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Recon Technology Announces 143% Increase in Third Quarter Revenue
PR Newswire
BEIJING

BEIJING, May 15, 2014 /PRNewswire/ -- 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 2014 ended March 31, 2014.

Three Month Financial Highlights:

    --  Total revenue for the three months ended March 31, 2014 increased 143%
        to RMB 18.23 million ($2.96 million).
    --  Gross profit for the three months ended March 31, 2014 increased 26.22%
        to RMB 5.24 million ($0.85 million).
    --  Operating loss was RMB 0.6 million ($92,000), narrowed by 73.7% compared
        to an operating loss of RMB 2.15 million for the three months ended
        March 31, 2013.
    --  Net loss attributable to ordinary shareholders for the three months
        ended March 31, 2014 was RMB 1.93 million ($0.31 million), or RMB 0.43
        ($0.07) per diluted share, as compared to net loss attributable to
        ordinary shareholders for the same period of FY2013 of RMB 1.25 million,
        or a loss of RMB 0.32 per diluted share.
    --  The non-GAAP EPS for the three months ended March 31, 2014 was a loss of
        RMB 0.03 per share, as compared to non-GAAP EPS for the same period of
        FY 2013 of a loss of RMB 0.2 per share.
    --  Adjusted EBITDA improved by approximately RMB 0.7 million ($0.1 million)
        to approximately RMB 0.5 million ($0.1 million) for the three months
        ended March 31, 2014 compared to a loss of approximately RMB 0.2 million
        loss for the same period in 2013.

Nine Month Financial Highlights

    --  Total revenue for the nine months ended March 31, 2014 increased 21.5%
        to RMB 76 million ($12.3 million).
    --  Gross profit for the nine months ended March 31, 2014 increased 31.23%
        to RMB 27 million ($4.4 million).
    --  Operating profit was RMB7.83 million ($1.27 million), up 558.16%
        compared to an operating income of RMB1.19 million for the nine months
        ended March 31, 2013.
    --  Net profit attributable to ordinary shareholders for the nine months
        ended March 31, 2014 was RMB 3.93 million ($0.64 million), or RMB 0.92
        ($0.15) per diluted share, as compared to net income attributable to
        ordinary shareholders for the same period of FY2013 of RMB 1.68 million,
        or RMB 0.43 per diluted share.
    --  Adjusted EBITDA improved by approximately RMB 6.1 million ($1.0 million)
        to approximately RMB 11.7 million ($1.9 million) for the nine months
        ended March 31, 2014 compared to approximately RMB 5.6 million income
        for the same period in 2013.
    --  The non-GAAP earnings per share is RMB 1.82, as compared to non-GAAP
        earnings per share for the nine months ended March 31, 2013 of RMB 0.77.

"Year to date in FY2014, we are very pleased to see our operating efficiency has continued to improve, which is reflected in our overall nine month financial data." said Mr. Yin Shenping, CEO of Recon. "The third quarter is the off-season of our company, and we also bore more noncash expenses. Thus, while our third quarter financial results are lower than our second quarter, they are improved from third quarter 2013, with our increasing on-site maintenance skills, we believe that our footprint will continue to grow in the heating furnace and the automation business, and our business will continue to increase."

Mr. Yin continued: "Since our IPO in 2009, we have successfully expanded our market penetration, such as in Jilin oilfield. In April 2014, Recon Technology attended Sinopec seminars on an upcoming shale gas project. This shale gas project will mark the first large-scale commercial shale gas development in China. This conference, which featured a number of likely bidders in the South Fuling shale gas project, mainly focused on heating separators, horizontal fracturing technology and its technical application issues. Recon's Chief Technology Officer, Mr. Guangqiang Chen, introduced Recon's heating furnaces, separators and horizontal fracturing technology at the conference. 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 FY2014 Financial Results:

Our total revenues increased by 143%, or approximately RMB 10.7 million ($1.7 million), from approximately RMB 7.5 million for the three months ended March 31, 2013 to RMB 18.2 million ($3 million) for the same period of 2014. The increase in revenue was mainly attributable to automation products from the Southwest branch of Sinopec and sales of furnaces from Jilin oilfield.

Gross profit increased to approximately RMB 5.2 million ($0.9 million) for the three months ended March 31, 2014 from approximately RMB 4.2 million for the same period in 2013. Our gross profit as a percentage of revenue decreased to 28.8% for the three months ended March 31, 2014 from 55.4% for the same period in 2013. This was mainly because lower margin hardware revenues increased during the three months ended March 31, 2014 compared to the same period last year and higher margin software revenues decreased during the three months ended March 31, 2014.

Selling expenses decreased by 38.7%, from approximately RMB 1.8 million for the three months ended March 31, 2013 to approximately RMB 1.1 million ($0.2 million) for the same period of 2014. This decrease was primarily from the decreased traveling expenses, bidding fee, salaries and maintenance expenses. Selling expenses were 23.9% of total revenues in the three months ended March 31, 2013 and 6% of total revenues in the same period of 2014.

Loss from operations was approximately RMB 0.6 million ($0.1 million) for the three months ended March 31, 2014, compared to loss of RMB 2.2 million for the same period of 2013. This decrease in loss from operations can be attributed primarily to the increased revenue, gross margins and decreases in research and development expenses.

As a result of the factors described above, net loss attributable to ordinary shareholders was approximately RMB 1.9 million ($0.3 million) for the three months ended March 31, 2014, an increase of approximately RMB 0.7 million ($0.1 million) from net loss attributable to ordinary shareholders of RMB1.2 million for the same period of 2013. This was due to increased noncash expense and warrant liability.

Adjusted EBITDA improved by approximately RMB 0.7 million ($0.1 million) to approximately RMB 0.5 million ($0.1 million) for the three months ended March 31, 2014 compared to approximately RMB 0.2 million loss for the same period in 2013. This was due to we increased more noncash expense and warrant liability.

The non-GAAP earnings per share for the third quarter is a loss of RMB 0.03, as compared to non-GAAP earnings per share for the same period of FY2013 of a loss of RMB 0.2.

