Cavico Reports Third Quarter Fiscal 2009 Results

http://www.businesswire.com/news/home/20091116006904/en

Backlog Increases to $290.3 Million at September 30, 2009
HANOI, Vietnam--(Business Wire)--
Cavico Corp. (NASDAQ: CAVO), a leading infrastructure development company based
in Vietnam, today reported its financial results for the third quarter ended,
September 30, 2009.

Total revenues grew 17.0% to $17.2 million in third quarter, from $14.7 million
in the third quarter of fiscal 2008. The increase in third quarter total
revenues was primarily the result of increased revenue in Civil Construction,
which accounted for 87.0% of total revenues and Commercial Activities. On a
sequential basis, total revenue increased 23.7% from $13.9 million reported in
the second quarter of fiscal 2009.

"As Vietnam`s largest engineering and construction contractor with a national
presence servicing almost exclusively public sector clients, our third quarter
results reflects the continuing rebound in the country`s economy after last
year`s global recession," said Mr. Ha Quang Bui, chairman and chief executive
officer of Cavico Corp. "We are pleased with our robust top-line growth,
benefiting from the progress of our Civil Construction projects involving
tunnels, ports and highways. The construction boom in Vietnam was in response to
the government stimulus. Also, the country`s soaring car ownership has spurred
the need for better infrastructure. According to a recent research report by
Credit Suisse, Vietnam`s GDP is forecast to grow 5.3% this year and 8.5% in
2010, after averaging around 7.5% each year for the past decade."

Mr. Bui continued, "Against this favorable macro economic backdrop, Cavico is
well positioned with our long history of operations in civil projects and our
recent foray into mining and power plant construction. On September 18, Cavico
became the first Vietnamese company listed on a U.S. national securities
exchange. With a presence on the NASDAQ Capital Market, we are able to gain much
more visibility among growth-oriented emerging market investors around the
world. We will continue to improve corporate governance and our transparency and
focus on creating long-term value for shareholders."

Three Months Fiscal 2009 Results

Revenues (in thousand US$)

Three Months Ended
September, 30
2009 2008 % Change
Civil Construction $14,911 $13,219 13%
Mining Construction $821 $852 -4%
Commercial Activities $1,477 $644 129%
Total Revenues $17,210 $14,715 17%

Revenues for the Civil Construction segment increased by 13.0% to $14.9 million
during the third quarter of 2009, compared with $13.2 million in the same period
in fiscal 2008. The increase in the Civil Construction segment was mainly due to
new tunnel and dam projects coming online, such as Ta Trach, Dambri, Ngan Truoi
and HuaNa, as the Company continues to recognize revenue from these projects
based on progress completion basis. In addition, one mature project, the A Luoi
Tunnel project, contributed $2.5 million to the overall Civil Construction
revenues. Revenues from the Mining Construction segment decreased slightly by
4.0% to $821,093 during the third quarter of fiscal 2009 compared to $851,672 in
the same period in 2008. This slight decrease was due to a reduction in mining
activity at the Nui Beo Mine as the projects are coming close to completion and,
as a result, the Company redeployed some of its equipment to other civil
engineering projects, primarily new hydro power construction projects. Revenues
from Commercial Activities (leasing machinery and equipment, selling materials,
steel fabrication) increased $832,729, or 129.3% to $1.5 million during the
third quarter of fiscal 2009 versus $644,162 for the same period in 2008. This
was primarily a result of rising demand for construction materials as Vietnam`s
economy began its recovery from last year`s global recession.

Gross profit decreased to $1.3 million in the third quarter of fiscal 2009, or
7.5% of revenue versus gross profit of $1.6 million, or 10.6% of total revenues
for the same period of 2008. The decrease in gross profit was primarily due to a
lower rate of increase in net sales than the increase in cost of goods sold.

