Huaxing Machinery Corp.
TSX VENTURE : HUA

Huaxing Machinery Corp.

December 02, 2014 21:34 ET

Huaxing Machinery Corp. Reports Consolidated Financial Results for the Three and Nine Months Ended September 30, 2014

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Dec. 2, 2014) - Huaxing Machinery Corp. (TSX VENTURE:HUA) ("Huaxing" or the "Company") reports its unaudited consolidated financial results as at and for the three and nine months ended September 30, 2014 in accordance with International Accounting Standard 34, Interim Financial Reporting ("IAS 34"). All dollar amounts are expressed in Canadian dollars.

The Company's unaudited financial results for the three months ended September 30, 2014 in comparison to those of the three months ended September 30, 2013 are as follows:

Three Months Ended September 30
2014 2013 Increase (decrease) from 2013 to 2014
$ $ $ %
Sales 5,666,423 7,577,566 (1,911,143 ) (25 %)
Cost of sales 4,114,969 5,382,458 (1,267,489 ) (24 %)
Gross profit 1,551,454 2,195,108 (643,654 ) (29 %)
Income from operations 1,540,278 712,791 827,487 116 %
Net income before income taxes 1,554,054 763,214 790,840 104 %
Net income 1,240,591 614,505 626,086 102 %
Net income attributable to:
Equity holders of the Company 977,387 471,330 506,057 107 %
Earnings per share - basic 0.02 0.01

The Company's total sales decreased from 2013 to 2014 due to decrease in sales of our traditional stone processing machines from $5,605,600 in 2013 to $3,536,628 in 2014; recorded sales of higher profit margin robotic welding system increased from $1,971,966 in 2013 to $2,129,795 in 2014. Gross profit margin decreased from 28.97% in 2013 to 27.38% in 2014 due to decreased margin in the traditional stone processing machines.

The Company's unaudited financial results for the nine months ended September 30, 2014 in comparison to those for the same period in 2013 are as follows:

Nine Months Ended September 30
2014 2013 Increase (decrease) from 2013 to 2014
$ $ $ %
Sales 25,560,321 27,625,771 (2,065,450 ) (7 %)
Cost of sales 18,840,117 20,766,008 (1,925,891 ) (9 %)
Gross profit 6,720,204 6,859,763 (139,559 ) (2 %)
Income from operations 3,680,628 3,232,345 448,283 14 %
Net income before income taxes 3,758,602 3,370,122 388,480 12 %
Net income 3,184,132 2,623,853 560,279 21 %
Net income attributable to:
Equity holders of the Company 2,506,151 2,043,676 462,475 23 %
Earnings per share - basic 0.04 0.03

The Company's total sales decreased by $2,065,450 or 7% from 2013 to 2014. Sales of the higher profit margin robotic welding system in 2014 increased by 62.86% from 2013, and sales of lower profit margin traditional stone processing machinery decreased by 35.38% from 2013 to 2014. As a result, gross profit margin increased from 24.83% in 2013 to 26.29% in 2014.

At September 30, 2014 the Company had cash of $2,779,810 and working capital of $15,143,657 compared to cash of $1,037,670 and working capital of $10,881,664 at December 31, 2013.

About Huaxing Machinery Corp.

Huaxing is a manufacturer of stone processing equipment and steel structure fabrication equipment. Through its wholly owned subsidiary Gold Rhino Limited, Huaxing holds an 80% controlling equity interest in Shandong Gold Rhino Huaxing Machinery Corp., the operating entity that holds the manufacturing facilities located in Boxing County, Shandong Province, China. Its main products are stone sawing, cutting, polishing and processing machinery, and robotic welding system for steel structure fabrication. The processed stones and steel structures are both used in the building and infrastructure construction industry.

Forward-Looking Statements

Certain information regarding Huaxing Machinery Corp. contains herein may constitute forward-looking statements within the meaning of applicable securities laws. Forward-looking statements may include estimates, plans, expectations, opinions, forecasts, projections, guidance or other statements that are not statements of fact. Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to have been correct. The Company cautions that actual performance will be affected by a number of factors, many of which are beyond the Company's control, and that future events and results may vary substantially from what the Company currently foresees. The Company assumes no obligation to update such forward-looking statements, except as required by applicable securities laws or exchange regulations. The Company's forward-looking statements are expressly qualified in their entirety by this cautionary statement. The Company seeks safe harbour.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Contact Information

  • Huaxing Machinery Corp.
    Xinlin Huang
    CFO & Corporate Secretary
    778-373-1485