Year-to-Date FY2013 Financial Results:

Our total revenues increased by 21.5%, or approximately RMB 13.5 million ($2.2 million), from RMB 62.5 million for the nine months ended March 31, 2013 to RMB 76.0 million ($12.3 million) for the same period of 2014. The increase in revenues for the nine-month period was due to sale of furnaces and automation products.

Gross profit increased to approximately RMB 27.1 million ($4.4 million) for the nine months ended March 31, 2014 from approximately RMB 20.6 million for the same period in 2013. Gross profit as a percentage of revenue increased to 35.6% for the nine months ended March 31, 2014 from 33.0% for the same period in 2013. This was mainly because fracturing service with lower margin accounted for a major part of our revenue during the nine months ended March 31, 2013. As to our automation business and furnaces business, our margins were both improved because our products and services were also popular with our clients, especially our newly developed clients.

Selling expenses were flat at RMB 4.7 million ($0.8 million) for the nine months ended March 31, 2013 and 2014. Selling expenses were 7.5% of total revenues in the nine months ended March 31, 2013 and 6.2% of total revenues in the same period of 2014.

Income from operations was approximately RMB 7.8 million ($1.3 million) for the nine months ended March 31, 2014, compared to income of RMB 1.2 million for the same period of 2013. This increase in income from operations can be attributed primarily to the increased revenue, gross margins and decreases in research and development expenses.

As a result of the factors described above, net income attributable to ordinary shareholders was approximately RMB 3.9 million ($0.6 million) for the nine months ended March 31, 2014, an increase of approximately RMB 2.2 million ($0.4 million) from net income attributable to ordinary shareholders of RMB 1.7 million for same period of 2013.

Adjusted EBITDA improved by approximately RMB 6.1 million ($1.0 million) to approximately RMB 11.7 million ($1.9 million) for the nine months ended March 31, 2014 compared to approximately RMB 5.6 million income for the same period in 2013.

The non-GAAP earnings per share is RMB 1.82, more than doubled compared to non-GAAP earnings per share for the nine months ended March 31, 2013 of RMB 0.77.

Net cash used in operating activities was approximately RMB 15.3 million ($2.5 million) for the nine months ended March 31, 2014. This was a decrease of approximately RMB 32.6 million ($5.3 million) compared to net cash provided by operating activities of approximately RMB 17.3 million for the nine months ended March 31, 2013.

Net cash used in investing activities was approximately RMB 0.2 million ($26,000) for the nine months ended March 31, 2014, a decrease of RMB 0.3 million ($58,000) from RMB 0.5 million for the same period of 2013. The decrease was due to a decrease in the purchase of property and equipment. The decrease was because we purchase less property and equipment.

Net cash provided by financing activities amounted to approximately RMB 11.9 million ($1.9 million) for the nine months ended March 31, 2014, compared to cash flows used in financing activities of approximately RMB 14.1 million for the same period in 2013. During the nine-month period ended March 31, 2014, we received net proceeds of RMB 12.1 million ($2.0 million) from a common stock sale of 546,500 shares with institutional investors in November 2013. In addition, we repaid RMB 12.87 million ($2.1 million) short term borrowings to related parties and received RMB 18.5 million ($3.0 million) of net loan proceeds from a commercial bank, which was guaranteed by one of our shareholders.

About Recon

Recon Technology, Ltd. is China's first listed non-state owned oil and gas field service company on Nasdaq (RCON). Recon supplies China's largest oil exploration companies, Sinopec and CNPC, with advanced automated technologies, efficient gathering and transportation equipment and reservoir stimulation measure for increasing petroleum extraction levels, reducing impurities and lowering production costs. Through the years, RCON has taken leading positions on several segmented markets of the oil and gas filed service industry. RCON also has developed stable long-term cooperation relationship with its major clients, and its products and service are also well accepted by clients. For additional information please visit us at www.recon.cn.


                                                                                               RECON TECHNOLOGY, LTD

                                                                                  UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS


                                                                                                                                As of June 30,              As of March 31,               As of March 31,
                                                                                                                                --------------              ---------------               ---------------

                                                                                                                                          2013                         2014                          2014
                                                                                                                                          ----                         ----                          ----

    ASSETS                                                                                                                            RMB                        RMB                     U.S. Dollars
                                                                                                                                      ---                        ---                     ------------

    Current assets

    Cash and cash equivalents                                                                                                         RMB       12,350,392         RMB        8,863,889                    $1,438,499

    Notes receivable                                                                                                                 2,578,855                            -                             -

    Trade accounts receivable, net                                                                                                              38,648,780                   55,808,726                     9,057,065

    Trade accounts receivable- related parties, net                                                                                             18,744,364                   16,794,476                     2,725,535

    Inventories, net                                                                                                                            13,271,070                   22,094,753                     3,585,705

    Other receivables, net                                                                                                                      19,131,503                   15,970,126                     2,591,754

    Other receivables- related parties                                                                                                             742,528                      664,831                       107,894

    Purchase advances, net                                                                                                                      18,412,507                   23,480,982                     3,810,672

    Purchase advances- related parties                                                                                                             394,034                      394,034                        63,947

    Tax recoverable                                                                                                                    575,650                            -                             -

    Prepaid expenses                                                                                                                             2,853,956                    3,434,100                       557,311

    Deferred tax asset                                                                                                                           1,006,721                    1,082,436                       175,666
                                                                                                                                                 ---------                    ---------                       -------

    Total current assets                                                                                                                       128,710,360                  148,588,353                    24,114,048


    Property and equipment, net                                                                                                                  1,709,846                    1,345,742                       218,397

    Long-term investment                                                                                                                         1,549,450                      674,792                       109,510

    Long-term other receivable                                                                                                                   3,502,680                    5,993,198                       972,622
                                                                                                                                                 ---------                    ---------                       -------

    Total Assets                                                                                                                      RMB      135,472,336         RMB      156,602,085                   $25,414,577
                                                                                                                                      ===      ===========         ===      ===========                   ===========


    LIABILITIES AND EQUITY

    Current liabilities

    Short-term bank loans                                                                                                             RMB       10,000,000         RMB       15,630,000                    $2,536,555

