Symax Lift (Holding) Co. Ltd.
TSX VENTURE : SYL

Symax Lift (Holding) Co. Ltd.

May 30, 2012 09:20 ET

Symax Lift (Holdings) Announces First Quarter Financial Results

TORONTO, ONTARIO--(Marketwire - May 30, 2012) - Symax Lift (Holdings) Co. Ltd. (TSX VENTURE:SYL) ("Symax" or the "Company") announces its financial results for the three-month period ending March 31, 2012.

Highlights

  • Sales increased to $4.9 million during the first quarter of 2012, representing a 51% increase over the same quarter of previous year. The Company closes its operations for 3 weeks during the Chinese New Year holiday and, as such, the Company generally experiences reduced sales activity during this quarter.
  • The Company has seen continued success in its new product launches. Sales of Dingtai Passenger Elevator continued to grow to represent $2.7 million during the quarter. Further, during the first quarter, the Company launched its new Green Passenger Elevator product line targeted at the lower rise government housing and tier 3 and 4 city developments as well as the export market. In its first quarter of launch, this product achieved $1.5 million in sales and 29% gross margins.
  • Gross profit increased to $1.3 million during the first quarter of 2012, representing a 55% increase over the same quarter of previous year. This improvement was due to higher export sales, which contributed to an improvement in gross margin to 26% in the first quarter from 25% in the same quarter of last year.
  • Holiday-related lower production during the first quarter of 2012, coupled with unusually high selling expenses, resulted in a 22% increase in net loss to $242,000 ($0.00 per share) compared to $199,000 ($0.00 per share) in 2011. During the first quarter EBITDA was $32,000, representing an increase of 33% over the same quarter of last year.
  • As at March 31, 2012 the Company had total cash of $3.3 million and short term bank loans of $8.1 million.
  • Symax has undertaken an expansion of its domestic Chinese business at Wanzhou which, upon completion, is expected to double the Company's production capacity by 2014. The Company has also undertaken an expansion of its service network in support of its geographic expansion.

"With our Dingtai and new Green elevator products, Symax is establishing market position in the domestic Tier 3 and 4 cities and government housing marketplace," stated Ms. Sabrina Zhang, CEO of Symax. "Continued investments in our sales and service network together with the expansion at Wanzhou will enable the Company to continue to expand and service our growing customer base in China."

With the launch of the Green product line, the company experienced an increase in exports during the quarter to 20% compared with 12% in the same period of 2011. This higher level of exports contributed to higher margins during the quarter.

SUMMARY FINANCIAL STATEMENTS
in thousands of Canadian dollars except per share and percentage data
Three Months Ended March 31
2012 2011 % Change
Sales 4,922 3,255 51.2 %
Gross profit 1,265 817 54.8 %
Gross margin 26 % 25 %
Operating expenses 1,390 919 51.2 %
Operating income (loss) (125 ) (102 ) -22.5 %
Other income (loss) (173 ) (75 )
Income taxes 56 (21 )
Net income (loss) (242 ) (198 ) -22.2 %
EBITDA 32 24 33.3 %
Earnings per share - basic $(0.00 ) $(0.00 )
Earnings per share - diluted $(0.00 ) $(0.00 )
Balance Sheet Highlights As at 3/31/12 As at 12/31/11
Total assets 32,098 33,992
Current liabilities 22,550 23,941
Long term liabilities 481 571
Shareholders' equity 9,067 9,480

During the first quarter of 2012, the Company incurred unusually high selling expenses as a result of promotional activities associated with new product launch as well as the cost associated with the bi-annual sales agent conference.

Holiday-related lower production in the first quarter coupled with these unusual sales expenses, the Company incurred a net loss of $242,000 during the quarter compared with a loss of $198,000 in the same period of 2011.

Symax maintains a strong balance sheet with $3.3 million in cash and total loans of $8.1 million.

Expansion Initiatives

Symax has undertaken an expansion of its domestic Chinese business with a new manufacturing facility located in Wanzhou. The land use rights for this facility have been acquired and construction will commence in the second quarter of 2012. Upon completion, this facility is expected to double the Company's production capacity by 2014.

The Company has also undertaken an expansion of its service network in support of its geographic expansion.

About Symax Lift Holdings

Symax is in the business of the development, manufacturing, and sale of elevators, as well as the provision of after-sales services in China and worldwide. Symax's products and services are classified into two separate offerings; a main line of standardized products which include passenger elevators, goods/freight elevators, villa elevators, panorama elevators, hospital elevators, residential and commercial escalators and moving walkways; and customized elevator products.

This news release contains certain statements that may be deemed "forward looking statements". Forward looking statements are statements that are not historical facts and are generally, but not always, identified by the words "expects", "plans", "anticipates", "believes", "intends", "estimates", "projects", "potential" and similar expressions, or that events or conditions "will", "would", "may", "could" or "should" occur. Although the Company believes the expectations expressed in such forward looking statements are based on reasonable assumptions, such statements are not guarantees of future performance and actual results may differ materially from those in forward looking statements. Forward looking statements are based on the beliefs, estimates and opinions of the Company's management on the date the statements are made. The Company undertakes no obligation to update these forward looking statements, except as required by law, in the event that management's beliefs, estimates or opinions, or other factors, should change.

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