BEIJING, May 18, 2015 /PRNewswire/ -- Recon Technology, Ltd. (NASDAQ: RCON), ("Recon" or the "Company"), a leading independent oilfield services provider operating primarily in China, today reported its financial results for the third quarter of fiscal year 2015, which ended March 31, 2015.
Q3 FY2015 Financial Highlights:
-- Total revenues for the third quarter of FY2015 were RMB20.0 million
($3.3 million), an increase of 9.8% from the same period of FY2014.
-- Gross profit for the third quarter of FY2015 was RMB6.2 million ($1.0
million), an increase of 19.1% from the same period of FY2014. Gross
margin also expanded by 2.4 points to 31.2% for the third quarter of
FY2015 from 28.8% for the same period of FY2014.
-- Operating income was RMB0.4 million ($0.1 million) for the third quarter
of FY2015, compared to an operating loss of RMB0.6 million for the same
period of FY2014.
-- Net loss attributable to Recon for the third quarter of FY2015 was
RMB1.5 million ($0.2 million), or RMB0.32 ($0.05) loss per diluted
share, compared to RMB1.9 million, or RMB0.43 loss per diluted share,
for the same period of FY2014.
-- Adjusted EBITDA (non-GAAP) was RMB1.7 million ($0.3 million) for the
third quarter of FY2015, compared to RMB0.5 million for the same period
of FY2014.
-- Adjusted net income attributable to Recon was RMB1.3 million ($0.2
million), or RMB0.28 ($0.05) per diluted shares, for the third quarter
of FY2015, compared to adjusted net loss attributable to Recon of RMB0.1
million, or RMB0.03 loss per diluted share, for the same period of
FY2014.
Mr. Shenping Yin, Chairman and CEO of Recon stated, "It has been a challenging quarter for the oil and gas industry with the plunge in oil and gas prices continuing to put severe pressure on China's already-weak growth momentum, forcing many of our major customers to cut their CAPEX budget and to cancel or delay projects and thus hampering our efforts to carry out business plan. Despite these challenges, revenues increased by 9.8% from the same quarter last year while both gross and operating margins also improved from a year ago, thanks to solid contribution from our automation business as a result of our heightened sales and marketing effort."
Mr. Yin continued, "While we continue to face significant headwinds in the near term, we believe challenges can turn into potential opportunities for us as our competitors also struggle to stay afloat. With relatively light in assets, strong R&D capability, and deep industry connections forged by years of providing a wide range of hardware, software and service solutions to leading SOEs such as Sinopec and Petro China, in our view Recon is well prepared to withstand the challenges ahead."
Third Quarter FY2015 Financial Results
For the Three Months Ended March 31,
------------------------------------
2014 2015 2015 %
(thousands) RMB RMB USD Change
--- --- --- ------
Revenues 18,232 20,019 3,277 9.8%
Hardware and software 17,998 18,359 3,005 2.0%
Service 80 - - -100.0%
Hardware and software - related parties 154 1,660 272 979.0%
Gross margin 28.8% 31.2% 31.2% 2.4%
Operating (loss) margin -3.1% 2.0% 2.0% 5.1%
Net income (loss) attributable to RCON (1,931) (1,527) (250) NM
Diluted earnings per share (0.43) (0.32) (0.05) NM
----- ----- ----- ---
Revenues
For the three months ended March 31, 2015, total revenues increased by RMB1.8 million, or 9.8%, to RMB20.0 million ($3.3 million) from RMB18.2 million for the same period of last fiscal year. The increase in total revenues was mainly related to demand of our automation business from our related parties. Revenues from non-related parties hardware and software sales increased by RMB0.4 million, or 2.0%, to RMB18.4 million ($3.0 million) for the three months ended March 31, 2015, compared to RMB18.0 million for the same period of last fiscal year. Revenues from related-party hardware and software sales increased by RMB1.5 million, or 979.0%, to RMB1.7 million ($0.3 million) for the three months ended March 31, 2015, compared to RMB0.2 million for the same period of last fiscal year. We did not book revenues from our service business for the three months ended March 31, 2015, compared to RMB0.1 million for the same period of last fiscal year.