    Trade accounts payable                                                                                                                       7,384,165                   13,595,942                     2,206,453

    Trade accounts payable- related parties                                                                                          3,994,718                            -                             -

    Other payables                                                                                                                               1,964,691                    1,773,163                       287,762

    Other payable- related parties                                                                                                               4,239,675                    3,382,337                       548,911

    Deferred revenue                                                                                                                             3,381,382                    4,326,473                       702,133

    Advances from customers                                                                                                                        470,700                      275,600                        44,726

    Accrued payroll and employees' welfare                                                                                                       1,992,783                      389,443                        63,202

    Accrued expenses                                                                                                                               488,730                      246,113                        39,942

    Taxes payable                                                                                                                                6,754,428                    7,909,731                     1,283,651

    Short-term borrowings- related parties                                                                                                       5,503,279                      200,000                        32,458

    Short-term borrowings- other                                                                                                       570,375                            -                             -

    Warrants liability                                                                                                                       -                    5,992,127                       972,448

    Total current liabilities                                                                                                                   46,744,926                   53,720,929                     8,718,241
                                                                                                                                                ----------                   ----------                     ---------


    Commitments and Contingency


    Equity

    Common stock, ($ 0.0185 U.S. dollar par value, 25,000,000 shares authorized; 3,951,811 and 4,528,311 shares issued
     and outstanding as of June 30, 2013 and March 31, 2014, respectively)                                                                         529,979                      595,335                        96,613

    Additional paid-in capital                                                                                                                  69,516,447                   78,669,718                    12,767,120

    Appropriated retained earnings                                                                                                               3,023,231                    4,868,048                       790,024

    Unappropriated retained earnings                                                                                                             8,749,963                   10,835,662                     1,758,494

    Accumulated other comprehensive loss                                                                                                          (293,201)                    (326,126)                      (52,925)

    Total controlling shareholders' equity                                                                                                      81,526,419                   94,642,637                    15,359,326

    Non-controlling interest                                                                                                                     7,200,991                    8,238,519                     1,337,010
                                                                                                                                                 ---------                    ---------                     ---------

    Total equity                                                                                                                                88,727,410                  102,881,156                    16,696,336
                                                                                                                                                ----------                  -----------                    ----------

    Total Liabilities and Equity                                                                                                      RMB      135,472,336         RMB      156,602,085                   $25,414,577
                                                                                                                                      ===      ===========         ===      ===========                   ===========



    The accompanying notes are an integral part of these unaudited condensed consolidated financial statements


                                                                                                                             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,
                                                                                                                                           ---------                                                   ---------

                                                                                                                                               2013                        2014           2014                                   2013                      2014       2014
                                                                                                                                               ----                        ----           ----                                   ----                      ----       ----

                                                                                                                                RMB                         RMB                  USD                        RMB                         RMB              USD
                                                                                                                                ---                         ---                  ---                        ---                         ---              ---


    Revenues

    Hardware and software                                                                                                       RMB      35,959,339         RMB      73,337,585                $11,901,781           RMB     4,161,583       RMB      17,998,444             $2,920,924

    Service                                                                                                                              20,567,637                     477,769                     77,536                      62,678                    80,180                 13,012

    Hardware and software - related parties                                                                                               6,009,611                   2,196,152                    356,408                   3,277,534                   153,846                 24,967
                                                                                                                                          ---------                   ---------                    -------                   ---------                   -------                 ------

    Total revenues                                                                                                                       62,536,587                  76,011,506                 12,335,725                   7,501,795                18,232,470              2,958,903
                                                                                                                                         ----------                  ----------                 ----------                   ---------                ----------              ---------


    Hardware and software                                                                                                       RMB      23,033,622         RMB      48,447,792                 $7,862,476           RMB     2,527,534       RMB      12,848,136             $2,085,093

    Service                                                                                                                              15,743,234                      77,107                     12,514                      20,620                    42,161                  6,842

    Hardware and software - related parties                                                                                               3,139,082                     426,139                     69,157                     798,190                    97,217                 15,777
                                                                                                                                          ---------                     -------                     ------                     -------                    ------                 ------

    Total cost of revenues                                                                                                               41,915,938                  48,951,038                  7,944,147                   3,346,344                12,987,514              2,107,712
                                                                                                                                                                                                                             ---------                ----------

    Gross profit                                                                                                                         20,620,649                  27,060,468                  4,391,578                   4,155,451                 5,244,956                851,191
                                                                                                                                         ----------                  ----------                  ---------                   ---------                 ---------                -------



    Selling and distribution expenses                                                                                                     4,693,193                   4,701,989                    763,075                   1,790,199                 1,097,549                178,119

    General and administrative expenses                                                                                                   8,452,540                  10,450,904                  1,696,052                   3,966,782                 3,993,341                648,070

    Research and development expenses                                                                                                     6,284,834                   4,074,953                    661,314                     552,645                   720,956                117,002
                                                                                                                                                                                                                               -------                   -------

    Operating expenses                                                                                                                   19,430,567                  19,227,846                  3,120,441                   6,309,626                 5,811,846                943,191
                                                                                                                                         ----------                  ----------                  ---------                   ---------                 ---------                -------



    Income (loss) from operations                                                                                                         1,190,082                   7,832,622                  1,271,137                  (2,154,175)                 (566,890)               (92,000)
                                                                                                                                          ---------                   ---------                  ---------                  ----------                  --------                -------


    Other income (expenses)

    Subsidy income                                                                                                                        2,143,669                   1,220,024                    197,995                   1,343,669                   201,711                 32,735

    Interest income                                                                                                                         443,391                     296,997                     48,199                     137,803                    92,027                 14,935

    Interest expense                                                                                                                     (1,494,887)                   (757,226)                  (122,888)                   (618,473)                 (277,578)               (45,047)

    Loss from investment                                                                                                            -                      (870,627)                 (141,292)                            -                 (135,547)               (21,998)

    Change in fair value of warrants liability                                                                                      -                      (904,327)                 (146,761)                            -                 (904,883)             (146,851)

    Gain (loss) from foreign currency exchange                                                                                              339,876                     (88,080)                   (14,294)                       (185)                   31,312                  5,082