Operating expenses increased $954,000 to $2.7 million in the third quarter of
fiscal 2009 compared to $1.7 million reported in the same period of fiscal 2008.
The increase in operating expenses was due primarily to administrative expenses
associated with the corporate office and professional fees required to establish
Cavico`s status as a listed company. In addition, the Company recorded bad debt
expense of $250,386 which was a result of an increase in the reserve for
accounts receivable and work in progress. The Company continues to work
diligently to implement cost control measures.

In the third quarter of 2009, the Company recognized a non-cash charge for an
other-than-temporary loss on marketable securities of $978,880, compared to none
in the same period of 2008. The Company recognized losses on available-for-sale
securities for Habubank and Providential Holdings Inc. as their reduced values
were determined as other than temporary.

Net loss for the third quarter of fiscal 2009 was $2.6 million, or ($0.85) per
share, versus a net income of $148,984, or $0.05 per share, in the same quarter
a year ago. In 2008, the Company recorded a tax benefit of $1.8 million compared
to $86,285 in tax benefits in the third quarter of 2009.

Nine Months Fiscal 2009 Results

For the nine months ended, September 30, 2009, total revenues were $43.3
million, an increase of $854,426 from consolidated revenues of $42.5 million for
the same period of fiscal 2008.

Revenues for the Civil Construction segment for the nine months decreased to
$37.4 million versus $37.6 million same period in fiscal 2008. The slight
decrease in Civil Construction revenue was caused by our new contracts started
in early 2009. In the early stages of projects, the revenues are normally lower
due to the preparation of projects such as roads, infrastructure and building of
employee housing. Revenues from the Mining Construction segment for the nine
months decreased to $2.8 million from $3.0 million compared to the same period
in 2008. The decrease in the mining construction segment was mainly due to
reduction in mining activities at Nui Beo Mine and the redeployment of equipment
to other projects. Revenues from Commercial Activities (leasing machinery and
equipment, selling materials, steel fabrication) increased by $1.2 million, or
67% to $3.1 million during the nine months of fiscal 2009 compared to $1.8
million recorded during the same period in 2008. The increase was primarily a
result of rising demand of construction materials as Vietnam`s economy began its
recovery from last year`s global recession.

Gross profit for the nine months was relatively the same at $7.2 million
compared to the nine months of fiscal 2008. The slight decrease in gross profit
was primarily due to a lower rate of increase in net sales compared to a higher
increase in cost of goods sold.

Operating expenses increased by $1.4 million to $6.3 million for the nine months
of fiscal 2009 compared to $4.9 million reported in the same period of fiscal
2008. The increase in operating expenses was due primarily to administrative
costs with the corporate office and professional fees related to audit, legal,
consulting services. In addition, the Company recorded a bad debt expense of
$359,290 which was a result of an increase in the reserve for account receivable
and work in progress.

Net loss attributable to Cavico Corp. for the first nine months of 2009 was $2.3
million, or ($0.75) per share, versus a net income of $745,098, or $0.26 per
share, in the same period of 2008. For the nine months ended September 30, 2008,
the Company recorded a tax benefit of $1.1 million compared to a tax expense of
$335,605 for the same period in 2009.

In the nine month period ended September 30, 2009, the Company recognized a
non-cash charge for other-than-temporary loss on marketable securities of
$978,880, compared to none in the same period of 2008. The Company recognized
losses on available-for-sale securities for Habubank and Providential Holdings
Inc. as their reduced values were determined as other than temporary.

Financial Position

During the third quarter of 2009, the Company`s cash balance was $1.6 million at
September 30, 2009 compared to $3.8 million at June 30, 2009, with accounts
receivable of $11.6 million and construction work in progress of $35.9 million.
Total current liabilities were $95.5 million, which included advances from our
customers of $9.2 million. As of September 30, 2009, total shareholders` equity
$18.8 million.