Gross profit and gross margin
Gross profit increased by RMB1.0 million, or 19.1%, to RMB6.2 million ($1.0 million) for the three months ended March 31, 2015 from RMB5.2 million for the same period of last fiscal year. Overall gross margin increased to 31.2% for the three months ended March 31, 2015 from 28.8% for the same period of last fiscal year. The increases in overall gross profit and gross margin were mainly related to our automation software business. Gross margins for hardware and software sales to non-related parties and related parties were 25.1% and 99.4% for the three months ended March 31, 2015, compared to 28.6% and 36.8% for the same period of last fiscal year, respectively. We did not book revenues for our service business for the three months ended March 31, 2015, compared to gross profit and gross margin for our service business of RMB0.04 million and 47.4%, respectively, for the same period of last fiscal year.
Operating income (loss) and operating (loss) margin
Selling and distribution expenses increased slightly by 1.1% to RMB1.1 million for the three months ended March 31, 2015. General and administrative expenses increased by RMB0.2 million, or 5.0%, to RMB4.2 million for the three months ended March 31, 2015 from RMB4.0 million for the same period of last fiscal year. Research and development expenses decreased by RMB0.2 million, or 24.5%, to RMB0.5 million for the three months ended March 31, 2015 from RMB0.7 million for the same period of last fiscal year. Total operating expenses were essentially unchanged at RMB5.8 million ($1.0 million) for the three months ended March 31, 2015.
Operating income of RMB0.4 million ($0.1 million) for the three months ended March 31, 2015 compared to operating loss of RMB0.6 million for the same period of last fiscal year. Operating margin was 2.0% for the three months ended March 31, 2015, compared to operating loss margin of 3.1% for the same period of last fiscal year.
Net loss
Net loss for the three months ended March 31, 2015 was RMB1.4 million ($0.2 million), compared to RMB1.8 million for the same period of last fiscal year. After deduction of non-controlling interest, net loss for our shareholders was RMB1.5 million ($0.3 million), or RMB0.32 ($0.05) loss per diluted share, for the three months ended March 31, 2015, compared to RMB1.9 million, or RMB0.43 loss per diluted share, for the same period of last fiscal year.
Non-GAAP Measures
For the Three Months Ended March 31,
------------------------------------
2014 2015 2015
(thousands) RMB RMB USD
--- --- ---
Net income (loss) (1,810) (1,416) (232)
Provision for income taxes 151 (181) (30)
Interest expenses and foreign currency adjustment 246 337 55
Change in fair value of warrants liability 905 9 2
Loss from investment 136 - -
Restricted shares issued for consulting services - 34 5
Loss from warrants redemption - 1,913 313
Stock compensation expense 765 909 149
Depreciation and amortization 156 95 16
Adjusted EBITDA 548 1,700 278
Net income (loss) attributable to RCON (1,931) (1,527) (250)
Change in fair value of warrants liability 905 9 2
Loss from investment 136 - -
Restricted shares issued for consulting services - 34 5
Loss from warrants redemption - 1,913 313
Stock compensation expense 765 909 149
Adjusted net income attributable to RCON (126) 1,337 219
Adjusted earnings (loss) per diluted share (0.03) 0.28 0.05
----- ---- ----
Adjusted EBITDA (non-GAAP), which we define as net income (loss) adjusted for income tax expense, interest expense, loss from investment, non-cash stock compensation expense, depreciation and amortization, was RMB1.7 million ($0.3 million) for the three months ended March 31, 2015, compared to RMB0.5 million for the same period of last fiscal year. Adjusted net income attributable to our shareholders was RMB1.3 million ($0.2 million), or RMB0.28 ($0.05) per diluted shares, for the three months ended March 31, 2015, compared to adjusted net loss attributable to our common shareholders of RMB0.1 million, or RMB0.03 loss per diluted share, for the same period of last fiscal year.