    Other income (expense)                                                                                                                  (19,158)                   (143,498)                   (23,288)                   (109,881)                  (99,552)               (16,156)
                                                                                                                                            -------                    --------                    -------                    --------                   -------                -------


    Income (loss) before income tax                                                                                                       2,602,973                   6,585,885                  1,068,808                  (1,401,242)               (1,659,400)              (269,300)

    Provision for income tax                                                                                                                302,550                   1,609,976                    261,279                    (152,382)                  150,787                 24,471
                                                                                                                                                                                                                              --------                   -------                 ------

    Net Income (loss)                                                                                                                     2,300,423                   4,975,909                    807,529                  (1,248,860)               (1,810,187)              (293,771)


    Less: Net income attributable to non-controlling interest                                                                               602,961                   1,045,396                    169,655                      (2,127)                  120,415                 19,542
                                                                                                                                                                                                                                ------                   -------                 ------

    Net Income attributable to Recon Technology, Ltd                                                                            RMB       1,697,462          RMB      3,930,513                   $637,874            RMB   (1,246,733)       RMB     (1,930,602)             $(313,313)
                                                                                                                                ===       =========         ===       =========                   ========           ===    ==========       ===      ==========              =========


    Comprehensive income (loss)

    Net income                                                                                                                            2,300,423                   4,975,909                    807,529                  (1,248,860)               (1,810,187)              (293,771)

    Foreign currency translation adjustment                                                                                                 (16,889)                    (40,833)                    (6,627)                       (717)                 (118,110)               (19,168)
                                                                                                                                            -------                     -------                     ------                        ----                  --------                -------

    Comprehensive income (loss)                                                                                                           2,283,534                   4,935,076                    800,902                  (1,249,577)               (1,928,297)              (312,939)

    Less: Comprehensive income attributable to non-controlling interest                                                                     601,084                   1,041,313                    168,992                      (2,207)                  108,604                 17,625
                                                                                                                                            -------                   ---------                    -------                      ------                   -------                 ------

    Comprehensive income (loss) attributable to Recon Technology, Ltd                                                           RMB       1,682,450          RMB      3,893,763                   $631,910            RMB   (1,247,370)       RMB     (2,036,901)             $(330,564)
                                                                                                                                ===       =========         ===       =========                   ========           ===    ==========       ===      ==========              =========


    Earnings (loss) per common share - basic                                                                                    RMB            0.43         RMB            0.93                      $0.15           RMB         (0.32)      RMB           (0.43)                $(0.07)
                                                                                                                                ===            ====         ===            ====                      =====           ===         =====       ===           =====                 ======

    Earnings (loss) per common share - diluted                                                                                  RMB            0.43         RMB            0.92                      $0.15           RMB         (0.32)      RMB           (0.43)                $(0.07)
                                                                                                                                ===            ====         ===            ====                      =====           ===         =====       ===           =====                 ======

    Weighted - average shares -basic                                                                                                      3,951,811                   4,211,785                  4,211,785                   3,951,811                 4,528,311              4,528,311
                                                                                                                                          =========                   =========                  =========                   =========                 =========              =========

    Weighted - average shares -diluted                                                                                                    3,951,811                   4,269,510                  4,269,510                   3,951,811                 4,528,311              4,528,311
                                                                                                                                          =========                   =========                  =========                   =========                 =========              =========


    The accompanying notes are an integral part of these unaudited condensed consolidated financial statements


                                                                                      RECON TECHNOLOGY, LTD

                                                                    UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


                                                                                                                                      For the nine months ended March 31,
                                                                                                                                      -----------------------------------

                                                                                                                                   2013                          2014                        2014
                                                                                                                                   ----                          ----                        ----

                                                                                                                                 RMB                         RMB                        U.S.
                                                                                                                                                                                        Dollars
                                                                                                                                    ---                          ---                  --------


    Cash flows from operating activities:

    Net income                                                                                                                   RMB         2,300,423        RMB          4,975,909                $807,529

    Adjustments to reconcile net income to net cash provided by (used in) operating activities:

    Depreciation                                                                                                                               467,914                       457,439                  74,237

    Loss from disposal of  equipment                                                                                                            26,845                        67,587                  10,969

    Provision/(recovery of) for doubtful accounts                                                                                              (82,420)                      668,610                 108,507

    Share based compensation                                                                                                                 1,358,726                     1,660,144                 269,421

    Loss from investment                                                                                                              -                       870,627                     141,292

    Deferred tax provision/(benefit)                                                                                                            12,363                       (75,715)                (12,288)

    Change in fair value of warrants liability                                                                                        -                       904,327                     146,761

    Restricked shares issued to consulting firm                                                                                       -                       407,972                      66,209

    Changes in operating assets and liabilities:

    Trade accounts receivable                                                                                                               13,156,606                   (17,127,239)             (2,779,539)

    Trade accounts receivable-related parties                                                                                                2,701,259                     1,487,501                 241,403

    Notes receivable                                                                                                                  -                     2,578,855                     418,516

    Inventories                                                                                                                              9,397,201                    (8,823,683)             (1,431,974)

    Other receivable, net                                                                                                                   (4,641,896)                      688,724                 111,770

    Other receivables related parties, net                                                                                                  (1,038,967)                       77,697                  12,609

    Purchase advance, net                                                                                                                   (5,597,453)                   (5,325,269)               (864,225)

    Purchase advance-related party, net                                                                                       (300,500)                             -                           -

    Tax recoverable                                                                                                                          2,790,722                       575,650                  93,421

    Prepaid expense                                                                                                                           (274,350)                     (580,144)                (94,150)

    Trade accounts payable                                                                                                                  (5,643,032)                    6,211,777               1,008,094

    Trade accounts payable-related parties                                                                                                     110,157                    (3,994,718)               (648,293)

    Other payables                                                                                                                             (51,139)                     (191,528)                (31,083)

    Other payables-related parties                                                                                                           4,899,620                      (857,338)               (139,135)

    Deferred income                                                                                                                           (155,169)                      945,091                 153,377

    Advances from customers                                                                                                                    244,996                      (195,100)                (31,662)

