McVicar Announces Fourth Quarter and Fiscal Year-End 2009 Financial Results
Trading Symbol: MCV
TORONTO, April 16 /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, 2009. The detailed financial statements and MD&A can be found on www.sedar.com. All amounts are in Canadian dollars unless otherwise noted.
- Adjusted net income grew 1.8 times year over year to $2.1 million or
$0.06 per share.
- Revenues from chemical business grew 3 percent year over year to
- Cash generated by operating activities grew 3.7 times year over year
to $ 6 million.
Financial Highlights for the Year Ended December 31, 2009:
- Sales were $35 million, a decrease of 4.8% compared to $36.7 million
- Gross profit was $10.6 million, an increase of 24% compared to $8.5
million in 2008. Gross profit, as a percentage of sales increased to
30% in 2009 from 23% in 2008. The significant increase in gross
margin is attributable to a number of factors, including low raw
material purchase price secured by future purchase contracts, less
provision for obsolete inventories, and the positive impact due to a
$0.52 million benefit from the sale of inventory written down in
- Operating income was $1.6 million versus operating loss of $1.7
million in 2008.
- Net income was $0.49 million or $0.01 per share compared to net loss
$3.1 million or $0.10 per share in 2008.
- Excluding one-time items of investment income (loss), gain (loss) on
disposal of equity investment, impairment of goodwill and write-off
of intangible assets, adjusted net income for 2009 was $2.1 million
or $0.06 per share, an increase of 180% compared to $0.74 million or
$0.02 per share for 2008. The significant year-over-year increase is
primarily attributable to higher gross margin and lower operating
expenses as a result of as a result of strategic cost reduction
- Cash provided by operating activities for 2009 was $5.96 million, an
increase of $4.7 million or 370%, compared to $1.27 million for 2008.
Financial Highlights for the Fourth Quarter Ended December 31, 2009:
- Sales were $8.4 million, an increase of 6.7% compared to $7.9 million
in the year-ago quarter.
- Gross profit was $2.5 million, an increase of 112% compared to $1.2
million in the year-ago quarter.
- Operating loss was $1.4 million, a decrease of 70% compared to $4.6
million in the year-ago quarter.
- Net loss was $1.7 million or $0.05 per share, a decrease of 61%
compared to $4.5 million or $0.13 in the year-ago quarter.
- Jite (Kunshan) plant: On October 9, 2009, Jite incorporated the
wholly-owned subsidiary of Jite Industrial (Kunshan) Co., Ltd. (Jite
Kunshan) with registered capital of $20 million USD. Jite Kunshan is
located at the Northwest of Shanghai city, at Economic and
Technological Development Zone, in Jiangsu Province, China.
- Pending moving of Chanlong plant: In May 2009, Changlong reached
agreements regarding relocation of its operating plant, since the
Chinese Government will expropriate its current rented land. The
total government compensation fund in the amount of RMB 8.5 million
($1.3 million CDN) will be adequate to cover all of its moving costs.
It is expected that the production capacity will increase by 50% on
the new plant upon the completion of relocation by the end of 2010.
- Suspension of Luyuan's operations: In July 2009, Luyuan suspended
operations due to the combined results of its operating loss and
lawsuits against Luyuan. The resumption of operations will depend in
part on how well and when these liabilities are settled.
- McVicar (Hong Kong) Advanced Materials Co. Ltd., ("MAM"): On January
7, 2009, MAM reached an agreement with Sanlong Holdings Co. Ltd.
("Sanlong") to exchange Sanlong's 9.5% equity interest in MAM for a
38% equity interest in Changlong. In connection with this
transaction, MAM further reached an agreement with Sanlong to
purchase the 38% equity interest in Changlong for cash consolidation
of RMB 9,405,000 ($1,441,787) on December 30, 2009. Upon closing the
transaction, McVicar will have a 100% interest in MAM, and in turn
MAM will have a100% interest in Changlong.
"In 2009, McVicar achieved impressive performances by implementing a series of strategic initiatives despite the challenging economic weakness," said Gang Chai, McVicar's President and CEO. "These initiatives, which we believe will ultimately strengthen our competitive position, mainly focused on cost reductions, deepening our relationships with key customers and streamlining our operations to improve efficiency. In 2010, we will continue to focus on maintaining profitable businesses and maximizing our cash flow."
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: Please contact Ms. eXavier Peterson or Kevin Ming Zhang, CFO at: 55 University Avenue, Suite 605, Toronto, ON, M5J 2H7, Tel: (416) 366-7420, Fax (416) 366-7421, www.mcvicar.ca