TORONTO, ONTARIO -- 08/14/07 --
Migao Corporation (TSX: MGO), a China-based leading specialty potash fertilizer producer, is pleased to report sales of $26.9 million for the quarter ended June 30, 2007 compared to $15.4 million in the same quarter of 2006. EBITDA in the third quarter of fiscal 2007 was $4.5 million, compared with $2.4 million in the same period in 2006. Net income was $3.2 million for the quarter compared to $2 million in 2006. Basic earnings per share were $0.09 for the third quarter of fiscal 2007 compared to $0.08 for the same period in 2006.
For the nine months ended June 30, 2007, Migao reported sales of $76.3 million compared to $42.9 million in the same period in 2006. EBITDA for the nine months ended June 30, 2007 was $11.9 million, compared with $7.4 million in the same period in 2006. Net income was $8.9 million for the nine months ended June 30, 2007 compared with $6.6 million in 2006. Basic earnings per share were $0.28 for the nine months period compared $0.31 for the same period in 2006.
As at June 30, 2007, Migao reported cash and cash equivalents of $15.3 million and working capital of $42.6 million. At June 30, 2007, long-term debt was nil and current bank debt was $2.8 million.
"This latest quarter is the first quarter that we did not have new capacity scheduled to come online since going public. Even with similar output in this quarter over last quarter, we were able to achieve higher margins through modest price increases as well as production efficiencies," said Mr. Liu Guocai, Migao's President and CEO. "We will be adding 20,000 tonnes of potassium nitrate in a few weeks at Sichuan Migao and our two new 40,000-tonne potassium sulphate facilities in Changchun and Shanghai will commence operations later this year and very early in 2008, respectively."
Summary Financial Results
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For the 9 months For the 3 months
ended June 30 ended June 30
---------------------------------------------
(In thousands of $CDN except
per share data) 2007 2006 change 2007 2006 Change
------------------------------------------------------------------------
Sales $76,308 42,915 78% 26,865 15,426 74%
Gross profit 17,293 10,124 71% 6,339 3,113 104%
Net income 8,914 6,641 34% 3,167 2,006 58%
EBITDA 11,868 7,448 59% 4,530 2,439 86%
Basic EPS 0.28 0.31 0.09 0.08
Diluted EPS 0.27 0.31 0.08 0.08
Weighted average number of
shares (in millions of shares)
Basic 32.3 21.7 49% 36.0 24.2 49%
Fully Diluted 33.3 21.7 54% 38.4 24.3 58%
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Balance Sheet Highlights
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(In thousand of $CDN except
for ratios) June 30, 2007 September 30, 2006
------------------------------------------------------------------------
Current ratio 5.01:1 2.89:1
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Cash 15,317 16,316
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Working capital 42,592 19,362
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Total assets 91,034 57,087
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Total debt 10,624 10,228
------------------------------------------------------------------------
Total equity 80,410 46,859
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Debt / Equity 13% 22%
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Gross margin as a percentage of revenues was 23.6% for the quarter ended June 30, 2007, a slight increase over the second quarter as expected by management.
Income tax during the quarter totaled $0.8 million. Each of Migao's wholly owned operating subsidiaries qualify for a favourable tax program whereby the first two profitable years are tax exempt and the next three years' tax rate is half of the prescribed corporate rate. Income tax paid during the quarter is a result of Sichuan Migao being in its second of the three-year tax reduced rate and Guangdong Migao being in its first of the three-year tax reduced rate.
The Company's strategy is to continue building capacity in China to primarily serve the Chinese market. Beyond China-based customers, Migao has begun exporting small quantities of its specialty fertilizer in an effort to build international commercial relationships. As the Company's production capacity expands, export markets will be more aggressively pursued.
Expansion activity currently in progress includes two new 40,000 tonne potassium sulphate facilities and an expansion of 20,000 tonnes of potassium nitrate at Sichuan Migao. With the completion of the announced expansion projects, the annual combined production capacity of potassium nitrate and potassium sulphate will be in excess of 300,000 tonnes. As well, the production capacity at that time will include 360,000 tonnes per year of by-product.
Conference Call
Migao will be hosting a conference call to discuss the first quarter results at 10:00am Tuesday August 14, 2007. The details are as follows:
Dial in number: 416-641-6131 or 1-866-226-1799
Taped replay (until August 28, 2007): 416-695-5800 or 1-800-408-3053
Taped replay access code: 3231484#
Migao Corporation, through its wholly owned subsidiaries, owns and operates fertilizer production plants in various strategic locations across China for the production and sales of specialty potash fertilizer (potassium nitrate and potassium sulphate) to the Chinese agricultural market. Please visit www.migaocorp.com.
This press release contains statements that may constitute forward-looking statements, which may include financial and other projections, as well as statements regarding future plans, objectives or economic performance. Forward-looking information involves significant risks, assumptions, uncertainties and other factors that may cause actual future results or anticipated events to differ materially from those expressed or implied and accordingly, investors should not place undue reliance on any such forward-looking statements. Factors that could cause results to vary include those expressed in the Company's filings with Canadian securities regulatory authorities. All information presented herein should be read in conjunction with such filings.
Contacts:
Migao Corporation
Jay Hussey
Vice President Corporate Finance
(416) 869-1108 ext. 104
Email: jay.hussey@migaocorp.com
Migao Corporation
Paul Zhang, C.A., C.P.A.(IL)
Chief Financial Officer
(416) 869-1108 ext. 103
Email: paul.zhang@migaocorp.com
Website: www.migaocorp.com