    Accrued payroll and employees' welfare                                                                                                     713,859                    (1,603,340)               (260,202)

    Accrued expenses                                                                                                                          (133,253)                     (242,617)                (39,374)

    Taxes payable                                                                                                                           (2,988,030)                    1,155,303                 187,491

    Net cash provided by (used in) operating activities                                                                                     17,274,482                   (15,283,478)             (2,480,319)
                                                                                                                                            ----------                   -----------              ----------


    Cash flows from investing activities:

    Purchase of property and equipment                                                                                                        (676,504)                     (258,922)                (42,020)

    Proceeds from disposal of equipment                                                                                                        161,000                        98,000                  15,904

    Net cash used in investing activities                                                                                                     (515,504)                     (160,922)                (26,116)
                                                                                                                                              --------                      --------                 -------


    Cash flows from financing activities:

    Proceeds from short-term bank loans                                                                                                      8,350,000                    18,500,000               3,002,321

    Repayments of short-term bank loans                                                                                                    (21,652,952)                  (12,870,000)             (2,088,641)

    Proceeds from borrowings-related parties                                                                                  3,658,102                             -                           -

    Repayment of  short-term borrowings                                                                                                     (2,275,764)                     (570,375)                (92,565)

    Repayment of short-term borrowings-related parties                                                                                      (2,232,477)                   (5,303,279)               (860,656)

    Proceeds from sale of common stock, net of issuance costs                                                                         -                    12,132,882                   1,969,016

    Capital contribution in VIE                                                                                                  20,000                             -                           -

    Net cash provided by (used in) financing activities                                                                                    (14,133,091)                   11,889,228               1,929,475
                                                                                                                                           -----------                    ----------               ---------


    Effect of exchange rate fluctuation on cash and cash equivalents                                                                           293,521                        68,669                  11,143
                                                                                                                                               -------                        ------                  ------


    Net increase (decrease) in cash and cash equivalents                                                                                     2,919,408                    (3,486,503)               (565,817)

    Cash and cash equivalents at beginning of period                                                                                         3,533,283                    12,350,392               2,004,316
                                                                                                                                             ---------                    ----------               ---------

    Cash and cash equivalents at end of period                                                                                   RMB         6,452,691        RMB          8,863,889              $1,438,499
                                                                                                                                 ===         =========        ===          =========              ==========



    Supplemental cash flow information

    Cash paid during the period for interest                                                                                     RMB         1,356,581        RMB            952,125                $154,518
                                                                                                                                 ===         =========        ===            =======                ========

    Cash paid during the period for taxes                                                                                        RMB           832,028        RMB            700,268                $113,645
                                                                                                                                 ===           =======        ===            =======                ========


    The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Safe Harbor

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.

Company Contact
Liu Jia
Recon Technology, Ltd.
+86 (10) 84945799
info@recon.cn

Investors
Jimmy Caplan
Asia IR/PR
+1-512-329-9505
jimmy@asia-irpr.com

Media
Rick Eisenberg
Asia IR/PR
+1-212-496-6828
rick@asia-irpr.com

SOURCE Recon Technology, Ltd.

SOURCE: Recon Technology, Ltd.

Recon Technology Announces 143% Increase in Third Quarter Revenue

PR Newswire

BEIJING, May 15, 2014 /PRNewswire/ -- 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 2014 ended March 31, 2014.

Three Month Financial Highlights:

  • Total revenue for the three months ended March 31, 2014 increased 143% to RMB 18.23 million ($2.96 million).
  • Gross profit for the three months ended March 31, 2014 increased 26.22% to RMB 5.24 million ($0.85 million).
  • Operating loss was RMB 0.6 million ($92,000), narrowed by 73.7% compared to an operating loss of RMB 2.15 million for the three months ended March 31, 2013.
  • Net loss attributable to ordinary shareholders for the three months ended March 31, 2014 was RMB 1.93 million ($0.31 million), or RMB 0.43 ($0.07) per diluted share, as compared to net loss attributable to ordinary shareholders for the same period of FY2013 of RMB 1.25 million, or a loss of RMB 0.32 per diluted share.
  • The non-GAAP EPS for the three months ended March 31, 2014 was a loss of RMB 0.03 per share, as compared to non-GAAP EPS for the same period of FY 2013 of a loss of RMB 0.2 per share.
  • Adjusted EBITDA improved by approximately RMB 0.7 million ($0.1 million) to approximately RMB 0.5 million ($0.1 million) for the three months ended March 31, 2014 compared to a loss of approximately RMB 0.2 million loss for the same period in 2013.

Nine Month Financial Highlights

  • Total revenue for the nine months ended March 31, 2014 increased 21.5% to RMB 76 million ($12.3 million).
  • Gross profit for the nine months ended March 31, 2014 increased 31.23% to RMB 27 million ($4.4 million).
  • Operating profit was RMB7.83 million ($1.27 million), up 558.16% compared to an operating income of RMB1.19 million for the nine months ended March 31, 2013.
  • Net profit attributable to ordinary shareholders for the nine months ended March 31, 2014 was RMB 3.93 million ($0.64 million), or RMB 0.92 ($0.15) per diluted share, as compared to net income attributable to ordinary shareholders for the same period of FY2013 of RMB 1.68 million, or RMB 0.43 per diluted share.
  • Adjusted EBITDA improved by approximately RMB 6.1 million ($1.0 million) to approximately RMB 11.7 million ($1.9 million) for the nine months ended March 31, 2014 compared to approximately RMB 5.6 million income for the same period in 2013.
  • The non-GAAP earnings per share is RMB 1.82, as compared to non-GAAP earnings per share for the nine months ended March 31, 2013 of RMB 0.77.

"Year to date in FY2014, we are very pleased to see our operating efficiency has continued to improve, which is reflected in our overall nine month financial data." said Mr. Yin Shenping, CEO of Recon. "The third quarter is the off-season of our company, and we also bore more noncash expenses. Thus, while our third quarter financial results are lower than our second quarter, they are improved from third quarter 2013, with our increasing on-site maintenance skills, we believe that our footprint will continue to grow in the heating furnace and the automation business, and our business will continue to increase."

