BEIJING, May 13, 2013 /PRNewswire-FirstCall/ -- Recon Technology, Ltd. (Nasdaq: RCON) ("Recon" or the "Company"), a Chinese non-state-owned oilfield services provider to oil and gas companies and their affiliates, today reported results for its third quarter of fiscal 2013 ended March 31, 2013.
Nine Month Financial Highlights
-- Total revenue for the nine months ended March 31, 2013 increased 28% to
RMB 62.5 million ($10.0 million).
-- Gross profit for the nine months ended March 31, 2013 increased 16% to
RMB 20.6 million ($3.3 million).
-- Operating profit was RMB1.2 million ($0.2 million), up 214.6% compared
to an operating loss of RMB1.0 million for the nine months ended March
31, 2012.
-- Net profit attributable to ordinary shareholders for the nine months
ended March 31, 2013 was RMB 1.7 million ($0.3 million), or RMB 0.43
($0.07) per diluted share, as compared to net loss attributable to
ordinary shareholders for the same period of FY2012 of RMB 2.0 million,
or a loss of RMB 0.48 per diluted share.
Q3 FY2013 Financial Highlights
-- Total revenue for the third quarter of FY2013 was RMB7.5 million ($1.2
million), a decrease of 42.4% from the same period of FY2012.
-- Gross margin increased to 55.4% for the third quarter of FY2013 from
47.9% for the same period of FY2012.
-- Net loss attributable to ordinary shareholders for the third quarter of
FY2013 was RMB1.2 million ($0.2 million), or RMB0.32 ($0.05) per diluted
share. Net income attributable to ordinary shareholders for the same
period of FY2012 was RMB0.1 million or RMB0.03 per diluted share.
"Year to date in FY2013, our operating efficiency has continued to improve, which is reflected in our overall financial performance," said Mr. Yin Shenping, CEO of Recon. "The temporary revenue decline in the third quarter was mainly due to timing issues related to current project completion status, rather than any changes in business fundamentals. As we complete outstanding projects, and assuming we obtain new contracts for our fracturing services and furnace business, we anticipate the coming quarters will reflect what we believe are positive results for our company."
Mr. Yin continued, "Since our IPO in 2009, we have successfully expanded our market penetration, including in the Sichuan Oilfield, Zhongyuan Oilfield and Jilin Oilfield. Our fracturing services were recently qualified at Sinopec, which gives us the opportunity to continue to expand this new service line beyond Sinopec's affiliate, Zhongyuan Oilfield. As we continue to capitalize on our position in China's fragmented oil services industry and broaden our integrated products and service offerings through R&D and collaboration with Chinese and international companies involved in the oilfield services industry, we believe Recon is well-positioned to continue to grow."
Q3 FY2013 Financial Results
Total revenue for the third quarter of FY2013 decreased by 42.4% to RMB7.5 million ($1.2 million) from RMB13.0 million for the same period of FY2012. The decline in revenue was mainly attributable to lower sales of automation equipment and service business as a result of unfinished projects.
Gross profit decreased to RMB4.2 million ($0.7 million) for the third quarter of FY2013, down 33.3% from the same period of FY2012. Gross margin increased to 55.4% for the third quarter of FY2013 from 47.9% for the same period of FY2012. This was mainly because software sales, which have higher gross margin, accounted for a higher percentage of total revenue during the third quarter of FY2013 compared to the same period in FY2012.
Selling and distribution expenses increased by 40.6% to RMB1.8 million ($0.3 million) for the third quarter of FY2013 from RMB1.3 million for the same period of FY2012. This increase was primarily due to increased business travelling expenses, bidding maintenance expenses. General and administrative expenses decreased by 5.4% to RMB4.0 million ($0.6 million) for the third quarter of FY2013 from RMB4.2 million for the same period of FY2012. Research and development expenses decreased by 16.6% to RMB0.6 million ($0.1 million) for the third quarter of FY2013 from RMB0.7 million for the same period of FY2012.
Loss from operations was RMB2.2 million ($0.3 million) for the third quarter of FY2013, compared to an income of RMB0.1 million for the same period of FY2012. This decrease in income from operations is attributed to the decrease in revenue and increase in SG&A expenses as a percentage of revenue.
Net loss attributable to ordinary shareholders was RMB1.2 million ($0.2 million) for the third quarter of FY2013 versus net income of RMB0.1 million for the same period of FY2012. Diluted loss per share was RMB0.32 ($0.05) for the third quarter of FY2013, compared to diluted earnings per share of RMB0.03 ($0.005) for the same period of FY2012.
Adjusted EBITDA was (RMB0.1) million for the third quarter of FY2013, compared to RMB1.0 million for the same period of FY2012.
For the Three Months Ended
March 31,
---------
Reconciliation of Adjusted EBITDA 2012 2013 2013
to Net Income (Loss) RMB RMB USD
--- --- ---
Net income (loss) RMB 259,106 RMB (1,248,860) $(198,812)
Provision for income taxes 132,883 (152,382) (24,258)
Interest expense 225,718 618,473 98,458
Stock compensation expense 259,164 451,572 71,888
Depreciation, amortization and accretion 86,685 395,535 62,967
------ ------- ------
Adjusted EBITDA RMB 954,305 RMB 64,338 $10,243
======= ====== =======
As of March 31, 2013, cash and cash equivalents were RMB6.5 million ($1 million). Cash and cash equivalents consist of cash on hand, demand deposits and highly liquid short-term debt investments with stated maturities of no more than six months.
Year-to-Date FY2013 Financial Results
Total revenue for the nine months ended March 31, 2013 increased by 28.1% to RMB62.5 million ($10.0 million) from RMB48.8 million for the same period of FY2012, primarily driven by increased sales from the Hardware business as well as the Fracturing Service business.
