MCVICAR ANNOUNCES HONGBO RENEWS SUPPLY AGREEMENT WITH DUPONT: McVicar Industries Inc. (“McVicar”) is pleased to announce that its Chinese subsidiary, Zhejiang Hongbo Chemical Com Ltd. ("Hongbo") has renewed its supply agreement with DuPont of the USA for another three years. Hongbo has been a supplier for a product that DuPont ordered for the past three years. Product quality and delivery services to the customer have been very satisfactory during that period of time. In the new agreement, Hongbo is also asked for increased supply quantity due to increased market demand. This contract will automatically be extended for tow consecutive tow year terms if both sides agree.
"I am very pleased with the positive developments from Hongbo. The company was able to win an increased confidence from our strategic customer through its constant efforts in improvement in product quality and satisfactory customer service," commented Dr. Gang Chai, President & CEO of McVicar.
MCVICAR ANNOUNCES ENGAGEMENT OF KPMG McVicar Industries Inc. (“McVicar”) is pleased to announce that it has engaged KPMG LLP (KPMG) as auditors. KPMG provides services to both private and public companies.
McVicar would like to thank McGovern, Hurley, Cunningham LLP for their past years of service and wish them future success.
MCVICAR ANNOUNCES SETTLEMENT OF LEGAL DISPUTES IN LUYUAN AND RESUMING OPERATIONS OF LUYUAN: McVicarIndustries Inc. (“McVicar” or “the Company”) announces that it has settled the legal disputes in Luyuan Chemical Co., Ltd. (“Luyuan”) and is in the process of resuming the operations of Luyuan.
In 2008, the Company’s subsidiary, Luyuan Chemical Co., Ltd., was a defendant in seven lawsuits filed by six individuals requesting Luyuan to repay loans and interest that were allegedly borrowed by Luyuan before being acquired by McVicar’s 100% owned subsidiary, Zhejiang Hongbo Chemical Co.,Ltd (“Hongbo”), in April 2008, and one lawsuit filed by a former employee of Luyuan for wrongful dismissal. In 2009 the local court had ruled against Luyuan. As of June 30, 2010, the total amounts in connection with these legal proceedings determined by the court rulings was RMB2,402,100 ($375,688) of principal and RMB742,699 ($116,158) of compounded interest, and some contingent interest to be determined.
The Company has been able to negotiate with those plaintiffs to settle the disputes by the Company paying approximately RMB1,600,000 ($246,560) to the plaintiffs. The settlement agreements have been signed with those plaintiffs and the Company has paid the amount. As of today’s date, all the disputes have been settled and the Company’s 80% ownership interest in Luyuan are now free of charges.
Based on the original purchase agreement signed by Hongbo, Luyuan believed it had a strong defence to all these claims and thus could reclaim all these pending payments from Luyuan’s previous controlling shareholder, currently a 10% minority shareholder of Luyuan, who had guaranteed all of the existing and any contingent liabilities incurred prior to the period of acquisition. The Company has not yet decided what action will be taken against this Luyuan shareholder.
Before the settlement of the obligations, Luyuan in previous periods had accrued $375,360 (RMB2,400,000) for the contingent liabilities as at June 30, 2010 (December 31, 2009 - $367,200; RMB2,400,000). In addition, as at June 30, 2010 Luyuan had written off the value of its inventory by RMB597,148 ($93,394) and written down the capital assets of Luyuan by RMB1,000,000 ($156,400). These provisions reflect the Company’s best estimate of possible losses according to information available at June 30, 2010. The actual settlement amount is less than management’s former estimate.
As these disputes have now been settled, Luyuan has been able to resume the ownership of inventory with a value of RMB334,142 ($52,260) previously seized by court orders. The Company is in the processes of resuming Luyuan;s operations, which were suspended in July 2009. The processes to resume operations include purchase of necessary equipment to use newer technology and increase the production efficiency, repairs and maintenance, and recruiting and training of staff. Management plans to invest approximately $1.2 million (RMB 8 million, including working capital) in resuming the production. Newer technology with better efficiency and lower production costs will be used in Luyuan to produce dihydroxyacetophenone, a key product of Luyuan that is used as material by Hongbo (another subsidiary of the Company) in production for goods supplied to Dupont, a key customer of the Company.