Mr. Yin continued: "Since our IPO in 2009, we have successfully expanded our market penetration, such as in Jilin oilfield. In April 2014, Recon Technology attended Sinopec seminars on an upcoming shale gas project. This shale gas project will mark the first large-scale commercial shale gas development in China. This conference, which featured a number of likely bidders in the South Fuling shale gas project, mainly focused on heating separators, horizontal fracturing technology and its technical application issues. Recon's Chief Technology Officer, Mr. Guangqiang Chen, introduced Recon's heating furnaces, separators and horizontal fracturing technology at the conference. 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 FY2014 Financial Results:

Our total revenues increased by 143%, or approximately RMB 10.7 million ($1.7 million), from approximately RMB 7.5 million for the three months ended March 31, 2013 to RMB 18.2 million ($3 million) for the same period of 2014. The increase in revenue was mainly attributable to automation products from the Southwest branch of Sinopec and sales of furnaces from Jilin oilfield.

Gross profit increased to approximately RMB 5.2 million ($0.9 million) for the three months ended March 31, 2014 from approximately RMB 4.2 million for the same period in 2013. Our gross profit as a percentage of revenue decreased to 28.8% for the three months ended March 31, 2014 from 55.4% for the same period in 2013. This was mainly because lower margin hardware revenues increased during the three months ended March 31, 2014 compared to the same period last year and higher margin software revenues decreased during the three months ended March 31, 2014.

Selling expenses decreased by 38.7%, from approximately RMB 1.8 million for the three months ended March 31, 2013 to approximately RMB 1.1 million ($0.2 million) for the same period of 2014. This decrease was primarily from the decreased traveling expenses, bidding fee, salaries and maintenance expenses. Selling expenses were 23.9% of total revenues in the three months ended March 31, 2013 and 6% of total revenues in the same period of 2014.

Loss from operations was approximately RMB 0.6 million ($0.1 million) for the three months ended March 31, 2014, compared to loss of RMB 2.2 million for the same period of 2013. This decrease in loss from operations can be attributed primarily to the increased revenue, gross margins and decreases in research and development expenses.

As a result of the factors described above, net loss attributable to ordinary shareholders was approximately RMB 1.9 million ($0.3 million) for the three months ended March 31, 2014, an increase of approximately RMB 0.7 million ($0.1 million) from net loss attributable to ordinary shareholders of RMB1.2 million for the same period of 2013. This was due to increased noncash expense and warrant liability.

Adjusted EBITDA improved by approximately RMB 0.7 million ($0.1 million) to approximately RMB 0.5 million ($0.1 million) for the three months ended March 31, 2014 compared to approximately RMB 0.2 million loss for the same period in 2013. This was due to we increased more noncash expense and warrant liability.

The non-GAAP earnings per share for the third quarter is a loss of RMB 0.03, as compared to non-GAAP earnings per share for the same period of FY2013 of a loss of RMB 0.2.

Year-to-Date FY2013 Financial Results:

Our total revenues increased by 21.5%, or approximately RMB 13.5 million ($2.2 million), from RMB 62.5 million for the nine months ended March 31, 2013 to RMB 76.0 million ($12.3 million) for the same period of 2014. The increase in revenues for the nine-month period was due to sale of furnaces and automation products.

Gross profit increased to approximately RMB 27.1 million ($4.4 million) for the nine months ended March 31, 2014 from approximately RMB 20.6 million for the same period in 2013. Gross profit as a percentage of revenue increased to 35.6% for the nine months ended March 31, 2014 from 33.0% for the same period in 2013. This was mainly because fracturing service with lower margin accounted for a major part of our revenue during the nine months ended March 31, 2013. As to our automation business and furnaces business, our margins were both improved because our products and services were also popular with our clients, especially our newly developed clients.

Selling expenses were flat at RMB 4.7 million ($0.8 million) for the nine months ended March 31, 2013 and 2014. Selling expenses were 7.5% of total revenues in the nine months ended March 31, 2013 and 6.2% of total revenues in the same period of 2014.

Income from operations was approximately RMB 7.8 million ($1.3 million) for the nine months ended March 31, 2014, compared to income of RMB 1.2 million for the same period of 2013. This increase in income from operations can be attributed primarily to the increased revenue, gross margins and decreases in research and development expenses.

As a result of the factors described above, net income attributable to ordinary shareholders was approximately RMB 3.9 million ($0.6 million) for the nine months ended March 31, 2014, an increase of approximately RMB 2.2 million ($0.4 million) from net income attributable to ordinary shareholders of RMB 1.7 million for same period of 2013.

Adjusted EBITDA improved by approximately RMB 6.1 million ($1.0 million) to approximately RMB 11.7 million ($1.9 million) for the nine months ended March 31, 2014 compared to approximately RMB 5.6 million income for the same period in 2013.

The non-GAAP earnings per share is RMB 1.82, more than doubled compared to non-GAAP earnings per share for the nine months ended March 31, 2013 of RMB 0.77.

Net cash used in operating activities was approximately RMB 15.3 million ($2.5 million) for the nine months ended March 31, 2014. This was a decrease of approximately RMB 32.6 million ($5.3 million) compared to net cash provided by operating activities of approximately RMB 17.3 million for the nine months ended March 31, 2013.

Net cash used in investing activities was approximately RMB 0.2 million ($26,000) for the nine months ended March 31, 2014, a decrease of RMB 0.3 million ($58,000) from RMB 0.5 million for the same period of 2013. The decrease was due to a decrease in the purchase of property and equipment. The decrease was because we purchase less property and equipment.

Net cash provided by financing activities amounted to approximately RMB 11.9 million ($1.9 million) for the nine months ended March 31, 2014, compared to cash flows used in financing activities of approximately RMB 14.1 million for the same period in 2013. During the nine-month period ended March 31, 2014, we received net proceeds of RMB 12.1 million ($2.0 million) from a common stock sale of 546,500 shares with institutional investors in November 2013. In addition, we repaid RMB 12.87 million ($2.1 million) short term borrowings to related parties and received RMB 18.5 million ($3.0 million) of net loan proceeds from a commercial bank, which was guaranteed by one of our shareholders.

