This is the Tagline, edited under "Misc Content"
Strong Results Reflect Continued Business Expansion
BEIJING, May 18 /PRNewswire-Asia-FirstCall/ -- Recon Technology, Ltd.
Q3 FY '10 Highlights
-- Revenue increased 111.2% to $3.85 million from $1.82 million in Q3 FY
'09 due to the rapid development of our core business and expansion
into a new market.
-- Gross profit increased 96.5% to $1.72 million for Q3 FY '10 from $0.87
million in Q3 FY '09.
-- Income from operations rose 75.6% to $1.01 million compared with $0.57
million in Q3 FY '09 due to an increase in sales.
-- Net income available for common shareholders was $0.66 million, an
increase of 50.1% from the same period of 2009.
-- Diluted EPS was $0.17, compared to $0.20 per diluted share in Q3 FY '09,
reflecting an increase in shares issued associated with the company's
2009 IPO.
-- Gross margin was 44.7%, compared to 48.0% in Q3 FY '09
-- Weighted average number of diluted shares outstanding was 4 million,
compared to 2.25 million in Q3 FY '09.
First Nine Months FY '10 Highlights
-- Revenue was $14.46 million, an increase of 59.0% over $9.09 million for
the nine months ended March 31, 2009.
-- Gross profit increased 74.4% to $6.26 million vs. $3.59 million for the
same period in 2009
-- Gross margin increased to 43.3% for the nine months ended March 31,
2010 from 39.5% for the nine months ended March 31, 2009.
-- Income from operations was $3.73 million, a gain of 59.8% from $2.33
million for the same period in 2009, primarily attributable to the
increase in sales.
-- Net income available for common shareholders was $2.56 million, an
increase of 42.5% over the first nine months of FY '09.
-- Diluted EPS was $0.68, compared to $0.80 per diluted share for the
first nine months of FY '09, reflecting an increase in shares issued
associated with the company's 2009 IPO.
-- Weighted average number of diluted shares outstanding was 3.76 million,
compared to 2.25 million for the nine months ended March 31, 2009.
Liquidity and Capital Resources
The company's cash balance on March 31, 2010 was approximately $3.26 million. Recon had short-term debt to its internal management team of $1.1 million and no outside or long-term debt. Working capital was $16.6 million. Controlling stockholders' equity totaled $15.5 million. The current ratio was 3.06, up from 1.90 on June 30, 2009. Net cash provided in financing activities totaled $9.0 million for the nine months ended March 31, 2010, which included the debt from the management team to supplement working capital and from the Company's IPO on July 30, 2009.
Management Commentary
Shenping Yin, Recon's Chief Executive Officer, said, "I am very pleased to see continued growth of our business. It is a strong credential of our capability to serve the increasingly sophisticated demand of our clients and to expand to new market area."
"Rising energy demand associated with China's continued economic growth, government initiatives to increase safety and security in the Chinese energy industry and focus by oil and gas field operators for digital operation are all positive indicators for Chinese oil field service providers," commented Mr. Yin.
"I am also happy to see the new 36 Guidelines issued on May 13th by Chinese State Council to expand market access for private investment in the monopolized sectors including upstream oil and gas exploration (Chinese version government document available at http://www.gov.cn/zwgk/2010-05/13/content_1605218.htm ) I believe we are well-positioned to leverage our industry expertise and established business relationships to identify and capitalize on the growth opportunities," concluded Mr. Yin.
The financial statements follow. About Recon Technology, Ltd.
Recon Technology, Ltd is a non-state-owned oil field service company in China. The company provides services designed to automate the extraction of petroleum for Chinese oil and gas fields. The company has developed software and hardware to manage the oil extraction process in real-time. More information may be found at http://www.recon.cn/ or e-mail:
Recon's online investor kit, including an investment profile, press releases, current price quotes, stock charts and more is available at http://www.hawkassociates.com/profile/rcon.cfm. To receive notification of future releases via e-mail, subscribe at http://www.hawkassociates.com/about/alert/ .