Summary of Contract Wins During Third Quarter

During the third quarter of fiscal 2009, Cavico announced the following
contracts wins:

* Cavico Transport signed a $2.8 million contract with Dakdrinh Hydropower for
stone stripping and processing and bridge construction;
* Cavico Transport signed additional scope of work contract with Dakdrinh
Hydropower Plant valued at $12 million;
* Cavico Transport signed a $16 million contract to construct a tunnel for
Dakdrinh Hydropower; and
* Cavico awarded a service road and tunnel construction contract at Thuong Kon
Tun Hydropower Plant. Expected revenue value of contact is $12 million. The 16
kilometer long tunnel will make this the longest tunnel ever constructed in
Vietnam.

Backlog and Business Outlook

Backlog as of September 30, 2009 was $290.3 million compared to $265.3 million
at the end of the second fiscal quarter. The backlog figure is based as of the
end of the second quarter backlog minus work completed plus new contracts signed
during the third quarter. Cavico expects that it will provide periodic updates
when additional major contracts are confirmed.

Mr. Bui concluded, "The Vietnamese government is expected to put more electric
power plants into operation at a faster pace in the near future. As one of
Vietnam`s leading contracting and construction companies, Cavico expects to
bring more major civil construction contracts into our pipeline while actively
pursuing business opportunities in capital equipment leasing and steel
fabrication, which are currently our fastest-growing segments currently as a
result of Vietnam`s soaring demand for construction materials. We look forward
to updating our shareholders with any new contract wins which will be added to
our backlog."

Conference Call Details

Cavico Corp. will host a conference call with Mr. Hung Manh Tran, vice president
and director; Ms. June Kim, chief financial officer and Mr. Timothy D. Phan,
vice president and director. The call will take place at 9:00 am (Eastern) on
Tuesday, November 17, 2009.

Interested parties may participate in the conference call by dialing
877-407-9210 (in the U.S. or Canada) or +1-201-689-8049 (international). The
conference call will also be simultaneously broadcast live over the Internet at
www.cavicocorp.com or www.vcall.com.

Please allow extra time prior to the call to visit the site and download the
streaming media software required to listen to the Internet broadcast. The
online archive of the broadcast will be available within one hour of completion
of the live call.

The online archive of the Web cast will be available shortly after the
conference call, or investors can listen to the replay by dialing 877-660-6853
(in the U.S. or Canada) or +1-201-612-7415 (international) and entering account
number 286 and conference ID number 337972. Please allow for some time post
conference call to access the archive of the Web cast.

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 3,000 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 3,000 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 servicesin 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, 2009 December 31, 2008
ASSETS

Current Assets:
Cash $ 1,625,395 $ 3,148,985
Investments, available for sale 3,789,923 1,820,406
Accounts receivable -trade- net 11,632,833 9,184,339
Receivable - other 12,682,360 7,491,803
Inventory 5,604,804 3,940,768
Construction work in process 35,861,724 23,915,865
Receivables and advances from related parties 467,300 1,088,596
Other current assets 2,842,176 1,602,272
Total current assets 74,506,515 52,193,034

Fixed Assets:
Land and building development costs 9,811,074 8,925,718
Temporary housing assets 572,389 548,642
Machinery and equipment 29,692,248 26,411,441
Vehicles 12,798,025 12,211,356
Office and computer equipment 833,787 780,756
53,707,523 48,877,913
Less accumulated depreciation (20,781,050 ) (16,973,105 )
Net fixed assets 32,926,473 31,904,808

Intangible Assets:
Goodwill 855,242 855,947
Licenses - net 278,645 301,885
Net Intangible Assets 1,133,887 1,157,832

Other Non Current Assets:
Investments, non-consolidated companies & JVs 2,900,152 3,065,516
Long-term retention receivables 15,409,574 14,933,897
Prepaid expenses 2,434,956 2,530,944
Long-term work in process 5,999,214 6,238,430
Other assets 1,006,954 763,604
Total other assets 27,750,850 27,532,391

TOTAL ASSETS $ 136,317,725 $ 112,788,065

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:
Accounts payable $ 17,467,160 $ 10,214,130
Accounts payable - related parties 18,079 20,520
Accrued expenses 5,842,641 4,485,336
Advances from customers 9,226,225 4,449,338
Payable to employees 4,059,880 4,220,124
Notes payable - current 58,512,385 50,141,069
Notes payable - related parties 211,394 208,667
Current portion of capital lease obligations 139,139 112,617
Total current liabilities 95,476,903 73,851,801