About Recon

Recon Technology, Ltd. is China's first listed non-state owned oil and gas field service company on Nasdaq (RCON). Recon supplies China's largest oil exploration companies, Sinopec and CNPC, with advanced automated technologies, efficient gathering and transportation equipment and reservoir stimulation measure for increasing petroleum extraction levels, reducing impurities and lowering production costs. Through the years, RCON has taken leading positions on several segmented markets of the oil and gas filed service industry. RCON also has developed stable long-term cooperation relationship with its major clients, and its products and service are also well accepted by clients. For additional information please visit us at www.recon.cn.

 

RECON TECHNOLOGY, LTD

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS












As of June 30,



As of March 31,



As of March 31,


2013


2014


2014

ASSETS

RMB


RMB


U.S. Dollars

Current assets









Cash and cash equivalents 

RMB

12,350,392


RMB

8,863,889


$

1,438,499

Notes receivable


2,578,855



-



-

Trade accounts receivable, net 


38,648,780



55,808,726



9,057,065

Trade accounts receivable- related parties, net


18,744,364



16,794,476



2,725,535

Inventories, net


13,271,070



22,094,753



3,585,705

Other receivables, net 


19,131,503



15,970,126



2,591,754

Other receivables- related parties


742,528



664,831



107,894

Purchase advances, net


18,412,507



23,480,982



3,810,672

Purchase advances- related parties


394,034



394,034



63,947

Tax recoverable


575,650



-



-

Prepaid expenses 


2,853,956



3,434,100



557,311

Deferred tax asset


1,006,721



1,082,436



175,666

Total current assets


128,710,360



148,588,353



24,114,048










Property and equipment, net


1,709,846



1,345,742



218,397

Long-term investment


1,549,450



674,792



109,510

Long-term other receivable


3,502,680



5,993,198



972,622

Total Assets

RMB

135,472,336


RMB

156,602,085


$

25,414,577










LIABILITIES AND EQUITY 









Current liabilities









Short-term bank loans

RMB

10,000,000


RMB

15,630,000


$

2,536,555

Trade accounts payable


7,384,165



13,595,942



2,206,453

Trade accounts payable- related parties


3,994,718



-



-

Other payables 


1,964,691



1,773,163



287,762

Other payable- related parties


4,239,675



3,382,337



548,911

Deferred revenue


3,381,382



4,326,473



702,133

Advances from customers


470,700



275,600



44,726

Accrued payroll and employees' welfare


1,992,783



389,443



63,202

Accrued expenses


488,730



246,113



39,942

Taxes payable


6,754,428



7,909,731



1,283,651

Short-term borrowings- related parties


5,503,279



200,000



32,458

Short-term borrowings- other


570,375



-



-

Warrants liability 


-



5,992,127



972,448

Total current liabilities


46,744,926



53,720,929



8,718,241










Commitments and Contingency


















Equity 









Common stock, ($ 0.0185 U.S. dollar par value, 25,000,000 shares authorized; 3,951,811 and 4,528,311 shares issued and outstanding as of June 30, 2013 and March 31, 2014, respectively)


529,979



595,335



96,613

Additional paid-in capital


69,516,447



78,669,718



12,767,120

Appropriated retained earnings


3,023,231



4,868,048



790,024

Unappropriated retained earnings


8,749,963



10,835,662



1,758,494

Accumulated other comprehensive loss


(293,201)



(326,126)



(52,925)

Total controlling shareholders' equity


81,526,419



94,642,637



15,359,326

Non-controlling interest


7,200,991



8,238,519



1,337,010

Total equity


88,727,410



102,881,156



16,696,336

Total Liabilities and Equity

RMB

135,472,336


RMB

156,602,085


$

25,414,577



















The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

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,



2013



2014


2014



2013



2014


2014



RMB



RMB


USD



RMB



RMB


USD



















Revenues


















Hardware and software

RMB

35,959,339


RMB

73,337,585


$

11,901,781


RMB

4,161,583


RMB

17,998,444


$

2,920,924

Service


20,567,637



477,769



77,536



62,678



80,180



13,012

Hardware and software - related parties


6,009,611



2,196,152



356,408



3,277,534



153,846



24,967

Total revenues


62,536,587



76,011,506



12,335,725



7,501,795



18,232,470



2,958,903



















Hardware and software

RMB

23,033,622


RMB

48,447,792


$

7,862,476


RMB

2,527,534


RMB

12,848,136


$

2,085,093

Service


15,743,234



77,107



12,514



20,620



42,161



6,842

Hardware and software - related parties


3,139,082



426,139



69,157



798,190



97,217



15,777

Total cost of revenues


41,915,938



48,951,038



7,944,147



3,346,344



12,987,514



2,107,712

Gross profit


20,620,649



27,060,468



4,391,578



4,155,451



5,244,956



851,191





































Selling and distribution expenses


4,693,193



4,701,989



763,075



1,790,199



1,097,549



178,119

General and administrative expenses


8,452,540



10,450,904



1,696,052



3,966,782



3,993,341



648,070

Research and development expenses


6,284,834



4,074,953



661,314



552,645



720,956



117,002

Operating expenses


19,430,567



19,227,846



3,120,441



6,309,626



5,811,846



943,191





































Income (loss) from operations


1,190,082



7,832,622



1,271,137



(2,154,175)



(566,890)



(92,000)



















Other income (expenses)


















Subsidy income


2,143,669



1,220,024



197,995



1,343,669



201,711



32,735

Interest income


443,391



296,997



48,199



137,803



92,027



14,935

Interest expense


(1,494,887)



(757,226)



(122,888)



(618,473)



(277,578)



(45,047)

Loss from investment


-



(870,627)



(141,292)



-



(135,547)



(21,998)

Change in fair value of warrants liability


-



(904,327)



(146,761)



-



(904,883)



(146,851)

Gain (loss) from foreign currency exchange


339,876



(88,080)



(14,294)



(185)



31,312



5,082

Other income (expense)


(19,158)



(143,498)



(23,288)



(109,881)



(99,552)



(16,156)



