Gross profit increased to RMB20.6 million ($3.3 million) for the nine months ended March 31, 2013, up 15.7% from the same period of FY2012. Gross margin decreased to 33.0% for the nine months ended March 31, 2013 from 36.5% for the same period of FY 2012. This was mainly related to margin contraction in our furnace business as a result of higher material and labor costs.
Selling and distribution expenses increased by 32.7% to RMB4.7 million ($0.7 million) for the nine months ended March 31, 2013 from RMB3.5 million for the same period FY 2012. This increase was primarily due to increased shipping costs and maintenance expenses. General and administrative expenses decreased by 15.5% to RMB8.5 million ($1.3 million) for the nine months ended March 31, 2013 from RMB10.0 million for the same period FY 2012. Research and development expenses were RMB6.3 million ($1 million) for the nine months ended March 31, 2013, up 18.2% from the same period of FY2012. Overall, operating expenses were RMB19.4 million ($3.1 million) for the nine months ended March 31, 2013, up 3.0% from the same period of FY2012.
Income from operations was RMB1.2 million ($0.2 million) for the nine months ended March 31, 2013, compared to a loss of RMB1.0 million for the same period of FY2012. This increase in income from operations can be attributed primarily to an increase in total revenue and decrease in general and administrative expenses as a percentage of total revenue.
Net income attributable to ordinary shareholders was RMB1.7 million ($0.3 million) for the nine months ended March 31, 2013, an improvement of RMB3.6 million from net loss of RMB1.9 million for the same period of FY2012. Diluted earnings per share was RMB0.43 ($0.07) for the nine months ended March 31, 2013, compared to diluted loss per share of RMB0.48 for the same period of FY2012.
Adjusted EBITDA was RMB5.9 million ($0.9 million) for the nine months ended March 31, 2013, 1,750.7% increased compared to RMB0.3 million for the same period of FY2012.
For the Nine Months Ended
March 31,
---------
Reconciliation of Adjusted EBITDA 2012 2013 2013
to Net Income (Loss) RMB RMB USD
--- --- ---
Net income (loss) RMB (1,564,708) RMB 2,300,423 $366,218
Provision for income taxes 345,964 302,550 48,164
Interest expense 502,013 1,494,887 237,979
Stock compensation expense 784,010 1,358,726 216,303
Depreciation, amortization and accretion 252,842 467,914 74,490
------- ------- ------
Adjusted EBITDA RMB 320,121 RMB 5,924,500 $943,154
======= ========= ========
For the nine months ended March 31, 2012, net cash provided by operating activities was RMB17.3 million ($2.8 million). This was an increase of RMB26.5 million ($4.2 million) compared to net cash used in operating activities of RMB9.2 million for the same period of FY2012.
Net cash used in financing activities amounted to RMB14.1 million ($2.2 million) for the nine months ended March 31, 2013, compared to net cash provided by financing activities of RMB8.8 million for the same period of FY2012. During the fiscal 2013 nine-month period, we repaid RMB21.7 million ($3.4 million) commercial bank loan and received a RMB8.35 million ($1.3 million) loan from two banks, which was guaranteed by one of our shareholders.
Net cash used in investing activities was RMB0.5 million ($0.1 million) for the nine months ended March 31, 2013, compared to RMB0.6 million for the same period of FY2012. The slight decrease was mainly due to approximately RMB0.2 million increase in proceeds from disposal of fixed assets and offset by approximately RMB0.1 million increase in purchase of property and equipment.
About Recon Technology, Ltd.
Recon Technology, Ltd. is a non-state-owned oil field service company in China. The company has been providing software, equipment and services designed to increase the efficiency and automation in oil and gas exploration, extraction, production and refinery for Chinese oil and gas fields for more than 10 years. More information may be found at http://www.recon.cn or e-mail: info@recon.cn.
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.
Contact:
At the Company:
Recon Technology, Ltd.
Tel: +86-10-8494-5799
Email: info@recon.cn
Web: http://www.recon.cn
Investor Relations:
Tina Xiao
Weitian Group LLC
Email: tina.xiao@weitian-ir.com
Web: http://www.weitian-ir.com
RECON TECHNOLOGY, LTD
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, As of March 31, As of March 31,
-------------- --------------- ---------------
2012 2013 2013
---- ---- ----
ASSETS RMB RMB U.S. Dollars
--- --- ------------
Current assets
Cash and cash equivalents 3,533,283 6,452,691 $1,027,237
RMB RMB
Trade accounts receivable, net 61,993,942 49,012,257 7,802,512
Trade accounts receivable- related parties, net 20,394,749 17,693,490 2,816,717
Inventories, net 24,281,300 14,884,099 2,369,476
Other receivables, net 8,074,096 17,858,793 2,843,033
Other receivables- related parties 17,729 1,056,696 168,221
Purchase advances, net 16,250,616 21,687,064 3,452,475
Purchase advances- related parties 1,093,534 1,394,034 221,923
Tax recoverable 2,790,722 - -
Prepaid expenses 535,336 809,686 128,898
Deferred tax asset 1,106,801 1,094,438 174,229
--------- --------- -------
Total current assets 140,072,108 131,943,248 21,004,721
Property and equipment, net 1,774,820 1,795,564 285,845
Long-term other receivable 10,302,349 5,228,053 832,280
