HANOI, Vietnam, Nov. 23, 2010 (GLOBE NEWSWIRE) -- Cavico Corp. (Nasdaq:CAVO), a major infrastructure construction, infrastructure investment, and natural resources conglomerate based in Vietnam, today announced its financial results for the third quarter ended September 30, 2010.

Mr. Ha Quang Bui, Chairman and Chief Executive Officer of Cavico, commented, "We are nearing a corner in our operational performance, as a significant number of our projects are moving from the early stages, which involved high costs compared to the revenue generated, into the middle stages, where the gross margin is expected to be higher since the increase in revenue will be higher than the related cost increase. As shown in the Vietnam Power Development Master Plan VI, the Vietnamese government plans to build 48 hydropower stations exceeding 50 MW by 2025, with total expected capacity of 21,300 MW, and over the period from 2006 to 2025 the electricity sector will need around $52 billion invested in power generation. We expect to benefit significantly from the Vietnamese government's focus on the electricity shortage and development of the related projects, as well as the overall growth of Vietnamese economy."

Revenues

Revenue from the Civil Construction segment for the third quarter of 2010 was $12.3 million, compared to $14.8 million in the same period of 2009. The decrease in revenue was due primarily to an increase in the currency conversion rate between the Vietnamese Dong (VND) and the U.S. dollar. Revenue from the Mining Construction segment during the third quarter of 2010 was $172,709. No 2009 comparison figures are available, as Cavico Mining was first included as a consolidated subsidiary of the Company in 2010. Revenues from other Commercial Activities, which includes leasing machinery and equipment and selling raw materials and steel fabrication, decreased $64,387, or 2.9%, to $2.1 million in the third quarter of 2010, down from $2.2 million a year ago. The revenue decrease in Commercial Activities was primarily attributable to an increase in the currency conversion rate between the Vietnamese Dong (VND) and the U.S. dollar. Third quarter commercial activities revenue in Vietnamese Dong increased 6% compared to the same period in 2009.

Gross Profit

The Company's gross profit in the third quarter of 2010 increased by $0.6 million compared to the same quarter in 2009. Gross profit for the third quarter 2010 was $1.7 million, or 11.4% of sales, compared to $1.1 million for the same quarter in 2009. The increase in gross profit and gross margin was primarily attributable to the phases of the Company's projects in progress. Many of the Company's projects were in early stages during the third quarter of 2010, in which higher costs, compared to revenues, were incurred. The Company anticipates that gross profit will increase during the remainder of 2010 and during 2011 as a result of higher revenue and lower costs of revenues on continuing projects, leading to higher margins.

Net Loss

For the third quarter ended September 30, 2010, Cavico had a net loss before non-controlling interest of $1.7 million compared to a net loss of $3.0 million for the same period in 2009. Net loss attributable to Cavico for the quarter was $1.9 million, or $0.62 per share, compared to $2.6 million, or $0.85 per share, in the third quarter of 2009.

Liquidity and Capital Resources

The Company's cash balance as of September 30, 2010 was $2.7 million as compared to $2.4 million at December 31, 2009. As of September 30, 2010, accounts receivable were $16.5 million and current work in progress was $25.4 million. Total current liabilities were $103.3 million, which included short-term construction loans and advances from customers. As of September 30, 2010, total shareholders' equity was $12.3 million.

As of September 30, 2010, Cavico had a loan balance of $70.1 million with interest rates ranging from 10.5% to 19.0% and recorded $1.8 million of interest expense, including capitalized interest, in the third quarter of 2010.

Backlog

The Company's backlog as of September 30, 2010 was $303.3 million compared to $304.6 million as of June 30, 2010. The backlog amount at September 30, 2010 is derived from the end of the second quarter backlog minus work completed plus new contracts signed during the third quarter of 2010. Cavico will continue to provide periodic updates when additional major contracts are confirmed.

Guidance Update for Fiscal 2010

Based on its current operating activities and backlog, the company modifies its previously stated guidance for the fiscal year 2010 financial results, projecting revenues of $59 million to $62 million, or roughly 4% growth from fiscal 2009 revenue without considering currency rate fluctuations. Management anticipates a net loss of $6 million to $7 million for fiscal 2010.

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, mineral exploration and urban developments in Vietnam. The company employs more than 3,000 employees on projects worldwide, with offices throughout Vietnam and a satellite office in Australia. The Company has two subsidiaries, Cavico Mining (HSX:MCV), and Cavico Industry & Mineral (HNX:CMI), which are listed in Vietnam on the Ho Chi Minh and Hanoi Stock Exchanges.