Year-to-Date (Nine Months) FY2015 Financial Results
For the Nine Months Ended March 31,
-----------------------------------
2014 2015 2015 %
(thousands) RMB RMB USD Change
--- --- --- ------
Revenues 76,012 45,652 7,473 -39.9%
Hardware and software 73,338 43,120 7,059 -41.2%
Service 478 104 17 -78.3%
Hardware and software - related parties 2,196 2,428 397 10.6%
Gross margin 35.6% 34.7% 34.7% -0.9%
Operating (loss) margin -25.3% -3.6% -3.6% 21.7%
Net income (loss) attributable to RCON 3,931 (363) (59) NM
Diluted earnings per share 0.92 (0.08) (0.01) NM
---- ----- ----- ---
Revenues
For the nine months ended March 31, 2015, total revenues decreased by RMB30.4 million ($5.0 million), or 39.9%, to RMB45.7 million ($7.5 million) from RMB76.0 million for the same period of last fiscal year as a result of weakness across all of our businesses, particularly during the first half of fiscal year 2015. Revenues from non-related party hardware and software sales decreased by RMB30.2 million, or 41.2%, to RMB43.1 million ($7.1 million) for the nine months ended March 31, 2015, compared to RMB73.3 million for the same period of last fiscal year. Revenues from related-party hardware and software sales increased by RMB0.2 million, or 10.6%, to RMB2.4 million ($0.4 million) for the nine months ended March 31, 2015, compared to RMB2.2 million for the same period of last fiscal year. Revenues from service decreased by RMB0.4 million, or 78.3%, to RMB0.1 million ($0.02 million) for the nine months ended March 31, 2015, compared to RMB0.5 million for the same period of last fiscal year.
Gross profit and gross margin
Gross profit decreased by RMB11.2 million, or 41.5%, to RMB15.8 million ($2.6 million) for the nine months ended March 31, 2015 from RMB27.1 million for the same period of last fiscal year. Overall gross margin decreased to 34.7% for the nine months ended March 31, 2015 from 35.6% for the same period of last fiscal year. The decreases in gross profit were across all of our businesses. Gross margins for hardware and software sales to non-related parties and related parties were 30.9% and 98.9% for the nine months ended March 31, 2015, compared to 33.9% and 80.6% for the same period of last fiscal year, respectively.
Operating income (loss) and operating (loss) margin
Selling and distribution expenses decreased by RMB1.6 million, or 34.8%, to RMB3.1 million for the nine months ended March 31, 2015 from RMB4.7 million for the same period of last fiscal year. General and administrative expenses increased by RMB1.5 million, or 14.7%, to RMB12.0 million for the nine months ended March 31, 2015 from RMB10.5 million for the same period of last fiscal year. Research and development expenses decreased by RMB1.6 million, or 40.0%, to RMB2.4 million for the nine months ended March 31, 2015 from RMB4.1 million for the same period of last fiscal year. Total operating expenses decreased by RMB1.7 million, or 9.0%, to RMB17.5 million ($2.9 million) for the nine months ended March 31, 2015 from RMB19.2 million for the same period of last fiscal year.
Operating loss was RMB1.7 million ($0.3 million) for the nine months ended March 31, 2015, compared to operating income of RMB7.8 million for the same period of last fiscal year. Operating loss margin was 3.6% for the nine months ended March 31, 2015, compared to operating margin of 10.3% for the same period of last fiscal year.
Net income (loss)
Net income for the nine months ended March 31, 2015 was RMB0.2 million ($0.03 million), compared to RMB5.0 million for the same period of last fiscal year. After deduction of non-controlling interest, net loss for our shareholders was RMB0.4 million ($0.06 million), or RMB0.08 ($0.01) loss per diluted share, for the nine months ended March 31, 2015, compared to net income attributable to our shareholders of RMB3.9 million, or RMB0.92 per diluted share, for the same period of last fiscal year.