---------- --------- -------
Total Assets RMB 152,149,277 RMB 138,966,865 $22,122,846
=== =========== === =========== ===========
LIABILITIES AND EQUITY
Current liabilities
Short-term bank loans RMB 23,000,000 RMB 9,697,048 $1,543,723
Trade accounts payable 11,905,560 6,262,528 996,964
Trade accounts payable- related parties 5,339,231 5,449,388 867,516
Other payables 2,341,826 2,290,687 364,666
Other payable- related parties 1,099,259 5,998,879 954,992
Deferred revenue 3,291,073 3,135,904 499,221
Advances from customers 936,124 1,181,120 188,029
Accrued payroll and employees' welfare 949,579 1,663,438 264,811
Accrued expenses 476,416 343,163 54,630
Taxes payable 9,681,620 6,693,590 1,065,587
Short-term borrowings- related parties 4,123,306 5,751,381 915,592
Short-term borrowings- other 2,767,066 570,375 90,801
Total current liabilities 65,911,060 49,037,501 7,806,532
---------- ---------- ---------
Commitments and Contingency
Equity
Common stock, ($ 0.0185 U.S. dollar par value, 25,000,000 529,979 529,979 84,370
shares authorized; 3,951,811 shares issued and outstanding as
of June 30, 2012 and March 31, 2013)
Additional paid-in capital 67,643,791 69,053,281 10,992,945
Appropriated retained earnings 2,378,961 2,378,961 378,719
Unappropriated retained earnings 9,354,535 11,051,996 1,759,424
Accumulated other comprehensive loss (290,496) (307,385) (48,936)
Total controlling shareholders' equity 79,616,770 82,706,832 13,166,522
Non-controlling interest 6,621,447 7,222,532 1,149,792
--------- --------- ---------
Total equity 86,238,217 89,929,364 14,316,314
---------- ---------- ----------
Total Liabilities and Equity RMB 152,149,277 RMB 138,966,865 $22,122,846
=== =========== === =========== ===========
RECON TECHNOLOGY, LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
For the nine months ended For the three months ended
March 31, March 31,
--------- ---------
2012 2013 2013 2012 2013 2013
---- ---- ---- ---- ---- ----
RMB RMB USD RMB RMB USD
--- --- --- --- --- ---
Revenues
Hardware RMB 30,162,440 RMB 30,766,627 $4,897,897 RMB 6,997,916 RMB 4,161,583 $662,504
Service 5,547,005 20,567,637 3,274,267 1,990,000 62,678 9,978
Software 3,952,991 5,192,712 826,654 - - -
Software - related parties - 2,273,504 361,931 - 2,273,504 361,931
Hardware - related parties 9,143,503 3,736,107 594,770 4,031,206 1,004,030 159,837
--------- --------- ------- --------- --------- -------
Total revenues 48,805,939 62,536,587 9,955,519 13,019,122 7,501,795 1,194,250
Cost of revenues 30,979,868 41,915,938 6,672,812 6,786,052 3,346,344 532,722
---------
Gross profit 17,826,071 20,620,649 3,282,707 6,233,070 4,155,451 661,528
---------- ---------- --------- --------- --------- -------
Selling and distribution expenses 3,537,806 4,693,193 747,133 1,273,126 1,790,199 284,991
General and administrative expenses 10,008,519 8,452,540 1,345,603 4,193,772 3,966,782 631,492
Research and development expenses 5,318,048 6,284,834 1,000,515 662,743 552,645 87,978
-------
Operating expenses 18,864,373 19,430,567 3,093,251 6,129,641 6,309,626 1,004,461
---------- ---------- --------- --------- --------- ---------
Income (loss) from operations (1,038,302) 1,190,082 189,456 103,429 (2,154,175) (342,933)
---------- --------- ------- ------- ---------- --------
Other income (expenses)
Subsidy income 554,856 2,143,669 341,262 540,756 1,343,669 213,906
Interest income 3,089 443,391 70,586 286 137,803 21,938
Interest expense (502,013) (1,494,887) (237,979) (225,718) (618,473) (98,458)
Gain from foreign currency exchange - 339,876 54,107 - (185) (29)
Other income (expense) (236,374) (19,158) (3,050) (26,764) (109,881) (17,493)
-------- ------- ------ ------- -------- -------
Income (loss) before income tax (1,218,744) 2,602,973 414,382 391,989 (1,401,242) (223,069)
Provision (benefit) for income tax 345,964 302,550 48,164 132,883 (152,382) (24,258)
-------- -------
Net Income (loss) (1,564,708) 2,300,423 366,218 259,106 (1,248,860) (198,811)
Less: Net income attributable to non-controlling interest 325,867 602,961 95,988 140,410 (2,127) (339)
------ ----
Net Income (loss) attributable to Recon Technology, Ltd RMB (1,890,575) RMB 1,697,462 $270,230 RMB 118,696 RMB (1,246,733) $(198,472)
=== ========== === ========= ======== === ======= === ========== =========
Comprehensive income (loss)
Net income (loss) (1,564,708) 2,300,423 366,218 259,106 (1,248,860) (198,811)
Foreign currency translation adjustment (119,795) (16,889) (2,689) (119,973) (717) (114)
-------- ------- ------ -------- ---- ----
Comprehensive income (loss) (1,684,503) 2,283,534 363,529 139,133 (1,249,577) (198,925)
Less: Comprehensive income attributable to non-controlling interest 313,888 601,084 95,690 128,449 (2,207) (351)
------- ------- ------ ------- ------ ----
Comprehensive income (loss) attributable to Recon RMB (1,998,391) RMB 1,682,450 $267,839 RMB 10,684 RMB (1,247,370) $(198,574)
Technology, Ltd
===
Earning (loss) per common share - basic and diluted RMB (0.48) RMB 0.43 $0.07 RMB 0.03 RMB (0.32) $(0.05)
=== ===== === ==== ===== === ==== === ===== ======
Weighted - average shares -basic and diluted 3,951,811 3,951,811 3,951,811 3,951,811 3,951,811 3,951,811
========= ========= ========= ========= ========= =========
RECON TECHNOLOGY, LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended March 31,
-----------------------------------
2012 2013 2013
---- ---- ----
RMB RMB U.S. Dollars