Long-Term Debt:
Long-term advances from customers 10,759,690 10,652,993
Capital lease obligations - long-term 800,948 269,307
Long-term debt 10,497,367 9,240,394
Total long-term debt 22,058,005 20,162,694

TOTAL LIABILITIES 117,534,908 94,014,495

Commitments and Contingencies - -

Stockholders' Equity:
Preferred stock:$.001 par value - Class B, 100,000,000 authorized, none issued and outstanding - -
Common stock: $.001 par value; 300,000,000 shares authorized; 3,274,942 shares issued, 3,047,795 shares outstanding 3,048 3,048
Additional paid-in capital 13,619,865 13,619,865
Accumulated deficit (8,847,698 ) (6,547,740 )
Accumulated other comprehensive loss (1,897,441 ) (3,864,303 )
Total Cavico Corp. stockholders` equity 2,877,774 3,210,870
Noncontrolling interest 15,905,043 15,562,700
Total stockholders' equity 18,782,817 18,773,570

TOTAL LIABILITIES AND STOCKHOLDERS` EQUITY $ 136,317,725 $ 112,788,065

CAVICO CORP. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

(Unaudited)
Three Months Ended September 30, Nine Months Ended September 30,

2009 2008 2009 2008
Revenues:
Civil construction $ 14,911,691 $ 13,219,147 $ 37,412,980 $ 37,641,074
Mining construction 821,093 851,672 2,833,340 2,983,315
Commercial activities 1,476,891 644,162 3,072,216 1,839,721
Total revenue 17,209,675 14,714,981 43,318,536 42,464,110

Cost of Goods Sold:
Civil construction 14,036,497 11,895,308 31,321,835 31,500,800
Mining construction 661,681 682,653 2,254,405 2,382,433
Commercial activities 1,217,708 582,861 2,570,925 1,375,411
Total cost of goods sold 15,915,886 13,160,822 36,147,165 35,258,644

Gross Profit 1,293,789 1,554,159 7,171,371 7,205,466

Operating Expenses:
Selling expenses 329,863 9,425 499,064 49,666
Bad debt 250,386 - 359,290 -
General & administrative expenses 2,114,334 1,731,260 5,410,591 4,820,348
Total operating expenses 2,694,583 1,740,685 6,268,945 4,870,014

Total income from operations (1,400,794 ) (186,526 ) 902,426 2,335,452

Other income (expenses):
Gain on disposal of assets (904 ) 3,198 15,988 53,528
Other income(expense) 60,712 (2,739 ) 107,575 (9,293 )
Loss on foreign currency exchange (43,083 ) - (96,775 ) -
Gain(loss) on sale of marketable securities 1,286 (380,818 ) 1,286 (380,818 )
Other-than-temporary impairment losses on available-for-sale securities (978,880 ) - (978,880 ) -
Loss on sale of investment (7,567 ) - (7,567 ) -
Interest income 90,655 232,430 320,905 661,183
Interest expense (692,826 ) (1,162,800 ) (1,857,361 ) (2,133,179 )
Total other income (expense) (1,570,607 ) (1,310,729 ) (2,494,829 ) (1,808,579 )

Income (loss) before income taxes and minority interest (2,971,401 ) (1,497,255 ) (1,592,403 ) 526,873

Income taxes (expenses)benefit 86,285 1,758,591 (335,605 ) 1,115,489

Net income (2,885,116 ) 261,336 (1,928,008 ) 1,642,362

Less net income attributable to noncontrolling interest 281,126 (112,352 ) (371,950 ) (897,264 )

Net income attributable to Cavico Corp. $ (2,603,990 ) $ 148,984 $ (2,299,958 ) $ 745,098