Income (loss) before income tax


2,602,973



6,585,885



1,068,808



(1,401,242)



(1,659,400)



(269,300)

Provision for income tax


302,550



1,609,976



261,279



(152,382)



150,787



24,471

Net Income (loss)


2,300,423



4,975,909



807,529



(1,248,860)



(1,810,187)



(293,771)



















Less: Net income attributable to non-controlling interest


602,961



1,045,396



169,655



(2,127)



120,415



19,542

Net Income attributable to Recon Technology, Ltd

RMB

1,697,462


 RMB 

3,930,513


$

637,874


 RMB 

(1,246,733)


 RMB 

(1,930,602)


$

(313,313)



















Comprehensive income (loss)


















Net income 


2,300,423



4,975,909



807,529



(1,248,860)



(1,810,187)



(293,771)

Foreign currency translation adjustment


(16,889)



(40,833)



(6,627)



(717)



(118,110)



(19,168)

Comprehensive income (loss)


2,283,534



4,935,076



800,902



(1,249,577)



(1,928,297)



(312,939)

Less: Comprehensive income attributable to non-controlling interest


601,084



1,041,313



168,992



(2,207)



108,604



17,625

Comprehensive income (loss) attributable to Recon Technology, Ltd

RMB

1,682,450


 RMB 

3,893,763


$

631,910


 RMB 

(1,247,370)


 RMB 

(2,036,901)


$

(330,564)



















Earnings (loss) per common share - basic 

RMB

0.43


RMB

0.93


$

0.15


RMB

(0.32)


RMB

(0.43)


$

(0.07)

Earnings (loss) per common share - diluted

RMB

0.43


RMB

0.92


$

0.15


RMB

(0.32)


RMB

(0.43)


$

(0.07)

Weighted - average shares -basic 


3,951,811



4,211,785



4,211,785



3,951,811



4,528,311



4,528,311

Weighted - average shares -diluted


3,951,811



4,269,510



4,269,510



3,951,811



4,528,311



4,528,311



















The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

RECON TECHNOLOGY, LTD 

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS 











For the nine months ended March 31,


2013


2014


2014


RMB


RMB


U.S. Dollars










Cash flows from operating activities:









Net income 

RMB

2,300,423


RMB

4,975,909


$

807,529

Adjustments to reconcile net income to net cash provided by (used in) operating activities:









Depreciation


467,914



457,439



74,237

Loss from disposal of  equipment


26,845



67,587



10,969

Provision/(recovery of) for doubtful accounts


(82,420)



668,610



108,507

Share based compensation


1,358,726



1,660,144



269,421

Loss from investment


-



870,627



141,292

Deferred tax provision/(benefit)


12,363



(75,715)



(12,288)

Change in fair value of warrants liability


-



904,327



146,761

Restricked shares issued to consulting firm


-



407,972



66,209

Changes in operating assets and liabilities:









Trade accounts receivable


13,156,606



(17,127,239)



(2,779,539)

Trade accounts receivable-related parties


2,701,259



1,487,501



241,403

Notes receivable


-



2,578,855



418,516

Inventories


9,397,201



(8,823,683)



(1,431,974)

Other receivable, net


(4,641,896)



688,724



111,770

Other receivables related parties, net


(1,038,967)



77,697



12,609

Purchase advance, net


(5,597,453)



(5,325,269)



(864,225)

Purchase advance-related party, net


(300,500)



-



-

Tax recoverable


2,790,722



575,650



93,421

Prepaid expense


(274,350)



(580,144)



(94,150)

Trade accounts payable


(5,643,032)



6,211,777



1,008,094

Trade accounts payable-related parties


110,157



(3,994,718)



(648,293)

Other payables


(51,139)



(191,528)



(31,083)

Other payables-related parties


4,899,620



(857,338)



(139,135)

Deferred income


(155,169)



945,091



153,377

Advances from customers


244,996



(195,100)



(31,662)

Accrued payroll and employees' welfare


713,859



(1,603,340)



(260,202)

Accrued expenses


(133,253)



(242,617)



(39,374)

Taxes payable


(2,988,030)



1,155,303



187,491

Net cash provided by (used in) operating activities


17,274,482



(15,283,478)



(2,480,319)










Cash flows from investing activities:









Purchase of property and equipment


(676,504)



(258,922)



(42,020)

Proceeds from disposal of equipment


161,000



98,000



15,904

Net cash used in investing activities


(515,504)



(160,922)



(26,116)










Cash flows from financing activities:









Proceeds from short-term bank loans


8,350,000



18,500,000



3,002,321

Repayments of short-term bank loans


(21,652,952)



(12,870,000)



(2,088,641)

Proceeds from borrowings-related parties


3,658,102



-



-

Repayment of  short-term borrowings


(2,275,764)



(570,375)



(92,565)

Repayment of short-term borrowings-related parties


(2,232,477)



(5,303,279)



(860,656)

Proceeds from sale of common stock, net of issuance costs


-



12,132,882



1,969,016

Capital contribution in VIE


20,000



-



-

Net cash provided by (used in) financing activities


(14,133,091)



11,889,228



1,929,475










Effect of exchange rate fluctuation on cash and cash equivalents


293,521



68,669



11,143










Net increase (decrease) in cash and cash equivalents


2,919,408



(3,486,503)



(565,817)

Cash and cash equivalents at beginning of period


3,533,283



12,350,392



2,004,316

Cash and cash equivalents at end of period

RMB

6,452,691


RMB

8,863,889


$

1,438,499



















Supplemental cash flow information









Cash paid during the period for interest

RMB

1,356,581


RMB

952,125


$

154,518

Cash paid during the period for taxes

RMB

832,028


RMB

700,268


$

113,645










The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

Safe Harbor

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.

Company Contact
Liu Jia
Recon Technology, Ltd.
+86 (10) 84945799
info@recon.cn

Investors
Jimmy Caplan
Asia IR/PR
+1-512-329-9505
jimmy@asia-irpr.com

Media
Rick Eisenberg
Asia IR/PR
+1-212-496-6828
rick@asia-irpr.com

SOURCE Recon Technology, Ltd.


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