--- --- ------------
Cash flows from operating activities:
Net income (loss) RMB (1,564,708) RMB 2,300,423 $366,218
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation 252,842 467,914 74,490
Loss from disposal of equipment 18,887 26,845 4,274
Provision/(recovery of) for doubtful accounts 1,695,435 (82,420) (13,121)
Stock based compensation 784,010 1,358,726 216,303
Deferred tax (benefit)/provision (315,125) 12,363 1,968
Changes in operating assets and liabilities:
Trade accounts receivable (16,718,352) 13,156,606 2,094,467
Trade accounts receivable-related parties - 2,701,259 430,027
Notes receivable 1,276,574 - -
Other receivable, net 2,301,650 (4,641,896) (738,968)
Other receivables related parties, net - (1,038,967) (165,398)
Purchase advance, net (10,691,586) (5,597,453) (891,087)
Purchase advance-related party, net - (300,500) (47,838)
Tax recoverable - 2,790,722 444,269
Prepaid expense (1,409,973) (274,350) (43,675)
Inventories 6,586,927 9,397,201 1,495,988
Trade accounts payable 6,462,714 (5,643,032) (898,343)
Trade accounts payable-related parties - 110,157 17,536
Other payables 2,087,020 (51,139) (8,141)
Other payables-related parties - 4,899,620 779,996
Deferred income (899,460) (155,169) (24,702)
Advances from customers 30,705 244,996 39,002
Accrued payroll and employees' welfare (41,042) 713,859 113,643
Accrued expenses (34,268) (133,253) (21,213)
Taxes payable 934,906 (2,988,030) (475,680)
Net cash provided by (used in) operating activities (9,242,844) 17,274,482 2,750,015
---------- ---------- ---------
Cash flows from investing activities:
Purchase of property and equipment (564,831) (676,504) (107,696)
Proceeds from disposal of equipment 4,900 161,000 25,630
Net cash used in investing activities (559,931) (515,504) (82,066)
-------- -------- -------
Cash flows from financing activities:
Proceeds from short-term bank loans 9,000,000 8,350,000 1,329,279
Repayments of short-term bank loans (5,000,000) (21,652,952) (3,447,044)
Proceeds from short-term borrowings 574,597 - -
Proceeds from borrowings-related parties 4,198,901 3,658,102 582,352
Repayment of short-term borrowings (500,000) (2,275,764) (362,290)
Repayment of short-term borrowings-related parties - (2,232,477) (355,399)
Capital contribution in VIE 500,000 20,000 3,184
Net cash provided by (used in) financing activities 8,773,498 (14,133,091) (2,249,918)
--------- ----------- ----------
Effect of exchange rate fluctuation on cash and cash equivalents (100,863) 293,521 46,724
-------- ------- ------
Net increase (decrease in) cash and cash equivalents (1,130,140) 2,919,408 464,755
Cash and cash equivalents at beginning of period 3,485,944 3,533,283 562,482
--------- --------- -------
Cash and cash equivalents at end of period RMB 2,355,804 RMB 6,452,691 $1,027,237
=== ========= === ========= ==========
Supplemental cash flow information
Cash paid during the period for interest RMB 334,014 RMB 1,356,581 $215,961
=== ======= === ========= ========
Cash paid during the period for taxes RMB 481,723 RMB 832,028 $132,455
=== ======= === ======= ========
SOURCE Recon Technology, Ltd.
SOURCE: Recon Technology, Ltd.
Recon Technology Reports Third Quarter Fiscal 2013 Financial Results
PR Newswire
BEIJING, May 13, 2013
BEIJING, May 13, 2013 /PRNewswire-FirstCall/ -- Recon Technology, Ltd. (Nasdaq: RCON) ("Recon" or the "Company"), a Chinese non-state-owned oilfield services provider to oil and gas companies and their affiliates, today reported results for its third quarter of fiscal 2013 ended March 31, 2013.
Nine Month Financial Highlights
- Total revenue for the nine months ended March 31, 2013 increased 28% to RMB 62.5 million ($10.0 million).
- Gross profit for the nine months ended March 31, 2013 increased 16% to RMB 20.6 million ($3.3 million).
- Operating profit was RMB1.2 million ($0.2 million), up 214.6% compared to an operating loss of RMB1.0 million for the nine months ended March 31, 2012.
- Net profit attributable to ordinary shareholders for the nine months ended March 31, 2013 was RMB 1.7 million ($0.3 million), or RMB 0.43 ($0.07) per diluted share, as compared to net loss attributable to ordinary shareholders for the same period of FY2012 of RMB 2.0 million, or a loss of RMB 0.48 per diluted share.
Q3 FY2013 Financial Highlights
- Total revenue for the third quarter of FY2013 was RMB7.5 million ($1.2 million), a decrease of 42.4% from the same period of FY2012.
- Gross margin increased to 55.4% for the third quarter of FY2013 from 47.9% for the same period of FY2012.
- Net loss attributable to ordinary shareholders for the third quarter of FY2013 was RMB1.2 million ($0.2 million), or RMB0.32 ($0.05) per diluted share. Net income attributable to ordinary shareholders for the same period of FY2012 was RMB0.1 million or RMB0.03 per diluted share.
"Year to date in FY2013, our operating efficiency has continued to improve, which is reflected in our overall financial performance," said Mr. Yin Shenping, CEO of Recon. "The temporary revenue decline in the third quarter was mainly due to timing issues related to current project completion status, rather than any changes in business fundamentals. As we complete outstanding projects, and assuming we obtain new contracts for our fracturing services and furnace business, we anticipate the coming quarters will reflect what we believe are positive results for our company."
