change in year end, the Company's financial statements only include the six-month period ending June 30, 2011. For purposes of this press release and our MD&A we have provided comparisons between the twelve month periods ending June 30, 2012 and June 30, 2011.
Highlights during and subsequent to fiscal 2012:
- The Company achieved a record of $19.8 million sales revenue for the year ended June 30, 2012. This represents growth of 26.1% compared to the twelve months ended June 30, 2011. Growth was achieved in both domestic and international sales which accounted for 40% and 60% of revenue respectively;
- The Company achieved gross profit of $7.4 million during the twelve months period ended Jun 30, 2012 representing a 23% improvement over the previous 12 month period and the highest level in the Company's history;
- The Company continued to grow its domestic business with the establishment of two new joint ventures in Hunan Province. These new joint ventures are expected to significantly contribute to both the manufacturing and wholesale part of the business in China over the next year;
- The Company's Wanjia wholesale business contributed $2 million gross profit and doubled Wanjia's gross margin to a record of 47% compared to last year by effectively improving sales price during the 2012 spring festival sales season;
- As at June 30, 2012, the Company had cash of $1.9 million and total bank debt of $3.2 million;
- Subsequent to the year end June 30, 2012，Liuyang Fireworks continued to improve its reputation and visibility in the domestic Chinese industry. In addition to winning a gold medal at the 13th annual Shanghai International Music Fireworks Festival, the Company's "dragon egg" brand was also recognized as International Well-Known Brand of Hunan Province.
"We achieved record revenue and gross profit in fiscal 2012," said Mr. Hu, Liuyang's president and CEO. "This growth was the result of our success in further penetrating the Chinese domestic market while continuing to grow our international export business. We remain focused on higher selling prices thru our newly established joint ventures."
Income Statement Highlights
| In thousands except per share and
|EBITDA before stock-based compensation||$1,891||$1,517||24.7%|
|Net income per share||Basic||$(0.004)||$0.019||（36.8%）|
Balance Sheet Highlights
|In thousands except ratio data||As at June 30|
|Debt to equity ratio||0.67:1||1.23:1|
Review of Fiscal 2012 Results
Revenue for fiscal 2012 was $19.81 million, representing an increase of $5.0 million or 26.1% over the comparable twelve months ended June 30, 2011. The increase was attributable to expanded production capacity at certain facilities and production improvements. The Company earned 60% of its revenues during fiscal 2012 from international markets with domestic markets representing 40%.
Gross profit was $7.34 million, representing an increase of $1.38 million or 23.0% when compared to the same twelve month period the year before. The increase was a result of both higher sales volume and higher revenue achieved as the Company increased its focus on the Chinese domestic market. Gross margin as a percentage of sales for fiscal 2012 was 37.2% compared with 38.2% for the same twelve month period the year before.
EBITDA was $1.5 million, representing an increase of 15.8% over the twelve months ended June 30, 2011. EBITDA before stock-based compensation expense was $1.9 million, representing an increase of 24.7% compared to the same twelve months the year before. For the fiscal year, the Company had net income of approximately $0.7 million, or $0.012 per share ($0.010 diluted).
The Company continues to have a strong balance sheet, with improved debt to equity levels and sufficient working capital to continue its growth and expansion plans for fiscal 2013.
Liuyang's consolidated financial statements for the year ended June 30, 2012 and related management's discussion and analysis (MD&A) will be filed with securities regulatory authorities within applicable timelines and will be available via SEDAR at www.sedar.com.
"We expect to build on our success thus far in strengthening our brand recognition in the Chinese domestic market," said Mr, Hu. "Moreover, we have been pleased with the early performance of our manufacturing joint venture in Liuyang City and our wholesale joint venture in Youxian City. We expect that these joint ventures will contribute combined annualized sales of approximately $5 million per year on a go forward basis as we capitalize on the higher production capacity and additional distribution."
About Liuyang Fireworks Limited
Liuyang Fireworks Limited is a leading China-based manufacturer of fireworks distributed both domestically and within more than 15 countries in North America, South America and Europe. The Company has more than 17 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.
SOURCE: Liuyang Fireworks Limited
For further information:
Chief Financial Officer
Liuyang Fireworks Limited
Tel : 647 350 8818