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the company with the Securities and Exchange Commission.
All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
For more information, please contact: Investor Contact: In USA Hawk Associates Julie Marshall Frank Hawkins Tel: +1-305-451-1888 Email:recon@hawkassociates.com In China Recon Technology Ltd Peggy Yuan Investor Relations Tel: +86-10-8494-5799 Email:yuan.peggie@gmail.com RECON TECHNOLOGY, LTD CONSOLIDATED STATEMENTS OF BALANCE SHEETS Chinese Yuan (Renminbi) U.S. Dollars June 30, March 31, March 31, 2009 2010 2010 ASSETS (Unaudited) (Unaudited) Current assets Cash and cash equivalents 2,727,735 22,292,927 $3,261,059 Trade accounts receivable, net of allowance for doubtful accounts of RMB604,953 ($88,570) and RMB1,993,588($291,627), respectively 44,103,981 87,749,487 12,836,191 Trade accounts receivable-related parties, net of allowance for doubtful accounts of RMB350,498 ($51,316)and RMB0($0), respectively 7,458,302 -- -- Other receivable, net of allowance for doubtful accounts of RMB1,291,923 ($189,149) and RMB158,968($23,254), respectively 2,048,015 6,565,432 960,406 Other receivable-related parties, net of allowance for doubtful accounts of RMB169,074 ($24,754) and RMB0($0), respectively 507,541 -- -- Purchase advances, net of allowance for doubtful accounts of RMB1,239,234 ($181,435) and RMB654,740($95,777), respectively 5,637,082 38,239,189 5,593,714 Purchase advances-related parties 73,028 -- -- Prepaid expenses 338,072 1,116,579 163,336 Inventories 10,710,018 13,152,071 1,923,914 Deferred offering costs 1,622,048 -- -- Total current assets 75,225,822 169,115,685 24,738,621 Property and equipment, net of accumulated depreciation of RMB1,006,761 ($147,398) and RMB1,085,419($158,778), respectively 1,406,876 1,505,068 220,165 76,632,698 170,620,753 $24,958,785 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities Trade accounts payable 15,601,101 17,582,246 $2,571,970 Trade accounts payable-related parties 189,744 -- -- Other payables 1,767,005 2,607,624 381,449 Other payables-related parties 73,579 -- -- Deferred income 2,361,605 4,184,521 612,121 Advances from customers 910,215 25,650 3,752 Accrued payroll and employees' welfare 393,074 296,635 43,392 Accrued expenses 262,083 293,760 42,972 Taxes payable 9,182,676 18,884,422 2,762,455 Short-term notes payable 3,143,792 3,602,881 527,037 Short-term notes payable-related parties 3,344,377 4,147,657 606,729 Deferred tax liabilities 2,365,225 3,694,658 $540,463 Total current liabilities 39,594,476 55,320,053 8,092,341 Redeemable common stock 1,434,342 -- Equity common stock, $0.0185 U.S. dollar par value, 25,000,000 shares authorized; 2,139,203 and 3,951,811 shares issued and outstanding as of June 30, 2009 and March 31, 2010 300,534 529,637 77,476 Additional paid-in capital 8,732,266 68,734,489 10,054,635 Appropriated retained earnings 1,687,772 3,286,861 480,809 Unappropriated retained earnings 18,043,692 33,720,232 4,932,671 Accumulated other comprehensive income -- (128,902) (18,856) Total controlling shareholders' equity 28,764,264 106,142,317 15,526,736 Non-controlling interest, net of tax 6,839,616 9,158,383 1,339,709 Total equity 35,603,880 115,300,700 16,866,444 Liabilities and Equity 76,632,698 170,620,753 $24,958,785 RECON TECHNOLOGY, LTD CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME Chinese Yuan (Renminbi) For the Nine Months ended March 31, 2010 2009 (Unaudited) (Unaudited) Revenues Hardware 90,932,348 57,656,322 Service 7,675,214 1,495,662 Software 226,496 226,496 Hardware - related parties -- 