Mr. Yin continued, "Since our IPO in 2009, we have successfully expanded our market penetration, including in the Sichuan Oilfield, Zhongyuan Oilfield and Jilin Oilfield. Our fracturing services were recently qualified at Sinopec, which gives us the opportunity to continue to expand this new service line beyond Sinopec's affiliate, Zhongyuan Oilfield. As we continue to capitalize on our position in China's fragmented oil services industry and broaden our integrated products and service offerings through R&D and collaboration with Chinese and international companies involved in the oilfield services industry, we believe Recon is well-positioned to continue to grow."
Q3 FY2013 Financial Results
Total revenue for the third quarter of FY2013 decreased by 42.4% to RMB7.5 million ($1.2 million) from RMB13.0 million for the same period of FY2012. The decline in revenue was mainly attributable to lower sales of automation equipment and service business as a result of unfinished projects.
Gross profit decreased to RMB4.2 million ($0.7 million) for the third quarter of FY2013, down 33.3% from the same period of FY2012. Gross margin increased to 55.4% for the third quarter of FY2013 from 47.9% for the same period of FY2012. This was mainly because software sales, which have higher gross margin, accounted for a higher percentage of total revenue during the third quarter of FY2013 compared to the same period in FY2012.
Selling and distribution expenses increased by 40.6% to RMB1.8 million ($0.3 million) for the third quarter of FY2013 from RMB1.3 million for the same period of FY2012. This increase was primarily due to increased business travelling expenses, bidding maintenance expenses. General and administrative expenses decreased by 5.4% to RMB4.0 million ($0.6 million) for the third quarter of FY2013 from RMB4.2 million for the same period of FY2012. Research and development expenses decreased by 16.6% to RMB0.6 million ($0.1 million) for the third quarter of FY2013 from RMB0.7 million for the same period of FY2012.
Loss from operations was RMB2.2 million ($0.3 million) for the third quarter of FY2013, compared to an income of RMB0.1 million for the same period of FY2012. This decrease in income from operations is attributed to the decrease in revenue and increase in SG&A expenses as a percentage of revenue.
Net loss attributable to ordinary shareholders was RMB1.2 million ($0.2 million) for the third quarter of FY2013 versus net income of RMB0.1 million for the same period of FY2012. Diluted loss per share was RMB0.32 ($0.05) for the third quarter of FY2013, compared to diluted earnings per share of RMB0.03 ($0.005) for the same period of FY2012.
Adjusted EBITDA was (RMB0.1) million for the third quarter of FY2013, compared to RMB1.0 million for the same period of FY2012.
|
For the Three Months Ended | ||||||||
|
March 31, | ||||||||
|
Reconciliation of Adjusted EBITDA |
2012 |
2013 |
2013 | |||||
|
to Net Income (Loss) |
RMB |
RMB |
USD | |||||
|
Net income (loss) |
RMB |
259,106 |
RMB |
(1,248,860) |
$ |
(198,812) | ||
|
Provision for income taxes |
132,883 |
(152,382) |
(24,258) | |||||
|
Interest expense |
225,718 |
618,473 |
98,458 | |||||
|
Stock compensation expense |
259,164 |
451,572 |
71,888 | |||||
|
Depreciation, amortization and accretion |
86,685 |
395,535 |
62,967 | |||||
|
Adjusted EBITDA |
RMB |
954,305 |
RMB |
64,338 |
$ |
10,243 | ||
As of March 31, 2013, cash and cash equivalents were RMB6.5 million ($1 million). Cash and cash equivalents consist of cash on hand, demand deposits and highly liquid short-term debt investments with stated maturities of no more than six months.
Year-to-Date FY2013 Financial Results
Total revenue for the nine months ended March 31, 2013 increased by 28.1% to RMB62.5 million ($10.0 million) from RMB48.8 million for the same period of FY2012, primarily driven by increased sales from the Hardware business as well as the Fracturing Service business.
Gross profit increased to RMB20.6 million ($3.3 million) for the nine months ended March 31, 2013, up 15.7% from the same period of FY2012. Gross margin decreased to 33.0% for the nine months ended March 31, 2013 from 36.5% for the same period of FY 2012. This was mainly related to margin contraction in our furnace business as a result of higher material and labor costs.
Selling and distribution expenses increased by 32.7% to RMB4.7 million ($0.7 million) for the nine months ended March 31, 2013 from RMB3.5 million for the same period FY 2012. This increase was primarily due to increased shipping costs and maintenance expenses. General and administrative expenses decreased by 15.5% to RMB8.5 million ($1.3 million) for the nine months ended March 31, 2013 from RMB10.0 million for the same period FY 2012. Research and development expenses were RMB6.3 million ($1 million) for the nine months ended March 31, 2013, up 18.2% from the same period of FY2012. Overall, operating expenses were RMB19.4 million ($3.1 million) for the nine months ended March 31, 2013, up 3.0% from the same period of FY2012.
Income from operations was RMB1.2 million ($0.2 million) for the nine months ended March 31, 2013, compared to a loss of RMB1.0 million for the same period of FY2012. This increase in income from operations can be attributed primarily to an increase in total revenue and decrease in general and administrative expenses as a percentage of total revenue.
Net income attributable to ordinary shareholders was RMB1.7 million ($0.3 million) for the nine months ended March 31, 2013, an improvement of RMB3.6 million from net loss of RMB1.9 million for the same period of FY2012. Diluted earnings per share was RMB0.43 ($0.07) for the nine months ended March 31, 2013, compared to diluted loss per share of RMB0.48 for the same period of FY2012.
