Trading Symbol: MCV
TORONTO, June 2 /CNW/ - McVicar Resources Inc. ("McVicar" or the
"Company") is pleased to report its financial results for the first quarter
ended March 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.
Highlights of the first quarter results:
- Revenue for the first quarter of 2008 was $9.1 million, an increase
of $2.9 million or 47%, compared to the same quarter in 2007. This
significant increase was purely due to impressive sales growth in the
chemical business. Revenue generated from chemical operations was
$4.8 million in the first quarter of 2008, an increase from $1.6
million in the same period of 2007. The dramatic increase from the
chemical business was due to significant contract awards for Hongbo
Chemical Co. Ltd. ("Hongbo") and the new acquisition of Changlong
Chemical Co. Ltd. ("Changlong"). Revenue contribution from the
electronics business was $4.2 million for the quarter, slightly down
from $4.6 million for the same period of 2007.
- Gross profit in the first quarter of 2008 was $2.4 million, an
increase of $0.5 million compared to $1.9 million in the first
quarter of 2007 as a result of increased sales. Gross margin as a
percentage of sales in the first quarter of 2008 was 27%, compared to
31% in the first quarter of 2007, as a result of decreased profit
margin in the electronics business. A massive slowdown in US building
and real estate markets thus reduced demand for the security products
for JITE's customers.
- Operating expenses for the first quarter of 2008 were $1.4 million,
an increase of $0.2 million or 19% of the total revenue in comparison
to $1.2 million in the same period of 2007 as a result of the
significant increase in sales volume. Operating expenses as a
percentage of sales was reduced to 16% of the total revenue in this
quarter from 19% in the period of 2007, a decrease of 3% mainly due
to significant increase in sales and tight control on operational
- Net income for the first quarter of 2008 amounted to $327,775
compared to $322,751 for the same period of 2007. Net profit
contribution was primarily from the chemical business, as the net
income in the electronic business was $6,654 for the first quarter of
2008, down from $287,849 in the same period of 2007. Total net income
generated from the chemical business for the first quarter was $1.2
million, an increase of $0.75 million, compared to $0.5 million in
the same period of 2007 as a result of significant growth in sales.
Business development activity
- On January 14, 2008, McVicar announced a letter of intent to acquire
the remaining 49% of equity interest in McVicar (Hongkong) Advanced
Materials Co. Ltd. ("MAM"). MAM, which owns 100% of Hongbo and
Changlong, was acquired from the minority shareholders in order to
obtain 100% ownership of MAM. The Company is in the process of
completing the transaction and thus will account for all net earnings
from the chemical business.
- Production expansion. In February, 2008, Changlong commenced the
construction of a 20,000 tonne per annum expansion facility for its
chemical products, NEP (N-Ethyl-2-pyrrolidone) and NMP (N-methyl-
pyrrolidone). This expansion will add 20% more capacity to the
production. Construction is expected to be completed by the end of
June 2008 and is expected to contribute to chemical revenues in the
second half of 2008.
- Product innovation and development. In March, 2008, one of Hongbo's
chemical products, vinylene carbonate for lithium batteries, was
selected by the National Torch Plan for its 2008 program. With the
demand and growth potential for more powerful lithium batteries, the
product represents tremendous future commercial opportunities for the
- Acquisition of 80% interest in Luyuan Chemical Co. Ltd. On March 11,
2008, Hongbo reached an agreement to acquire 80% interest in Luyuan
Chemical Co. Ltd. ("Luyuan") in Xiangshui, Jiangsu province, China.
The acquisition was closed on April 21, 2008.
"McVicar has experienced consecutive sales and earnings growth in the
past five quarters since the company began reporting revenue," said Gang Chai,
President & CEO of McVicar, "I am very impressed with the progress in the
chemical business with substantial revenue and profit growth. The Company is
also making progress in operation integration and product development. We are
confident that McVicar will achieve excellent results this year with 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: Ms. eXavier Peterson at: 55 University Avenue,
Suite 605, Toronto, ON, M5J 2H7, Tel: (416) 366-7420, Fax (416) 366-7421,