))))))))))))))))) Khò? ?'ò?c quà?, canh bà?c Mỳf (((((((((((((((

thienha777 · 07/04/2008, 23:30

))))))))))))))))) Khò 'òc quà, canh bàc Mỳf (((((((((((((((

Chù Cavico lài thò? lĂn sà?n OTCBB ơ? bĂ?n rĂ?i, nhg cài nà?y thì? hơi khò xơi,ai cò bà?n tiẮng Vi?t cho xin cài hì??

Form 10-K for CAVICO CORP

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28-Mar-2008

Annual Report

ITEM 7. MANAGEMENT''S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Forward-Looking Statements

The information in this report contains forward-looking statements. All statements other than statements of historical fact made in report are forward looking. In particular, the statements herein regarding industry prospects and future results of operations or financial position are forward-looking statements. These forward-looking statements can be identified by the use of words such as "believes," "estimates," "could," "possibly," "probably," anticipates," "projects," "expects," "may," "will," or "should" or other variations or similar words. No assurances can be given that the future results anticipated by the forward-looking statements will be achieved. Forward-looking statements reflect management''s current expectations and are inherently uncertain. Our actual results may differ significantly from management''s expectations.

The following discussion and analysis should be read in conjunction with our financial statements, included herewith. This discussion should not be construed to imply that the results discussed herein will necessarily continue into the future, or that any conclusion reached herein will necessarily be indicative of actual operating results in the future. Such discussion represents only the best present assessment of our management.

Background

Cavico Corp. (the "Company," "Cavico" or "we") was incorporated in Delaware on September 13, 2004 under the name Laminaire Corp. On November 10, 2004, the name of the Company was changed to Agent 155 Media Group, Inc. On May 5, 2006, the Company''s name was changed to Cavico Corp.

During 2007 and 2006, we acquired Cavico Vietnam Joint Stock Company, a corporation organized under the laws of Vietnam ("Cavico Vietnam") as our wholly owned subsidiary. As a result of legal restrictions on the foreign ownership of Vietnamese entities imposed by the Vietnamese government, the acquisition of Cavico Vietnam occurred in multiple steps, as follows:

Â On April 18, 2006, we entered into an asset purchase agreement with Cavico Vietnam. Under the terms of the agreement, Cavico purchased all of the assets of Cavico Vietnam in consideration for the issuance to Cavico Vietnam of 79,000,000 shares of our common stock. Cavico Vietnam subsequently transferred 60,062,200 of these shares to the former shareholders of Cavico Vietnam in return for their shares of Cavico Vietnam stock. An additional 18,937,800 shares were deposited into a Cavico Vietnam bonus plan for that entity''s management, of which 4,937,800 shares were distributed to management in 2006.

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Â Following our purchase of the Cavico Vietnam assets, and pending the grant of the requisite approval of the acquisition of Cavico Vietnam by a Vietnamese government agency as required under Vietnamese law, Cavico Vietnam continued to use the assets subject to our control. Government approval of the acquisition of Cavico Vietnam was granted in January 2007. Following the grant of this approval and our subsequent acquisition of Cavico Vietnam to become our wholly-owned subsidiary, all assets previously purchased from Cavico Vietnam by the Company in April 2006 were transferred back to Cavico Vietnam. Also, at that time, Cavico Vietnam changed its name to Cavico Vietnam Company Limited.

The transaction was accounted for as a reverse acquisition under the purchase method of accounting since the shareholders of Cavico Vietnam obtained control of the consolidated entity. Accordingly, the merger of the two companies is recorded as a recapitalization of Agent 155 Media Group, Inc., with Cavico Vietnam being treated as the continuing entity. The historical financial statements to be presented are those of Cavico Vietnam, our wholly-owned subsidiary.

Critical Accounting Policies

Principles of Consolidation

Our consolidated financial statements include the accounts of our direct and indirect subsidiaries. All significant intercompany accounts and transactions have been eliminated.

Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Such estimates may be materially different from actual financial results. Significant estimates include the recoverability of long-lived assets and the collectibility of accounts receivable.

Cash and Cash Equivalents

For purposes of the statement of cash flows, the Company considers all cash and highly liquid investments with initial maturities of three months or less to be cash equivalents.

Investment in Marketable Securities

Investments with original maturities of less than 90 days are considered cash equivalents, and all other investments are classified as short-term investments.