Adjusted EBITDA was RMB5.9 million ($0.9 million) for the nine months ended March 31, 2013, 1,750.7% increased compared to RMB0.3 million for the same period of FY2012.
|
For the Nine Months Ended | ||||||||
|
March 31, | ||||||||
|
Reconciliation of Adjusted EBITDA |
2012 |
2013 |
2013 | |||||
|
to Net Income (Loss) |
RMB |
RMB |
USD | |||||
|
Net income (loss) |
RMB |
(1,564,708) |
RMB |
2,300,423 |
$ |
366,218 | ||
|
Provision for income taxes |
345,964 |
302,550 |
48,164 | |||||
|
Interest expense |
502,013 |
1,494,887 |
237,979 | |||||
|
Stock compensation expense |
784,010 |
1,358,726 |
216,303 | |||||
|
Depreciation, amortization and accretion |
252,842 |
467,914 |
74,490 | |||||
|
Adjusted EBITDA |
RMB |
320,121 |
RMB |
5,924,500 |
$ |
943,154 | ||
For the nine months ended March 31, 2012, net cash provided by operating activities was RMB17.3 million ($2.8 million). This was an increase of RMB26.5 million ($4.2 million) compared to net cash used in operating activities of RMB9.2 million for the same period of FY2012.
Net cash used in financing activities amounted to RMB14.1 million ($2.2 million) for the nine months ended March 31, 2013, compared to net cash provided by financing activities of RMB8.8 million for the same period of FY2012. During the fiscal 2013 nine-month period, we repaid RMB21.7 million ($3.4 million) commercial bank loan and received a RMB8.35 million ($1.3 million) loan from two banks, which was guaranteed by one of our shareholders.
Net cash used in investing activities was RMB0.5 million ($0.1 million) for the nine months ended March 31, 2013, compared to RMB0.6 million for the same period of FY2012. The slight decrease was mainly due to approximately RMB0.2 million increase in proceeds from disposal of fixed assets and offset by approximately RMB0.1 million increase in purchase of property and equipment.
About Recon Technology, Ltd.
Recon Technology, Ltd. is a non-state-owned oil field service company in China. The company has been providing software, equipment and services designed to increase the efficiency and automation in oil and gas exploration, extraction, production and refinery for Chinese oil and gas fields for more than 10 years. More information may be found at http://www.recon.cn or e-mail: info@recon.cn.
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.
Contact:
At the Company:
Recon Technology, Ltd.
Tel: +86-10-8494-5799
Email: info@recon.cn
Web: http://www.recon.cn
Investor Relations:
Tina Xiao
Weitian Group LLC
Email: tina.xiao@weitian-ir.com
Web: http://www.weitian-ir.com
|
RECON TECHNOLOGY, LTD | ||||||||
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
|
As of June 30, |
As of March 31, |
As of March 31, | ||||||
|
2012 |
2013 |
2013 | ||||||
|
ASSETS |
RMB |
RMB |
U.S. Dollars | |||||
|
Current assets |
||||||||
|
Cash and cash equivalents |
RMB |
3,533,283 |
RMB |
6,452,691 |
$ |
1,027,237 | ||
|
Trade accounts receivable, net |
61,993,942 |
49,012,257 |
7,802,512 | |||||
|
Trade accounts receivable- related parties, net |
20,394,749 |
17,693,490 |
2,816,717 | |||||
|
Inventories, net |
24,281,300 |
14,884,099 |
2,369,476 | |||||
|
Other receivables, net |
8,074,096 |
17,858,793 |
2,843,033 | |||||
|
Other receivables- related parties |
17,729 |
1,056,696 |
168,221 | |||||
|
Purchase advances, net |
16,250,616 |
21,687,064 |
3,452,475 | |||||
|
Purchase advances- related parties |
1,093,534 |
1,394,034 |
221,923 | |||||
|
Tax recoverable |
2,790,722 |
- |
- | |||||
|
Prepaid expenses |
535,336 |
809,686 |
128,898 | |||||
|
Deferred tax asset |
1,106,801 |
1,094,438 |
174,229 | |||||
|
Total current assets |
140,072,108 |
131,943,248 |
21,004,721 | |||||
|
Property and equipment, net |
1,774,820 |
1,795,564 |
285,845 | |||||
|
Long-term other receivable |
10,302,349 |
5,228,053 |
832,280 | |||||
|
Total Assets |
RMB |
152,149,277 |
RMB |
138,966,865 |
$ |
22,122,846 | ||
|
LIABILITIES AND EQUITY |
||||||||
|
Current liabilities |
||||||||
|
Short-term bank loans |
RMB |
23,000,000 |
RMB |
9,697,048 |
$ |
1,543,723 | ||
|
Trade accounts payable |
11,905,560 |
6,262,528 |
996,964 | |||||
|
Trade accounts payable- related parties |
5,339,231 |
5,449,388 |
867,516 | |||||
|
Other payables |
2,341,826 |
2,290,687 |
364,666 | |||||
|
Other payable- related parties |
1,099,259 |
5,998,879 |
954,992 | |||||
|
Deferred revenue |
3,291,073 |
3,135,904 |
499,221 | |||||
|
Advances from customers |
936,124 |
1,181,120 |
188,029 | |||||
|