2,143,590 Software - related parties -- 649,572 Total revenues 98,834,057 62,171,642 Cost of revenues 56,007,688 37,608,500 Gross margin 42,826,369 24,563,142 Selling and distribution expenses 7,557,188 4,760,272 General and administrative expenses 9,803,491 3,867,763 Operating expenses 17,360,679 8,628,035 Income (loss) from operations 25,465,690 15,935,107 Subsidy income 1,178,034 2,038,015 Interest income 5,693 12,608 Interest expense (110,075) (152,405) Other income (expenses) 471,914 -- Income before income taxes and non- controlling interest 27,011,256 17,833,325 Provision for income taxes (7,189,566) (3,481,115) Income from continuing operations 19,821,690 14,352,210 Income from operations of discontinued subsidiaries, net of income taxes -- (442,547) Net income 19,821,690 13,909,663 Non-controlling interest, net of tax (2,318,767) (1,574,687) Accrued dividend for redeemable common stock -- (51,331) Net income available for common shareholders 17,502,923 12,283,645 Basic earnings per share: Income from continuing operations RMB5.28 RMB6.71 Income from discontinued operations RMB-- RMB(0.21) Net income RMB5.28 RMB6.50 Net income available for common shareholders RMB4.66 RMB5.74 Basic weighted average common stock outstanding 3,753,350 2,139,203 Diluted earnings per share: Income from continuing operations RMB5.27 RMB6.37 Income (loss) from discontinued operations RMB-- RMB(0.20) Net income RMB5.27 RMB6.18 Net income available for common shareholders RMB4.65 RMB5.46 Diluted weighted average common stock outstanding 3,763,408 2,251,811 Comprehensive income(loss) Net income 19,821,690 13,858,332 Foreign currency translation adjustment 119,992 -- Comprehensive income (loss) 19,941,682 13,858,332 Comprehensive income (loss) attributable to non-controlling interest 2,330,766 1,574,687 Comprehensive income (loss) attributable to common shareholders 17,610,916 12,283,645 Chinese Yuan (Renminbi) U.S. Dollars For the Three Months For the Nine ended Months ended March 31, March 31, 2010 2009 2010 (Unaudited) (Unaudited) (Unaudited) Revenues Hardware 24,578,963 12,124,602 $13,301,787 Service 1,709,402 95,662 1,122,747 Software -- 226,495 33,132 Hardware - related parties -- -- -- Software - related parties -- -- -- Total revenues 26,288,365 12,446,759 14,457,667 Cost of revenues 14,538,530 6,467,134 8,192,930 Gross margin 11,749,835 5,979,625 6,264,737 Selling and distribution expenses 1,534,090 1,422,598 1,105,482 General and administrative expenses 3,337,591 640,148 1,434,077 Operating expenses 4,871,681 2,062,746 2,539,559 Income (loss) from operations 6,878,153 3,916,878 3,725,178 Subsidy income 20,000 373,400 172,325 Interest income (79) 683 833 Interest expense (32,762) (92,376) (16,102) Other income (expenses) 389,668 (38,167) 69,033 Income before income taxes and non- controlling interest 7,254,979 4,160,419 3,951,267 Provision for income taxes (2,082,801) (230,006) (1,051,706) Income from continuing operations 5,172,178 3,930,413 2,899,561 Income from operations of discontinued subsidiaries, net of income taxes -- (442,547) - Net income 5,172,178 3,487,866 2,899,561 Non-controlling interest, net of tax (647,827) (456,265) (339,194) Accrued dividend for redeemable common stock -- (17,044) -- Net income available for common shareholders 4,524,351 3,014,557 $2,560,367 Basic earnings per share: Income from continuing operations RMB1.31 RMB1.84 $0.77 Income from discontinued operations RMB-- RMB(0.21) $-- Net income RMB1.31 RMB1.63 $0.77 Net income available for common shareholders RMB1.14 RMB1.41 $0.68 Basic weighted average common stock