Non-GAAP Measures
For the Nine Months Ended March 31,
-----------------------------------
2014 2015 2015
(thousands) RMB RMB USD
--- --- ---
Net income
(loss) 4,976 183 30
Provision for
income taxes 1,610 468 77
Interest
expenses and
foreign
currency
adjustment 845 827 135
Change in fair
value of
warrants
liability 904 (4,068) (666)
Loss from
investment 871 - -
Restricted
shares issued
for consulting
services 408 1,205 197
Loss from
warrants
redemption - 1,913 313
Stock
compensation
expense 1,660 2,024 331
Depreciation
and
amortization 457 369 60
Adjusted EBITDA 11,732 2,921 478
Net income
(loss)
attributable
to RCON 3,931 (363) (59)
Change in fair
value of
warrants
liability 904 (4,068) (666)
Loss from
investment 871 - -
Restricted
shares issued
for consulting
services 408 1,205 197
Loss from
warrants
redemption - 1,913 313
Stock
compensation
expense 1,660 2,023 331
Adjusted net
income
attributable
to RCON 7,774 710 116
Adjusted
earnings per
diluted share 1.81 0.15 0.02
---- ---- ----
Adjusted EBITDA (non-GAAP), which we define as net income (loss) adjusted for income tax expense, interest expense, loss from investment, non-cash stock compensation expense, depreciation and amortization, was RMB2.9 million ($0.5 million) for the nine months ended March 31, 2015, compared to RMB11.7 million for the same period of last fiscal year. Adjusted net income attributable to our shareholders was RMB0.7 million ($0.1 million), or RMB0.15 ($0.02) per diluted shares, for the nine months ended March 31, 2015, compared to RMB7.8 million, or RMB1.81 per diluted share, for the same period of last fiscal year.
Financial Position
As of March 31, 2015, the Company had cash and cash equivalents of RMB4.7 million ($0.8 million), short-term bank loans of RMB8.0 million ($1.3 million), and short-term loan to related parties of RMB10.2 million ($1.7 million), compared to RMB18.1 million, RMB10.0 million, and RMB5.2 million, respectively, at June 30, 2014. Working capital as of March 31, 2015 was RMB90.1 million ($14.7 million) as compared to RMB83.1 million at June 30, 2014. Net cash used in operating activities was RMB16.2 million ($2.7 million) for the nine months ended March 31, 2015, compared to RMB15.3 million for the same period of last fiscal year. Net cash used in investing activities was RMB0.2 million ($0.03 million) for the nine months ended March 31, 2015, essentially unchanged from a year ago. Net cash provided by financing activities was RMB3.0 million ($0.5 million) for the nine months ended March 31, 2015, compared to RMB11.9 million for the same period of last fiscal year. During the fiscal 2015 nine-month period, we repaid RMB2.0 million in short term bank loans and received RMB5.0 million net proceeds from a related party.
Recent Development
On February 18, 2015, the Company announced that it has signed an agreement with Aktobe Petroleum Machinery Co. Ltd., an affiliate of the Company's key customer -- Petro China, to jointly construct a pressure container technical service center for heating furnaces and separators in Kazakhstan.
On January 29, 2015, the Company held its annual general meeting of stockholders at which a majority of the Company's shareholders voted for: 1) an increase of authorized shares from 25 million to 75 million; 2) election of directors; 3) an approval of the Company's 2015 Equity Incentive Plan; and 4) the ratification of Friedman LLP as the Company's independent registered public accounting firm for FY2015 ending June 30, 2015.
About Recon
Recon Technology, Ltd. is China's first independent oil and gas field service company listed on NASDAQ (RCON). Closely working with leading global partners, Recon has achieved rapid growth supplying China's largest oil and gas exploration companies, including Sinopec and China National Petroleum Corporation, with advanced automated technologies, efficient gathering and transportation equipment and reservoir stimulation measures. The solutions Recon provides are aimed at increasing gas and petroleum extraction levels, reducing impurities, improving safety and lowering production costs. For additional information, please visit www.recon.cn.