Accrued payroll and employees' welfare |
949,579 |
1,663,438 |
264,811 | |||||
|
Accrued expenses |
476,416 |
343,163 |
54,630 | |||||
|
Taxes payable |
9,681,620 |
6,693,590 |
1,065,587 | |||||
|
Short-term borrowings- related parties |
4,123,306 |
5,751,381 |
915,592 | |||||
|
Short-term borrowings- other |
2,767,066 |
570,375 |
90,801 | |||||
|
Total current liabilities |
65,911,060 |
49,037,501 |
7,806,532 | |||||
|
Commitments and Contingency |
||||||||
|
Equity |
||||||||
|
Common stock, ($ 0.0185 U.S. dollar par value, 25,000,000 |
529,979 |
529,979 |
84,370 | |||||
|
Additional paid-in capital |
67,643,791 |
69,053,281 |
10,992,945 | |||||
|
Appropriated retained earnings |
2,378,961 |
2,378,961 |
378,719 | |||||
|
Unappropriated retained earnings |
9,354,535 |
11,051,996 |
1,759,424 | |||||
|
Accumulated other comprehensive loss |
(290,496) |
(307,385) |
(48,936) | |||||
|
Total controlling shareholders' equity |
79,616,770 |
82,706,832 |
13,166,522 | |||||
|
Non-controlling interest |
6,621,447 |
7,222,532 |
1,149,792 | |||||
|
Total equity |
86,238,217 |
89,929,364 |
14,316,314 | |||||
|
Total Liabilities and Equity |
RMB |
152,149,277 |
RMB |
138,966,865 |
$ |
22,122,846 | ||
|
RECON TECHNOLOGY, LTD | |||||||||||||||||
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||||||||
|
For the nine months ended |
For the three months ended | ||||||||||||||||
|
March 31, |
March 31, | ||||||||||||||||
|
2012 |
2013 |
2013 |
2012 |
2013 |
2013 | ||||||||||||
|
RMB |
RMB |
USD |
RMB |
RMB |
USD | ||||||||||||
|
Revenues |
|||||||||||||||||
|
Hardware |
RMB |
30,162,440 |
RMB |
30,766,627 |
$ |
4,897,897 |
RMB |
6,997,916 |
RMB |
4,161,583 |
$ |
662,504 | |||||
|
Service |
5,547,005 |
20,567,637 |
3,274,267 |
1,990,000 |
62,678 |
9,978 | |||||||||||
|
Software |
3,952,991 |
5,192,712 |
826,654 |
- |
- |
- | |||||||||||
|
Software - related parties |
- |
2,273,504 |
361,931 |
- |
2,273,504 |
361,931 | |||||||||||
|
Hardware - related parties |
9,143,503 |
3,736,107 |
594,770 |
4,031,206 |
1,004,030 |
159,837 | |||||||||||
|
Total revenues |
48,805,939 |
62,536,587 |
9,955,519 |
13,019,122 |
7,501,795 |
1,194,250 | |||||||||||
|
Cost of revenues |
30,979,868 |
41,915,938 |
6,672,812 |
6,786,052 |
3,346,344 |
532,722 | |||||||||||
|
Gross profit |
17,826,071 |
20,620,649 |
3,282,707 |
6,233,070 |
4,155,451 |
661,528 | |||||||||||
|
Selling and distribution expenses |
3,537,806 |
4,693,193 |
747,133 |
1,273,126 |
1,790,199 |
284,991 | |||||||||||
|
General and administrative expenses |
10,008,519 |
8,452,540 |
1,345,603 |
4,193,772 |
3,966,782 |
631,492 | |||||||||||
|
Research and development expenses |
5,318,048 |
6,284,834 |
1,000,515 |
662,743 |
552,645 |
87,978 | |||||||||||
|
Operating expenses |
18,864,373 |
19,430,567 |
3,093,251 |
6,129,641 |
6,309,626 |
1,004,461 | |||||||||||
|
Income (loss) from operations |
(1,038,302) |
1,190,082 |
189,456 |
103,429 |
(2,154,175) |
(342,933) | |||||||||||
|
Other income (expenses) |
|||||||||||||||||
|
Subsidy income |
554,856 |
2,143,669 |
341,262 |
540,756 |
1,343,669 |
213,906 | |||||||||||
|
Interest income |
3,089 |
443,391 |
70,586 |
286 |
137,803 |
21,938 | |||||||||||
|
Interest expense |
(502,013) |
(1,494,887) |
(237,979) |
(225,718) |
(618,473) |
(98,458) | |||||||||||
|
Gain from foreign currency exchange |
- |
339,876 |
54,107 |
- |
(185) |
(29) | |||||||||||
|
Other income (expense) |
(236,374) |
(19,158) |
(3,050) |
(26,764) |
(109,881) |
(17,493) | |||||||||||
|
Income (loss) before income tax |
(1,218,744) |
2,602,973 |
414,382 |
391,989 |
(1,401,242) |
(223,069) | |||||||||||
|
Provision (benefit) for income tax |
345,964 |
302,550 |
48,164 |
132,883 |
(152,382) |
(24,258) | |||||||||||
|
Net Income (loss) |
(1,564,708) |
2,300,423 |
366,218 |
259,106 |
(1,248,860) |
(198,811) | |||||||||||
|
Less: Net income attributable to non-controlling interest |
325,867 |
602,961 |
95,988 |
140,410 |
(2,127) |
(339) | |||||||||||
|
Net Income (loss) attributable to Recon Technology, Ltd |
RMB |
(1,890,575) |
RMB |
1,697,462 |
$ |
270,230 |
RMB |
118,696 |
RMB |
(1,246,733) |
$ |
(198,472) | |||||
|
Comprehensive income (loss) |
|||||||||||||||||
|
Net income (loss) |
(1,564,708) |
2,300,423 |
366,218 |
259,106 |
(1,248,860) |
(198,811) | |||||||||||
|
Foreign currency translation adjustment |
(119,795) |
(16,889) |
(2,689) |
(119,973) |
(717) |
(114) | |||||||||||
|
Comprehensive income (loss) |
(1,684,503) |
2,283,534 |
363,529 |
139,133 |
(1,249,577) |
