CY provides update on Production Volume at Tengzhou Plant

04 Apr '08

3 min read

CY Oriental Holdings Ltd, a value-added supplier of apparel and fashion products to leading international brands and retailers, reports preliminary financial data for the fourth quarter and fiscal year, 2007. The preliminary financial data has been approved by management and has been reviewed by the Audit Committee of the Company.

The Company reports that its days sales outstanding (DSO) increased to 200 days as at December 31, 2007. For comparison purposes, the Company's DSO was 180 days as at the end of the third quarter of fiscal 2007 and 152 days at December 31, 2006.

The increase in DSO is mainly attributable to higher receivable balances for the Company's two largest customers. CY Oriental has since negotiated and implemented a payment schedule with one of these significant customers that, if satisfied, will fully retire the overdue portion of the account receivable outstanding by the end of fiscal 2008.

The first payment under the payment schedule amounting to US$500,000 was received in March 2008. As the account receivable from this customer had been assigned to a finance company for working capital purposes, the Company has negotiated and is finalizing an agreement with the finance company to accommodate the revised repayment schedule with this significant customer.

In addition, certain new sales to the other significant customer are supported by letters of credit rather than on an open account basis. Arising from the Company's ongoing review of its accounts receivable, CY Oriental has made an allowance for doubtful accounts in the amount of $2.0 million as at December 31, 2007.

More CY Oriental Holdings Ltd News... More Fashion News - Canada...