Cautionary Statements
Statements made in this release with respect to Recon's current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Recon. Forward-looking statements include, but are not limited to, those statements using words such as "believe," "expect," "plans," "strategy," "prospects," "forecast," "estimate," "project," "anticipate," "aim," "intend," "seek," "may," "might," "could" or "should," and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management's assumptions, judgments and beliefs in light of the information currently available to it. Recon cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, 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. Therefore investors should not place undue reliance on such forward-looking statements. Actual results may differ significantly from those set forth in the forward-looking statements.
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:
Recon Technology, Ltd.
Tel: +86-10-8494-5799
Email: info@recon.cn
Web: http://www.recon.cn
Weitian Investor Relations
Tina Xiao
Tel: +1-917-609-0333
Email: tina.xiao@weitian-ir.com
RECON TECHNOLOGY, LTD
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, As of March 31, As of March 31,
-------------- --------------- ---------------
2014 2015 2015
---- ---- ----
ASSETS RMB RMB USD
--- --- ---
Current assets
Cash and cash equivalents 18,094,586 4,665,869 763,757
Notes receivable - 400,000 65,476
Trade accounts receivable, net 43,553,737 56,444,463 9,239,407
Trade accounts receivable -
related parties, net 7,479,298 4,860,821 795,669
Inventories, net 14,336,602 19,127,861 3,131,044
Other receivables, net 18,293,043 27,180,449 4,449,174
Other receivables -related
parties 1,414,433 - -
Purchase advances, net 25,759,065 22,870,397 3,743,660
Purchase advances -related
parties 394,034 394,034 64,500
Prepaid expenses 2,634,664 4,200,662 687,608
Prepaid expenses -related
parties 230,000 362,400 59,321
Deferred tax asset 1,209,961 1,260,442 206,322
--------- --------- -------
Total current assets 133,399,423 141,767,398 23,205,938
Property and equipment, net 1,321,538 1,273,521 208,463
Long-term trade accounts
receivable, net 14,545,865 2,381,016
Long-term trade accounts
receivable - related parties,
net 14,456,317 -
Long-term investment - - -
Long-term other receivable 5,353,104 3,394,731 555,684
--------- --------- -------
Total Assets 154,530,382 160,981,515 26,351,101
=========== =========== ==========
LIABILITIES AND EQUITY
Current liabilities
Short-term bank loans 10,000,000 8,000,000 1,309,522
Trade accounts payable 11,413,505 17,456,282 2,857,423
Other payables 1,765,079 1,199,015 196,267
Other payable - related parties 3,306,024 3,725,403 609,812
Deferred revenue 4,419,824 2,776,485 454,483
Advances from customers 801,385 395,600 64,756
Accrued payroll and employees'
welfare 417,624 309,558 50,672
Accrued expenses 203,051 356,980 58,435
Taxes payable 7,589,846 6,900,393 1,129,527
Short-term borrowings -
related parties 5,207,728 10,218,308 1,612,637
Deferred tax liability 180,186 180,186 29,495
Warrants liability 5,021,621 199,179 32,604
Total current liabilities 50,325,873 51,717,389 8,465,633
---------- ---------- ---------
Commitments and Contingency
Equity
Common stock, ($ 0.0185 U.S.