Inventories

Inventories are stated at the weighted-average method. Market value for raw materials is based on replacement cost and for work-in-process on net realizable value.

Accounts Receivable

We grant credit to customers within Vietnam and do not require collateral. Our ability to collect receivables is affected by economic fluctuations in the geographic areas and industries that we serve. Our main customers were project management units established by Electricity of Vietnam, which accounts for 64.83% of all accounts receivable. Reserves for un-collectable amounts are provided, based on past experience and a specific analysis of the accounts, which management believes are sufficient.

Property and Equipment

Property and equipment, including renewals and betterments, are stated at cost. Assets held under capital leases are recorded at lease inception at the lower of the present value of the minimum lease payments or the fair market value of the related assets. We follow the practice of capitalizing property and equipment purchased over $600. The cost of ordinary maintenance and repairs is charged to operations while renewals and replacements are capitalized. Depreciation and amortization are computed on the straight-line method over the following estimated useful lives of the related assets, which range from two to twenty five years.

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Construction in Progress

Construction in progress is stated at cost, which includes the cost of construction and other direct costs attributable to the construction. No provision for depreciation is made on construction in progress until such time as the relevant assets are completed and put into use. Construction in progress at December 31, 2007, represents land costs, infrastructure and building expenditures.

Long-Lived Assets

Our management assesses the recoverability of its long-lived assets by determining whether the depreciation and amortization of long-lived assets over their remaining lives can be recovered through projected undiscounted future cash flows. The amount of long-lived asset impairment if any, is measured based on fair value and is charged to operations in the period in which long lived assets impairment is determined by management.

Fair Value of Financial Instruments

The carrying amount of cash, cash equivalents, investment securities, notes payable, accounts receivable, accounts payable and accrued expenses are considered to be representative of their respective fair values because of the short-term nature of these financial instruments. The carrying amount of the notes payable and long-term debt are reasonable estimates of fair value as the loans bear interest based on market rates currently available for debt with similar terms.

Revenue Recognition

Revenue from product and services are recognized at the time goods are shipped or services are provided and accepted by the customer, with an appropriate provision for returns and allowances.

We recognize revenues from construction contract, which includes engineering, using the percentage-of-completion method, based primarily on contract costs incurred to date compared with total estimated contracted costs. Customer-furnished materials, labor, and equipment, and in certain cases subcontractor materials, labor, and equipment are included in revenues and cost of revenue when management believes that we are responsible for the ultimate acceptability of the project. Contracts are not segmented between types of services such as engineering and construction, and accordingly, gross margin is recognized under construction services.

Changes to total estimated contract cost or losses, if any, are recognized in the period in which they are determined. Claims against customers are recognized as revenue upon settlement. Revenues are recognized in excess of amounts billed are classified as current assets under contract work-in-progress. Amounts billed to clients in excess of revenues recognized to date are classified as current liabilities under advance billing on contracts.

Other Comprehensive Income

We have adopted Financial Accounting Standards Board Statement No. 130, "Reporting Comprehensive Income" (SFAS 130). SFAS 130 requires reporting and displaying comprehensive income and its components in a full set of general-purpose financial statement.

Foreign Currency Translation

We account for translation of foreign currency in accordance with Statement of Financial Accounting Standards No. 52 "Foreign Currency Translation."

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thienha777 · 07/04/2008, 23:30

CONTINUE............

Results of Operations

Results of Operations for the year ended December 31, 2007 compared to the year ended December 31, 2006.

Revenue

We generated $37,850,606 in revenue during the year ended December 31, 2007 compared to $24,079,427 during the year ended December 31, 2006, mostly from construction and mining projects. Company''s revenue from mining construction decreased by $851,001 or 16% to $4,322,471 for the year ending December 31, 2007 from $5,173,472 for the year ending December 31, 2006. This was due principally to a reduction in mining activity in the Nui beo mine and the redeployment of some of our equipment from that mine to other civil engineering projects
(primarily new hydro power construction projects resulting in higher revenues)
based on the Company''s expectation that the size of that project would decrease at the annual rate of 10% to 20% as stipulated in the agreement with the owner of the mine. The Company''s revenue from civil construction increased by $14,684,284 or 87% to $31,493,768 for the year ending December 31, 2007 from $16,809,484 for the year ending December 31, 2006. This is due to an increase in hydro power construction projects of $9,773,297 and revenue increase from civil construction of Cavico Energy (a new subsidiary) of $4,910,987. The Company''s revenue from other operations (leasing machinery and equipment, selling materials) decreased by $62,104 or 3% to $2,034,367 for the year ending December 31, 2007 from $2,096,471 for the year ending December 31, 2006.