outstanding 3,951,811 2,139,203 3,753,350 Diluted earnings per share: Income from continuing operations RMB1.29 RMB1.75 $0.77 Income (loss) from discontinued operations RMB-- RMB(0.20) $-- Net income RMB1.29 RMB1.55 $0.77 Net income available for common shareholders RMB1.13 RMB1.34 $0.68 Diluted weighted average common stock outstanding 4,002,298 2,251,811 3,763,408 Comprehensive income(loss) Net income 5,172,178 3,470,822 2,899,561 Foreign currency translation adjustment 119,992 -- 17,553 Comprehensive income (loss) 5,292,170 3,470,822 $2,917,114 Comprehensive income (loss) attributable to non-controlling interest 659,826 456,265 340,950 Comprehensive income (loss) attributable to common shareholders 4,632,344 3,014,557 $2,576,164 RECON TECHNOLOGY, LTD. CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine For the Nine Months ended Months ended March 31, March 31, 2009 2010 Chinese Yuan Chinese Yuan U.S. Dollars (Renminbi) (Renminbi) Cash flows from operating activities: (Unaudited) (Unaudited) (Unaudited) Net income (loss) available for common shareholders 19,821,690 14,352,210 $2,899,561 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 263,036 248,401 38,477 Share-based compensation expenses 1,178,701 -- 172,423 Accrued dividend for redeemable common stock -- 51,331 -- Movement of deferred taxation 1,329,433 -- 194,472 Changes in operating assets and liabilities: -- Trade accounts receivable, net (43,645,506) (20,455,176) (6,384,562) Trade accounts receivable-related parties, net 7,458,302 (1,630,676) 1,091,017 Other receivable, net (4,517,417) (501,661) (660,818) Other receivable related parties, net 507,541 117,794 74,244 Purchase advance, net (33,963,030) (134,115) (4,968,188) Prepaid expense (778,507) (354,169) (113,882) Inventories (2,442,053) 1,441,121 (357,229) Trade accounts payable 1,981,145 3,528,582 289,806 Trade accounts payable-related parties (189,744) (965,826) (27,756) Other payables 840,619 (1,767,525) 122,968 Other payables-related parties 73,579 (1,337,918) 10,763 Deferred income 1,822,916 (1,508,896) 266,660 Advances from customers (884,565) 107,345 (129,396) Accrued payroll (96,439) -- (14,107) Accrued employees' welfare -- (81,921) -- Accrued expense 31,677 (18,333) 4,634 Taxes payable 9,701,746 6,044,796 1,419,193 Net cash (used in) provided by operating activities (41,506,877) (2,864,636) $(6,071,719) Cash flows from investing activities: Purchases of property and equipment (371,162) (781,397) (54,294) Proceeds from sale of property and equipment 320 -- 47 Cash paid from short-term notes receivable -- (1,356,496) -- Net cash used in investing activities (370,842) (2,137,893) $(54,248) Cash flows from financing activities: Proceeds from stock issuance 60,209,057 -- 8,807,516 Proceeds from short-term notes payable 459,089 1,831,655 67,157 Proceeds from short-term notes payable-related party 803,280 184,377 117,506 Net cash (used in) provided by financing activities 61,471,426 2,016,032 $8,992,178 Effect of exchange rate fluctuation on cash and cash equivalent (28,514) -- (4,171) Net change in cash 19,565,192 (3,037,828) $2,862,040 Cash and cash equivalents at beginning of period 2,727,735 7,637,421 399,019 Cash and cash equivalents at end of period 22,292,927 4,599,593 $3,261,059 Supplemental cash flow information Cash paid during the period for interest -- -- -- Cash paid during the period for taxes 98,834 323,340 14,458
SOURCE: Recon Technology, Ltd.
CONTACT: Investor Contact: In USA: Julie Marshall or Frank Hawkins,
+1-305-451-1888,
Peggy Yuan, Investor Relations, +86-10-8494-5799,
Recon Technology Ltd