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 3,000 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.
CAVICO CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
 
  September 30, 2010 December 31, 2009
ASSETS    
     
Current Assets:    
Cash $ 2,723,639 $ 2,391,316
Investments, available for sale 2,504,925 2,711,912
Equity method investment in Cavico Mining -- 1,239,851
Accounts receivable -trade- net 16,514,167 15,809,989
Receivable – other 11,297,653 10,550,284
Inventory 5,166,101 4,114,075
Construction work in process 25,363,577 25,881,123
Receivables from and advances to related parties 1,546,861 984,684
Other current assets 2,350,689 2,205,915
Total current assets 67,467,612 65,889,149
     
Fixed Assets:    
Land and building development costs 10,467,661 11,018,893
Temporary housing assets 528,529 266,632
Machinery and equipment 26,436,897 24,355,935
Vehicles 11,702,477 7,268,114
Office and computer equipment 779,959 727,362
  49,915,523 43,636,936
Less accumulated depreciation (22,573,034) (15,387,540)
Net fixed assets 27,342,489 28,249,396
     
Intangible Assets:    
Goodwill 917,485 727,073
Licenses – net 743,261 255,875
Net intangible assets 1,660,746 982,948
     
Other Non Current Assets:    
Investments, cost method 4,395,104 2,495,536
Long-term retention receivables 13,254,380 11,400,629
Prepaid expenses 2,161,099 1,606,973
Long-term construction work in process 20,350,026 3,054,564
Long-term advances related parties 52,820 55,738
Other assets 1,142,193 2,130,049
Total other assets 41,355,623 20,743,489
     
TOTAL ASSETS $ 137,826,470 $ 115,864,982
     
LIABILITIES    
     
Current Liabilities:    
Accounts payable $ 18,571,337 $ 16,432,092
Accounts payable – related parties 81,951 9,896
Accrued expenses 9,352,402 6,722,643
Advances from customers 6,024,227 6,887,558
Payable to employees 4,394,776 4,215,547
Notes payable - current 63,950,606 54,740,704
Notes payable - related parties 394,980 220,091
Convertible debenture, net of discount 76,153 --
Current portion of capital lease obligations 412,304 289,199
Total current liabilities 103,258,736 89,517,730
     
Long-Term Liabilities:    
Long-term advances from customer 14,824,800 10,858,809
Capital lease obligations – long-term 1,300,714 858,635
Long-term debt 6,157,805 5,374,508
Total long-term debt 22,283,319 17,091,952
     
TOTAL LIABILITIES 125,542,055 106,609,682
     
Commitments and Contingencies -- --
     
Stockholders' Equity:    
Preferred stock:$.001 par value - 25,000,000 authorized, none issued and outstanding -- --
Common stock, $.001 par value; 300,000,000 shares authorized; 3,275,036 shares issued and 3,047,795 shares outstanding 3,048 3,048
Additional paid-in capital 13,619,865 13,619,865
Accumulated deficit (16,225,205) (11,400,322)
Accumulated other comprehensive loss (1,511,861) (1,388,509)
Total Cavico Corp. stockholders' equity (deficit) (4,114,153) 834,082
Non-controlling interest 16,398,568 8,421,218
Total stockholders' equity 12,284,415 9,255,300
     
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 137,826,470 $ 115,864,982
 
 
CAVICO CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(Unaudited)
 
  Three Months Ended September 30, Nine Months Ended September 30,
  2010 2009 2010 2009
        (Restated)
Revenues:        
         
Civil construction $ 12,294,106 $ 14,793,921 $ 34,207,867 $ 36,699,183
Mining construction 172,709 -- 1,515,569 --
Commercial activities 2,138,101 2,202,488 8,179,762 5,767,197
Total revenue 14,604,916 16,996,409 43,903,198 42,466,380
         
Cost of Goods Sold:        
Civil construction 10,770,860 14,146,658 31,798,468 31,724,150
Mining construction 295,648  -- 1,665,427  --
Commercial activities 1,876,133 1,797,571 6,992,820 4,845,174
Total cost of goods sold 12,942,641 15,944,229 40,456,715 36,569,324
         
Gross Profit 1,662,275 1,052,180 3,446,483 5,897,056
         
Operating Expenses:        
Selling expenses 98,095 329,863 431,096 499,064
Bad debt expenses 161,461 250,386 1,067,211 389,576
General & administrative expenses 2,026,162 1,998,537 5,770,834 5,110,033
Total operating expenses 2,285,718 2,578,786 7,269,141 5,998,673
         
 Total income(loss) from operations (623,443) (1,526,606) (3,822,658) (101,617)
         
Other income (expenses):        
Gain(loss) on disposal of assets 258,146 (902) 392,874 7,298
Other income 27,611 60,713 86,360 109,451
Income(loss) from investment in Cavico Mining  -- (8,470)  -- 104,707
Other-than-temporary impairment losses on investments (669,116) (978,880) (669,116) (978,880)
Loss on foreign currency exchange (62,709) (43,083) (31,043) (96,775)
Loss on sale of available-for-sale securities  -- (6,281)  -- (6,281)
Gain on sale of shares interest in subsidiary 341,858 -- 750,838  --
Loss on investment at acquisition/disposal (216,981)   (63,994)  
Interest income 122,623 74,506 153,774 198,585
Interest expense (516,165) (655,162) (1,385,939) (1,724,157)
Total other expense (714,733) (1,557,559) (766,246) (2,386,052)
         
Loss before income taxes and minority interest (1,338,176) (3,084,165) (4,588,904) (2,487,669)
         
Income taxes (expenses) benefit (342,936) 90,888 (765,483) (254,770)
         