Cost of production

Costs of Goods sold were $30,775,604 and $21,553,726 for the year ended December 31, 2007, and 2006, respectively. Cost of Goods sold includes capitalization of interest expenses of $3,045,638 and $1,200,969 for the year ended December 31, 2007 and 2006, respectively. The increase in capitalization of interest was due to new loans added in 2007.

Cost of Goods sold (without capitalization of interest expenses) increased by $7,377,009 or 36% to $27,729,766 for the year ending December 31, 2007 from $20,352,757 for the year ending December 31, 2006. Cost of Goods sold excluding capitalization of interest expenses as a percentage of sales decreases by 11% to 73% for the year ended December 31, 2007 from 84% of sales for the year ended December 31, 2006.

Company''s cost of production from mining construction for the year ended December 31, 2007 was $2,682,428, of which as a percentage of sales decreased by 26% to 62% for the year ended December 31, 2007 from 88% of sales for the year ended December 31, 2006. Company''s cost of production from civil construction for the year ended December 31, 2007 was $25,578,389, of which as a percentage of sales decreases by 9% to 75% for the year ended December 31, 2007 from 84% of sales for the year ended December 31, 2006. The decrease of cost of production from mining construction and civil construction as a percentage of sales was due to the improvement in efficiency of machinery and equipment. Company''s cost of production from other operations (i.e. leasing machinery and equipment, selling materials) for the year ended December 31, 2007 was $1,468,949, of which as a percentage of sales decreased by 9% to 72% for the year ended December 31, 2007 from 81% for the year ended December 31, 2006.

Gross Profit

The gross profit for the year ended December 31, 2007 was $7,075,001 or 19% of sales compared to $2,525,701 or 10% of sales for the year ended December 31, 2006. The increase in gross profit is due to an increase in sales by $13,771,179 in comparison to increase in cost of goods sold by $9,221,878 as described above.

Operating expenses

The company''s general and administration cost in 2007 was $4,414,382, compared to general and administration cost in 2006 of $2,720,071 with an increase of $1,694,311. The increase in general and administration cost was mainly resulted from our restructure of the whole system from Cavico Corp to the subsidiaries. In which:

ã Rent expenses increased by $144,015 to $364,148 for the year ended December 31, 2007 from $220,133 for the year ended December 31, 2006.

ã Payroll expenses increased by $683,446 to $1,627,870 for the year ended December 31, 2007 from $944,425 for the year ended December 31, 2006.

ã Other administration cost of Cavico Energy (a new subsidiary) of $166,013 was added for the year ended December 31, 2007.

ã Other administration cost of other subsidiaries increased by $400,837 to $1,956,350 for the year ended December 31, 2007 from $1,555,513 for the year ended December 31, 2006.

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We believe that the Company''s restructuring will lead to greater efficiencies in production and management transparency. In addition, it will facilitate raising additional funds in connection with discrete projects, and enhance strategic partnering. We believe that as a result of these greater efficiencies, we will be able to reduce our expenses, which is expected to result in improved results of operations. However, to the extent that the restructuring results in our retaining minority interests in some of the subsidiaries only, the financial results of those subsidiaries may not be included in our results of our operations on a consolidated basis.

Other Income (expenses)

Other income (expenses) increased by $6,931,479 to $7,956,009 for the year ended December 31, 2007 from $1,024,530 for the year ended December 31, 2006. Other income includes gain from disposal of fixed assets and leased machinery of $119,986 for the year ended December 31, 2007 compared to $95,281 in 2006.. Other income also includes gain on sale of marketable securities of $9,684,686 for the year ended December 31, 2007 compared to $2,779,063 in 2006.We sold 1,897,985 shares of common stock of Habubank during the year ended December 31, 2007 and received $7,073,823 with a profit of $5,065,028. We sold shares of common stock of six subsidiaries to reduce the ownership in these entities from 100% to a range of 49% to 72% during the year ended December 31, 2007 and received $8,419,607 with a profit of $3,543,201. We sold 538,370 shares of common stock of Cavico Mining to reduce the ownership in this entity from 50 % to 39% and received $1,563,752 with a profit of $627,533. Income from sales of our investment at other subsidiaries was $448,924. The interest income during the year ended December 31, 2007 was $1,046,394 compared to $975,352 in 2006.