“I am glad that these issues have been settled and that the related contingency which has been negatively affecting the Company is now gone” said Gang Chai, Chief Executive Officer of McVicar. “Management of the Company expects the resumption of operations at Luyuan will contribute positively to the Company’s business revenues and growth.”
MCVICAR ANNOUNCES SECOND QUARTER RESULTS: McVicar Industries Inc. ("McVicar" or the “Company”) announces today that it has filed its unaudited interim financial statements and management's discussion and analysis for the three and six month periods ending June 30, 2010. The detailed financial statements and can be found on www.sedar.com.
Second Quarter and First Half of 2010 Financial Highlights During the second quarter of 2010 the Company, despite the Changlong subsidiary production being suspended, reported satisfactory results.
· Sales: sales for the second quarter of 2010 were $8.6 million, approximately the same as the second quarter of 2009. Sales for the first half of 2010 were $17.3 million, being approximately the same as the first half of 2009.
· Gross profit: $2.74 million for the second quarter of 2010, being 4% lower than $2.85 million in the second quarter of 2009. Gross profit for the first half of 2010 was $5.44 million, a 12% growth from $4.86 million of the first half of 2009.
· Operating income: $1.1 million for the second quarter of 2010, an increase of 24% compared to $0.91 million in the second quarter of 2009. Operating income for the first half of 2010 was $2.35 million, a significant 59% growth from $1.48 million of the first half of 2009.
· Net income and earnings per share: net income was $0.75 million for the second quarter of 2010, a decrease of 22% compared to $0.96 million in the second quarter of 2009. The decrease was due to a one-time gain of $350,507 from disposal of assets in the second quarter of 2009. Earnings per share for the second quarter of 2010 were $0.02 compared to $0.03 in the second quarter of 2009. Net income was $1.45 million for the first half of 2010, a growth of 8% compared to $1.35 million in the first half of 2009. Earnings per share for the first half of 2010 was $0.04 compared to $0.04 in the first half of 2009.
· Cash flows generated by operation activities: a negative $1.46 million of cash flows for operating activities in the second quarter of 2010, compared to $1.76 million cash from operating activities for the second quarter of 2009. Cash flows from operating activities for the first half of 2010 was a negative $0.55 million, compared to $4.4 million from the first half of 2009. The negative cash flows from operating activities in the periods of 2010 were mainly due to increased accounts receivable and other receivables.
“The Company reported steady sales and revenue, while the gross margin remains higher compared to previous quarters, continuing to reflect management’s cost reduction and product upgrading.” said Gang Chai, Chief Executive Officer of McVicar.
MCVICAR CLOSES PRIVATE PLACEMENT: McVicar Industries Inc. (the “Company”, “McVicar”) (TSXV: MCV) is pleased to announce that it has completed a non-brokered private placement of 3,000,000 common shares at a price of $0.45 per share to raise gross proceeds of $1,350,000 (the "Offering"). The Offering was purchased by off shore investors, all of whom are at arm’s length from McVicar.
The common shares comprising the Offering are subject to a four-month hold period following closing of the private placement. Following this placement there will be 37,427,320 issued and outstanding common shares of McVicar.
Proceeds from the Offering will be used for the development and implementation of a new method for the production of 4'-Hydroxyacetophenone (“4HAP”),a key raw material for chemical products produced by the Company’s wholly-owned subsidiary, Zhejiang Hongbo Chemical Co., Ltd., as described in McVicar’s press release of June 23, 2010, and for general corporate purposes. The Offering is subject to approval by the TSX Venture Exchange.
MCVICAR ANNOUNCES ADVANCE IN PRODUCT DEVELOPMENT: McVicar Industries Inc. (“McVicar”) is pleased to announce that its research and development team has successfully developed a new method for the production of 4'-Hydroxyacetophenone, (“4HAP”), a key raw material for Zhejiang Hongbo Chemical Co., Ltd.’s (“Hongbo”) chemical products used for the DuPont project. Hongbo is a fully owned subsidiary of McVicar.
Hongbo acquired Xiangshui Luyuan Chemical Co. Ltd. (“Luyuan”) in 2008 in order to produce to ensure that Hongbo could provide the quantity and quality of supplies for the DuPont project. Luyuan’s operation was stopped due to unexpected debt claims from previous creditors. Luyuan’s production of 4HAP also experienced very low profit margins due to the low productivity (about 60%) of original production process and high amounts of waste. The new technology simplifies the production process and uses a new and recycling catalyst for the production, generating minimum waste resulting in substantially reduced production costs. This new process can generate up to 90% of the final product and is expected to improve profitability of the project.
