Cavico Corp. (“Cavico”) (NASDAQ: CAVO), a leading infrastructure development company based in Vietnam, today announced its audited financial results for the first quarter ended March 31, 2010. Total revenue for the first quarter ended March 31, 2010 increased by $2.7 million, or 23% to $14.6 million from $11.9 million in the first quarter ended March 31, 2009. The Company’s income before interest, depreciation and amortization, income tax and non-controlling interest for the periods ended March 31, 2010 was $864,989. First Quarter Revenues of 2010 Compared to 2009
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Revenue from the Civil Construction segment for the three months increased by $111,993 to $10.1 million compared to $10.0 million in the same period of 2009. The increase in revenue is primarily attributable to the progress of the Company’s hydropower construction projects. Revenue from the Mining Construction segment during the first quarter of 2010 was $767,346. There is no comparison to 2009 as the mining construction segment, solely from revenues from Cavico Mining, was not included in consolidation in 2009 and is now a new reporting segment for the Company. Revenues from other Commercial Activities, which includes leasing machinery and equipment and selling raw materials and steel fabrication increased in the first quarter of 2010 by $1.9 million, or 99% to $3.8 million from $1.9 million a year ago. The revenue increase in Commercial Activities is primarily attributable to an increase in demand for construction materials as Vietnam continues its economic recovery.Mr. Ha Quang Bui, chairman and chief executive officer of Cavico Corp., stated, “Cavico’s team executed at the highest level during the quarter which further strengthens our market leadership position as Vietnam’s largest non-state-owned engineering and construction contractor. Cavico’s revenue growth demonstrates that we are focused on serving the right markets with the most potential for growth and reaffirms our long-term business strategy. Our national presence, coupled with a solid track-record of delivering high-quality projects in a timely manner will ensure that we will continue to be awarded significant projects from our public sector clients. The government recognizes that in order to attract the right foreign investments into the country, it must improve its infrastructure, which will directly benefit Cavico.” For the first quarter ended March 31, 2010, Cavico had a net loss before non-controlling interest of $1.2 million compared to a net profit of $345,069 for the same period in 2009. The Company’s gross profit in the first quarter of 2010 decreased by $1.0 million compared to the same quarter in 2009. Gross profit for the first quarter 2010 was $1.3 million or 9% of sales compared to $2.4 million for the same quarter 2009. This reduction of gross profit was caused by lower margins from higher costs of goods sold recorded for several projects in their early stages during the first quarter of 2010 as the costs are normally higher at the early stage, write-off of aged work-in-process and recording of project loss on certain projects. The Company anticipates that gross profit will increase during 2010 as a result of higher revenue and lower costs of revenues on continuing projects leading to higher margins. Another factor for the decrease in net income for the first quarter ended March 31, 2010 compared to 2009 was the recording of bad debt expenses of $222,290 in the first quarter of 2010 compared to none in the first quarter of 2009. Net loss attributable to Cavico Corp. for the first quarter of 2010 was $1.5 million, or ($0.49) per share, compared to a net income of $140,204 or $0.05 per share in the same period of 2009.
Financial PositionThe Company’s cash balance as of March 31, 2010 was $3.3 million as compared to $2.4 million at December 31, 2009, accounts receivable of $15.9 million and current work in progress of $29.7 million. Total current liabilities were $99.3 million, which included short-term construction loans and advances from our customers. As of March 31, 2010, total shareholders’ equity was $13.3 million. As of March 31, 2010, Cavico had a loan balance of $68.0 million with interest rates ranging from 10.5% to 18.0% and recorded $1.3 million of interest expense in the first quarter of 2010. The Company would like to repay outstanding debt and lower interest expense in 2010. Backlog The Company’s backlog as of March 31, 2010 was $314.2 million compared to $273.5 million (excluding Cavico Mining) recorded in the fourth quarter 2009. The backlog amount at March 31, 2010 is derived from the end of the fourth quarter backlog minus work completed plus new contracts signed during the first quarter of 2010. Cavico will continue to provide periodic updates when additional major contracts are confirmed. 2010 Guidance Update Mr. Bui reaffirms his comments regarding forward-looking guidance, “We continue to see our growth in the first quarter from the level we reported in the fourth quarter of the prior year. As a result and based upon our current 2010 operating activities and backlog, we expect our total revenues, including Cavico Mining, for 2010 to be in the range of $82 million to $86 million, which is approximately 30% growth and we estimate net income will be in the range of $1.1 million to $1.5 million. Once again, we anticipate that the growth will be driven by existing and new operations managed by the Company and expect that the increases in our mining and construction operations will be led by the growth and development of the Vietnamese economy.”
About Cavico Corp.Cavico Corp. is focused on large infrastructure projects, which include the construction of hydropower facilities, dams, bridges, tunnels, roads, mines and urban buildings. Cavico is also making investments in hydropower facilities, cement production plants and urban developments in Vietnam. The company employs more than 3,500 employees on projects worldwide, with offices throughout Vietnam and a satellite office in Australia. Founded in 2000, Cavico is a major infrastructure construction, infrastructure investment and natural resources conglomerate headquartered in Hanoi, Vietnam. Cavico is highly respected for its core competency in the construction of mission-critical infrastructure including hydroelectric plants, highways, bridges, tunnels, ports and urban community developments. One of the Company’s primary competitive advantages is its ability to nurture a project “from concept through completion” with a vertical portfolio of interrelated investment, permitting, design, construction management and facility maintenance services. Cavico’s project partners include top multi-national corporations and government organizations. The Company employs more than 3,500 full-time, part-time, and seasonal workers. For more information, visit http://www.cavicocorp.com. Information on the Company’s Web site or any other Web site does not constitute a portion of this release. Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995 This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact in this announcement are forward-looking statements, including but not limited to, the Company’s ability to obtain the necessary financing to continue and expand operations, to market its construction services in new markets and to offer construction services at competitive pricing, the Company’s ability to complete projects in the time frame specified; anticipated revenue from the projects to attract and retain management, and to integrate and maintain technical information and management information systems; the effects of currency policies and fluctuations, general economic conditions and other factors detailed from time to time in the Company’s filings with the United States Securities and Exchange Commission and other regulatory authorities. These statements include, without limitation, statements regarding our ability to prepare the Company for growth; the Company’s planned expansions, and predictions and guidance relating to the Company’s future financial performance. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.