Other comprehensive income:
Unrealized gain(loss) on investments available for sale 1,255,044 610,097 2,530,812 (3,561,896 )
Foreign currency translation adjustment (561,722 ) 2,438 (443,625 ) (300,086 )
Comprehensive income (loss) $ (2,191,794 ) $ 873,871 $ 159,179 $ (2,219,620 )
Less comprehensive income(loss) attributable to the noncontrolling interest 300,062 (112,352 ) (973,277 ) (897,264 )
Comprehensive income(loss) attributable to Cavico Corp $ (1,891,732 ) $ 761,519 (814,098 ) (3,116,884 )

Per Share Information:

Weighted average number of common shares outstanding -basic and diluted 3,047,795 2,921,105 3,047,795 2,920,075
Net income per common share-basic and diluted $ (0.85 ) 0.05 $ (0.75 ) 0.26

CAVICO CORP. AND SUBSIDIARIES

Consolidated Statements of Cash Flows

(Unaudited)

Nine Months Ended September 30,
2009 2008
Cash Flows From Operating Activities:
Net income(loss) $ (1,928,008 ) $ 1,642,362
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization 4,492,175 4,480,824
Changes in provisions 359,290 -
Gain on sale of fixed assets (15,988 ) (53,528 )
Loss on foreign currency exchange 96,775 -
(Gain)loss on sale of marketable securities (1,286 ) 380,818
Other-than-temporary impairment losses on available-for-sale securities 978,880 -
Loss on sale of investment 7,567 -
Stock issued for services - 84,750
Changes in assets and liabilities:
Increase in accounts receivable and other current assets (10,155,784 ) (8,785,717 )
Increase in inventory (1,509,833 ) (767,657 )
Increase in construction work in progress (11,932,052 ) (1,764,566 )
Decrease in other assets 93,536 142,566
Increase in advances from customer 4,709,627 2,763,499
Increase (decrease) in payable to employees (157,044 ) 1,060,457
Increase in accounts payables and accrued expenses 8,747,674 (1,008,711 )
Net Cash Used in Operating Activities (6,214,471 ) (1,824,903 )

Cash Flows from Investing Activities:
Purchase of property , equipment and intangible assets (5,638,432 ) (9,262,159 )
Purchase of investments in nonconsolidated companies and joint venture (431,614 ) (2,919,505 )
Proceed from sale of available-for-sale securities 55,229 2,466,748
Proceeds from withdrawals of investments 65,080 180,311
Proceeds from sales of fixed assets 725,726 798,931
Net Cash Used in Investing Activities (5,224,011 ) (8,735,674 )

Cash Flow From Financing Activities:
Proceeds from contribution by minority interests 625,575 2,969,384
Payments of dividend to minority interest (775,507 ) (277,329 )
Proceeds from notes payable 63,862,905 51,789,341
Proceeds from notes payable - related parties 57,903 1,578,229
Payments of notes payable (53,770,243 ) (43,909,546 )
Payments of notes payable- related parties (55,003 ) (1,090,819 )
Payments of capital leases obligations (30,788 ) (38,733 )
Net Cash Provided By Financing Activities 9,914,842 11,020,527

Increase(decrease) in Cash (1,523,640 ) 459,950

Cash at Beginning of period 3,148,985 1,412,201
Effect of foreign currency translation 50 (47,670 )

Cash at End of period $ 1,625,395 $ 1,824,481

Supplemental Cash Flow Information:
Interest paid $ 4,586,705 $ 2,588,659
Taxes paid $ 47,924 $ 48,586

Cavico Corp.
Timothy Pham, +1-714-843-5456
Vice President and Director
cavicohq@cavico.us
or
Grayling
+1-646-284-9400
Investor Relations
Trúc Nguyen, Managing Director (ext. 418)
truc.nguyen@us.grayling.com -or-
Christopher Chu, Director (ext. 426)
christopher.chu@us.grayling.com
Media Relations
Ivette Almeida, Managing Director (ext. 455)
ivette.almeida@us.grayling.com

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