(198,925) | |||||||||||
|
Less: Comprehensive income attributable to non-controlling interest |
313,888 |
601,084 |
95,690 |
128,449 |
(2,207) |
(351) | |||||||||||
|
Comprehensive income (loss) attributable to Recon |
RMB |
(1,998,391) |
RMB |
1,682,450 |
$ |
267,839 |
RMB |
10,684 |
RMB |
(1,247,370) |
$ |
(198,574) | |||||
|
Earning (loss) per common share - basic and diluted |
RMB |
(0.48) |
RMB |
0.43 |
$ |
0.07 |
RMB |
0.03 |
RMB |
(0.32) |
$ |
(0.05) | |||||
|
Weighted - average shares -basic and diluted |
3,951,811 |
3,951,811 |
3,951,811 |
3,951,811 |
3,951,811 |
3,951,811 | |||||||||||
|
RECON TECHNOLOGY, LTD | ||||||||
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
|
For the nine months ended March 31, | ||||||||
|
2012 |
2013 |
2013 | ||||||
|
RMB |
RMB |
U.S. Dollars | ||||||
|
Cash flows from operating activities: |
||||||||
|
Net income (loss) |
RMB |
(1,564,708) |
RMB |
2,300,423 |
$ |
366,218 | ||
|
Adjustments to reconcile net income (loss) to net cash |
||||||||
|
Depreciation |
252,842 |
467,914 |
74,490 | |||||
|
Loss from disposal of equipment |
18,887 |
26,845 |
4,274 | |||||
|
Provision/(recovery of) for doubtful accounts |
1,695,435 |
(82,420) |
(13,121) | |||||
|
Stock based compensation |
784,010 |
1,358,726 |
216,303 | |||||
|
Deferred tax (benefit)/provision |
(315,125) |
12,363 |
1,968 | |||||
|
Changes in operating assets and liabilities: |
||||||||
|
Trade accounts receivable |
(16,718,352) |
13,156,606 |
2,094,467 | |||||
|
Trade accounts receivable-related parties |
- |
2,701,259 |
430,027 | |||||
|
Notes receivable |
1,276,574 |
- |
- | |||||
|
Other receivable, net |
2,301,650 |
(4,641,896) |
(738,968) | |||||
|
Other receivables related parties, net |
- |
(1,038,967) |
(165,398) | |||||
|
Purchase advance, net |
(10,691,586) |
(5,597,453) |
(891,087) | |||||
|
Purchase advance-related party, net |
- |
(300,500) |
(47,838) | |||||
|
Tax recoverable |
- |
2,790,722 |
444,269 | |||||
|
Prepaid expense |
(1,409,973) |
(274,350) |
(43,675) | |||||
|
Inventories |
6,586,927 |
9,397,201 |
1,495,988 | |||||
|
Trade accounts payable |
6,462,714 |
(5,643,032) |
(898,343) | |||||
|
Trade accounts payable-related parties |
- |
110,157 |
17,536 | |||||
|
Other payables |
2,087,020 |
(51,139) |
(8,141) | |||||
|
Other payables-related parties |
- |
4,899,620 |
779,996 | |||||
|
Deferred income |
(899,460) |
(155,169) |
(24,702) | |||||
|
Advances from customers |
30,705 |
244,996 |
39,002 | |||||
|
Accrued payroll and employees' welfare |
(41,042) |
713,859 |
113,643 | |||||
|
Accrued expenses |
(34,268) |
(133,253) |
(21,213) | |||||
|
Taxes payable |
934,906 |
(2,988,030) |
(475,680) | |||||
|
Net cash provided by (used in) operating activities |
(9,242,844) |
17,274,482 |
2,750,015 | |||||
|
Cash flows from investing activities: |
||||||||
|
Purchase of property and equipment |
(564,831) |
(676,504) |
(107,696) | |||||
|
Proceeds from disposal of equipment |
4,900 |
161,000 |
25,630 | |||||
|
Net cash used in investing activities |
(559,931) |
(515,504) |
(82,066) | |||||
|
Cash flows from financing activities: |
||||||||
|
Proceeds from short-term bank loans |
9,000,000 |
8,350,000 |
1,329,279 | |||||
|
Repayments of short-term bank loans |
(5,000,000) |
(21,652,952) |
(3,447,044) | |||||
|
Proceeds from short-term borrowings |
574,597 |
- |
- | |||||
|
Proceeds from borrowings-related parties |
4,198,901 |
3,658,102 |
582,352 | |||||
|
Repayment of short-term borrowings |
(500,000) |
(2,275,764) |
(362,290) | |||||
|
Repayment of short-term borrowings-related parties |
- |
(2,232,477) |
(355,399) | |||||
|
Capital contribution in VIE |
500,000 |
20,000 |
3,184 | |||||
|
Net cash provided by (used in) financing activities |
8,773,498 |
(14,133,091) |
(2,249,918) | |||||
|
Effect of exchange rate fluctuation on cash and cash equivalents |
(100,863) |
293,521 |
46,724 | |||||
|
Net increase (decrease in) cash and cash equivalents |
(1,130,140) |
2,919,408 |
464,755 | |||||
|
Cash and cash equivalents at beginning of period |
3,485,944 |
3,533,283 |
562,482 | |||||
|
Cash and cash equivalents at end of period |
RMB |
2,355,804 |
RMB |
6,452,691 |
$ |
1,027,237 | ||
|
Supplemental cash flow information |
||||||||
|
Cash paid during the period for interest |
RMB |
334,014 |
RMB |
1,356,581 |
$ |
215,961 | ||
|
Cash paid during the period for taxes |
RMB |
481,723 |
RMB |
832,028 |
$ |
132,455 | ||
SOURCE Recon Technology, Ltd.
Web Site: http://www.weitian-ir.com