Interest expenses excluding capitalized interest decreased by $306,654 to $2,926,198 for the year ended December 31, 2007 from $3,232,852 for the year ended December 31, 2006.

Net Income

The Company had net income of $6,806,632 for the year ended December 31, 2007, compared to $446,828 for the year ended December 31, 2006. The increase of $6,359,804 was mainly due to the increase of $6,905,623 in gain on sale of marketable securities and increase in income from operation of $2,796,643. The increase in income was reduced by mainly increase in income tax of $2,683,951. The net income per share for the year ended December 31, 2007 was $0.05 compared to $0.01 for the year period ended December 31, 2006.

Liquidity and Capital Resources

As of December 31, 2007, the Company had $1,412,201 in cash, accounts receivable of $22,658,533, an inventory of $28,300,733 and net fixed assets of $24,855,535. Our current accounts receivable was increased by $12,529,601 from the prior year end. Our accounts receivable increase was due to an increase in sales from completed projects and added receivable from Cavico Energy, which was newly acquired in 2007, of $2,765,199. Our inventory for the current year was increased by $10,167,736 from the prior year end. Our inventory increase was due to an increase in work in progress from new projects and inventory of $3,693,322 added from Cavico Energy, a new subsidiary acquired in 2007. The Company''s total current liabilities as of December 31, 2007 were $67,318,832 which was increased by $14,154,272 from the prior year end.., The current liabilities were represented mainly accounts payable of $8,125,390, accrued expenses of $6,349,801, advances from customers of $5,485,539, and short term loans of $37,430,773. The amount of advances from customers was increased mainly due to A Luoi HP project for which we received approximately $5.46 million from the customer. Short-term loans were increased by $5,382,159 from the prior year end. This increase is mainly due to the added loans of $2,894,583 for Cavico Energy. At December 31, 2007, the Company''s current liabilities exceeded current assets by $13,234,397.

Cash flows

The Company used cash of $3,985,229 in operating activities for the year ended December 31, 2007 while generated cash of $1,608,064 from operating activities for the year ended December 31, 2006. The major reasons are slow payments received from customers and increase in inventory to meet demands from construction projects.

In investing activities, the Company used net cash of $5,539,509 for the year ended December 31, 2007 in purchase of property, equipment and investments in other entities. The Company spent $8,641,203 for the purchase of fixed assets, which primary include for the purchase of vehicles, equipment and machinery amounting $9,367,374 and receipt of $726,171 from disposal of fixed assets. Also, the Company''s investments in other entities during the year 2007 increased by $12,054,906 and proceeds from sales of investment were$15,121,687. During the year ended December 31, 2006, the Company used cash of $6,856,555 in investing activities, such as procurement of property and equipment totaling $6,209,451and investment in other entities totaling $3,426,167 and received $2,779,063from sale of investment.

During the year ended December 31, 2007, the Company generated cash flows of $10,181,815 from financing activities, which included $9,116,721 from common shares issued, and $69,658,131 from loan proceeds and repayments for loans of $68,481,879. During the year ended December 31, 2006, the Company generated cash flows of $5,100,702 from financing activities including $42,064,934 in payments of loans and $46,851,772 from loan proceeds.

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The Company generated net income of $6,806,632 and $446,828 for the year ended December 31, 2007 and 2006, respectively.

We intend to meet our liquidity requirements, including capital expenditures related to the purchase of equipment, purchase of materials, and the expansion of our business, through cash flow provided by operations and funds raised through cash investments. We may also use short term loans bank loans to meet our liquidity requirements. There is no assurance, however, that without funds we will ultimately be able to carry out our business.

During 2007, we sold a portion of ownership for some of our subsidiaries to raise funds for expanded operations. We believe that the restructuring of our business and availability of marketable securities is sufficient to meet our immediate operational needs.

Off-Balance Sheet Arrangements

We do not have any off balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity or capital expenditures.

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