Net loss (1,681,112) (2,993,277) (5,354,387) (2,742,439)
         
Net (income) loss attributable to noncontrolling interest (220,060) 389,288 171,228 105,507
         
Net loss attributable to Cavico Corp. $ (1,901,172) $ (2,603,989) $ (5,183,159) $ (2,636,932)
         
Other comprehensive income:        
Unrealized gain on investments available for sale 53,549 1,479,259 30,103 2,427,228
Foreign currency translation adjustment (48,730) (523,861) (1,163,085) (530,968)
         
Comprehensive loss $ (1,676,293) $ (2,037,879) $ (6,487,369) $ (846,179)
Less comprehensive (income) loss attributable to the noncontrolling interest (36,097) 192,498 1,180,858 (328,583)
Comprehensive loss attributable to Cavico Corp $ (1,712,390)  $ (1,845,381) $ (5,306,511)  $ (1,174,762)
         
Per Share Information:        
Weighted average number of common shares outstanding- basic and diluted  3,047,795 3,047,795 3,047,795 3,047,795
         
Net income per common share-basic and diluted $(0.62) $(0.85) $ (1.70) (0.87)
 
 
CAVICO CORP. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
 
    Nine Months Ended September 30,
  2010 2009
Cash Flows From Operating Activities:   (restated)
Net loss $ (5,354,387) $ (2,742,439)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 2,655,978 3,625,823
Changes in provisions 1,067,211 359,290
Gain on sale of fixed assets (392,874) (7,298) 
Other-than-temporary impairment losses on investments 669,116 978,880
Income from investment in Cavico Mining -- (104,707
Gain on sale of shares interest in subsidiary (750,838) --
Loss on investment at acquisition/disposal 63,994 --
Loss on sale of available-for-sale securities -- 6,281
(Gain)loss on foreign currency exchange 31,043 96,775
Changes in assets and liabilities:    
Increase in accounts receivable and other current assets (10,529,311)  (9,805,794)
Increase in inventory (805,465)  (1,190,945) 
Increase in construction work in progress (10,532,964)  (9,683,271) 
(Increase)decrease in other assets 600,886 (130,021)
Increase in advances from customer 2,010,130 4,327,008
Decrease in payable to employees 477,515 (7,459) 
Increase in accounts payables and accrued expenses 8,529,664 8,815,344
Net Cash Used in Operating Activities (12,260,302) (5,462,533) 
     
Cash Flows from Investing Activities:    
Purchase of property, equipment and intangible assets (1,684,553)  (5,251,935) 
Cash acquired in the acquisition of a subsidiary 114,841 --
Purchase of investments in nonconsolidated companies and joint stock company (2,556,409)  (556,127) 
Proceeds from sales of fixed assets 3,279,916 692,037
Proceeds from sale of available-for-sale securities -- 52,511
Proceed from sale of shares interest in subsidiary 3,401,059 --
Proceeds from withdrawals of investments 364,108 67,799
Net Cash Provided By (Used in) Investing Activities 2,918,962 (4,995,715) 
     
Cash Flow From Financing Activities:    
Proceeds from contribution by minority interests 1,450,587 388,533
Dividends paid to minority interest (298,322)  (412,301) 
Proceeds from notes payable 80,326,209 57,068,924)
Proceeds from notes payable - related parties 257,931 34,321
Payments of notes payable (71,286,992)  (48,039,883) 
Payments of notes payable- related parties (122,725)  (51,816) 
Payments of capital leases obligations (517,503)  (22,546) 
Net Cash Provided By Financing Activities 9,809,185 8,965,232
     
Increase (decrease) in Cash 467,845 (1,493,016)
     
Cash at Beginning of period 2,391,316 3,002,239
     
Effect of foreign currency translation (135,522) 119
Cash at End of period $2,723,639 1,509,342
     
Supplemental Cash Flow Information:    
Interest paid $6,127,452 4,247,718
Taxes paid $108,710 27,058
   
  Nine Months Ended September 30,
  2010 2009
Non-Cash  Investing and Financing Activities:  
Assets acquired under capital lease $1,142,970 $ -- 
Non cash changes to assets and liabilities due to the consolidation of subsidiaries previously accounted for as equity method investments;    
Accounts receivable and other current assets $4,230,971 $ -- 
Inventory $496,043 $ -- 
Construction Work in Progress  $10,471,178 $ -- 
Other Assets  $1,067,308 $ -- 
Accounts payable & Accrued expenses  $2,797,233 $ -- 
     
Non cash changes to assets and liabilities due to the consolidation of subsidiaries previously accounted for as cost method investments;    
Accounts receivable and other current assets $282,338 $ -- 
Inventory $30,905 $ -- 
Accounts payable & Accrued expenses  $17,451 $ -- 
 
 
The accompanying condensed notes are an integral part of these consolidated financial statements.
CONTACT:  Cavico Corp.          Timothy Pham, Vice President and Director          +1-714-843-5456          cavicohq@cavico.us                   RedChip Companies, Inc.          Investor Relations Contact:          Dave Gentry          800-733-2447, Ext. 104          407-644-4256, Ext. 104          info@redchip.com