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Enter Symbol
or Name
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Liuyang Fireworks Ltd
Symbol FWK
Shares Issued 55,231,617
Close 2015-02-27 C$ 0.025
Market Cap C$ 1,380,790
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Liuyang loses $36,000 in Q2 fiscal 2015

2015-03-02 20:06 ET - News Release

Mr. Jacky Long reports

LIUYANG FIREWORKS REPORTS IMPROVED SECOND QUARTER FINANCIAL RESULTS

Liuyang Fireworks Ltd. has released financial results for its second quarter and first six months ended Dec. 31, 2014. (All amounts are in Canadian dollars unless otherwise indicated.)

Highlights for the second quarter:

  • Stronger international and domestic sales resulted in improved financial performance in the second quarter.
  • Revenues were $5.3-million representing a 16.5-per-cent improvement over the second quarter of last year. Eighty-six per cent of total revenues during the quarter were attributable to sales to international markets.
  • Earnings before interest, taxes, depreciation and amortization for the quarter improved to $34,000 compared with negative $232,000 a year earlier.
  • The company incurred a net loss of $36,000 for the quarter, compared with a net loss of $209,000 for the same period a year earlier.

"Stronger sales, both our internationally and domestically, resulted in improved financial performance for the quarter," said Miao Hu, Liuyang's president and chief executive officer. "With continued success in the international market and improving market conditions in China, we achieved double-digit growth in revenue and gross profit, and a return to positive EBITDA during the quarter. We remain focused on growth in both of our key markets."

                       SUMMARY FINANCIAL STATEMENTS 
             (in thousands except per-share and percentage data)

                                            Three months ended      Six months ended 
                                                   Dec. 31,              Dec. 31,
                                               2014       2013       2014       2013    

Revenue                                      $5,316     $4,565     $7,667     $7,687
Gross profit                                 $1,963     $1,624     $2,820     $2,633
Gross margins                                  36.9%      35.6%      36.3%      34.3%
EBITDA                                          $34      $(232)      $(75)     $(443)
Net income                                     $(36)     $(410)     $(246)     $(787)
Net income per share, basic                 $(0.001)   $(0.007)   $(0.002)   $(0.014)
Diluted                                     $(0.001)   $(0.007)   $(0.002)   $(0.014)

Review of second quarter results

Revenue for the quarter was $5.32-million, which represented an increase of $750,000 (or 16.5 per cent) compared with the same period a year ago. The increase was attributable to a $530,000 increase in international sales and a $220,000 improvement in domestic revenue during the quarter. During the quarter, the company earned 86 per cent of its revenues from international markets. Gross profit for the quarter was $1.96-million, representing an increase of $340,000 (or 20.9 per cent) compared with a year earlier. Gross margin as a percentage of sales increased to 36.9 per cent from 35.6 per cent during the same period last year.

EBITDA for the quarter was $34,000, representing an increase of $266,000 (or 115 per cent) compared with the second quarter of fiscal 2014. The improvement was attributable to higher revenue and gross profit during the quarter, as well as a $155,000 reduction in sales expenditures, partially offset by a $120,000 increase in general and administrative expenses. The company had a net loss of $36,000, or 0.1 cent per share, compared with a net loss of $410,000, or 0.7 cent per share, for the second quarter of last year.

At Dec. 31, 2014, the company had cash of $2.06-million, and working capital of $7.62-million. These figures compare with cash of $1.75-million, and working capital of $7.19-million at Dec. 31, 2013.

Liuyang's consolidated financial statements for the three and six months ended Dec. 31, 2014, and related management's discussion and analysis will be filed with securities regulatory authorities within applicable timelines and will be available on SEDAR.

Resignation of auditor

The company also announced that its auditor, Calvista LLP, professional accountants, has resigned, effective Feb. 2, 2015. The company also reports that there are no unresolved differences of opinion between the company and its former auditor. The company has already commenced a search for a replacement auditor.

We seek Safe Harbor.

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