McVicar is in the process of pilot testing the new process, sourcing and ordering equipment, and searching for an ideal site for final production.
MCVICAR ISSUES STOCK OPTIONS: McVicar Industries Inc. announces that it has granted incentive stock options in respect of 1,330,000 shares exercisable at $0.50 per share for a period of five years to directors, officers, employees and consultants of the Company.
MCVICAR ANNOUNCES Q1 RESULTS: McVicar Industries Inc. ("McVicar" or the “Company”) announces today that it has filed its unaudited interim financial statements and management's discussion and analysis (“MD&A”) for the three month period ending March 31, 2010. The detailed financial statements and MD&A can be found on www.sedar.com.
Highlights of the first quarter results:
Sales: $8.7 million, an increase of 3.7% compared to $8.4 million in the first quarter of 2009. Before translating into Canadian dollars, the total sales in RMB increased by approximately 18% and total sales in US dollar increased by 36%.
Gross profit: $2.7 million, an increase of 35% compared to $2 million in the first quarter of 2009.
Operating income:$1.2 million, an increase of 127% compared to $0.57 million in the first quarter of 2009.
Net income and earnings per share: net income was $0.7 million, an increase of 81% compared to $0.39 million in the first quarter of 2009. Earning per share was $0.02 compared to $0.01 in the first quarter of 2009.
Cash flows generated by operation activities: $1.49 million, down 44% from $2.66 million for the first quarter of 2009. (Cash flows before change in non-cash working capital in the quarter was $1.62 million, an increase of 44% from $1.13 million in the first quarter of 2009)
Management is very satisfied with the operating results of the first quarter.
“The Company reported excellent growth in both revenue and net income for both the technical products sector and the chemical products sector. Gross margin was higher compared to previous quarters, reflecting management’s continuous efforts in cost reduction and product upgrading. The balance sheet was stronger than ever before. The Company is in a great position for future growth.” said Winfield Ding, Chief Financial Officer of McVicar.
CHANGLONG CHEMICAL STOPS PRODUCTION FOR RELOCATION: McVicar Industries Inc. ("McVicar") announces that one of its chemical subsidiaries, Hangzhou Changlong Chemical Co. Ltd. (“Changlong”), has stopped production from its current operating site in the city area due to the relocation order from the City government of Hangzhou. Changlong, as well as its current host, Longshan Chemical Group (“Longshan”), is to move into a chemical industrial park outside of Hangzhou city that was allocated by the city government. Longshan was to build the necessary manufacturing facility and rent it to Changlong, based on a leasing agreement reached in September, 2009. Changlong is currently waiting and pressing for the completion of the facility before it can move in and resume production. Changlong is pursuing transitional production options in other areas.
MCVICAR ANNOUNCES MEETING RESULTS: McVicar Industries Inc. ("McVicar" or the "Company") is pleased to announce the results of its annual and special meeting (the "Meeting") held on May 26, 2010. At the Meeting, the shareholders of the Company approved all resolutions proposed by management, including the election of directors, the stock option plan and the appointment of McGovern, Hurley, Cunningham, LLP as the Company's auditor. The new board of directors is formed by five members, Dr. Gang Chai (Chairman), Dr. James Misener, Mr. Anthony Naldrett, Mr. Henry Tse, and Mr. Alfred Wirth.
MCVICAR APPOINTS CFO: McVicar Industries Inc. (the “Company”, “McVicar”) is pleased to announce the appointment of Mr. Yongbiao (Winfield) Ding as Chief Financial Officer (“CFO”) of the Company, subject to regulatory approval. Winfield Ding is a member of the Chartered Accountants of Ontario, and is a MBA graduate from the Chinese University of Hong Kong.
Prior to joining McVicar, Mr. Ding was an audit manager in public accounting with years of experience in auditing public companies complying with Canadian reporting and has extensive accounting and financial knowledge and experience for businesses in China. Mr. Ding will be responsible for accounting, financial management and corporate compliance of the Company. Mr. Kevin Ming Zhang has resigned as Chief Financial Officer of the Company with thanks from the Company for his good work and is wished well in his future endeavours. "I am pleased with the appointment of Mr. Winfield Ding to our senior management team." commented Dr. Gang Chai, President & CEO of McVicar. "Mr. Ding’s financial experience and expertise are of great value."
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