dollar par value, 25,000,000
shares authorized; 4,717,336
and 5,022,436 shares issued and
outstanding as of June 30, 2014
and March 31, 2015,
respectively) 616,865 651,495 106,641
Additional paid-in capital 83,061,058 87,906,399 14,389,419
Appropriated retained earnings 4,148,929 4,725,803 773,568
Unappropriated retained earnings 8,431,453 7,491,128 1,226,224
Accumulated other comprehensive
loss (279,275) (282,129) (46,183)
Total shareholders' equity 95,979,030 100,492,696 16,449,669
Non-controlling interest 8,225,479 8,771,430 1,435,799
--------- --------- ---------
Total equity 104,204,509 109,264,126 17,885,468
----------- ----------- ----------
Total Liabilities and Equity 154,530,382 160,981,515 26,514,791
=========== =========== ==========
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,
--------- ---------
2014 2015 2015 2014 2015 2015
---- ---- ---- ---- ---- ----
RMB RMB USD RMB RMB USD
--- --- --- --- --- ---
Revenues
Hardware and software 73,337,585 43,119,915 7,058,309 17,998,444 18,358,835 3,005,162
Service 477,769 103,774 16,987 80,180 - -
Hardware and software -related
parties 2,196,152 2,428,173 397,468 153,846 1,660,055 271,735
--------- ------- ------- --------- -------
Total revenues 76,011,506 45,651,862 7,472,764 18,232,470 20,018,890 3,276,897
---------- ---------- --------- ---------- ---------- ---------
Cost of revenues
Hardware and software 48,447,792 29,782,617 4,875,124 12,848,136 13,759,652 2,252,321
Service 77,107 - - 42,161 - -
Hardware and software -related
parties 426,139 27,161 4,446 97,217 10,399 1,702
------- ------ ----- ------ ------ -----
Total cost of revenues 48,951,038 29,809,778 4,879,570 12,987,514 13,770,051 2,254,023
---------- ----------
Gross profit 27,060,468 15,842,084 2,593,194 5,244,956 6,248,839 1,022,874
---------- ---------- --------- --------- --------- ---------
Selling and distribution expenses 4,701,989 3,065,098 501,727 1,097,549 1,109,838 181,670
General and administrative expenses 10,450,904 11,987,761 1,962,279 3,993,341 4,191,030 686,031
Research and development expenses 4,074,953 2,444,020 400,062 720,956 544,063 89,058
-------
Operating expenses 19,227,846 17,496,879 2,864,068 5,811,846 5,844,931 956,759
---------- ---------- --------- --------- --------- -------
Income (loss) from operations 7,832,622 (1,654,795) (270,874) (566,890) 403,908 66,115
--------- ---------- -------- -------- ------- ------
Other income (expenses)
Subsidy income 1,220,024 639,473 104,675 201,711 155,155 25,397
Interest income 296,997 225,701 36,945 92,027 68,233 11,169
Interest expense (757,226) (808,065) (132,272) (277,578) (339,109) (55,509)
Loss from investment (870,627) - - (135,547) - -
Change in fair value of warrants
liability (904,327) 4,068,329 665,946 (904,883) (9,188) (1,504)
Loss from foreign currency exchange (88,080) (19,081) (3,123) 31,312 1,799 294
Loss from warrants redemption - (1,913,262) (313,182) - (1,913,262) (313,182)
Other expense (143,498) 112,325 18,387 (99,552) 35,653 5,836
-------- ------- ------ ------- ------ -----
Income (loss) before income tax 6,585,885 650,625 106,502 (1,659,400) (1,596,811) (261,384)
Provision (benefit) for income tax 1,609,976 468,005 76,608 150,787 (180,927) (29,616)
------ ------- -------- -------
Net Income (loss) 4,975,909 182,620 29,894 (1,810,187) (1,415,884) (231,768)
Less: Net income attributable to
non-controlling interest 1,045,396 546,071 89,386 120,415 111,398 18,235
------ ------- ------- ------
Net Income (loss) attributable to
Recon Technology, Ltd 3,930,513 (363,451) (59,492) (1,930,602) (1,527,282) (250,003)
========= ======== ======= ========== ========== ========
Comprehensive income (loss)
Net income (loss) 4,975,909 182,620 29,894 (1,810,187) (1,415,884) (231,768)
Foreign currency translation
adjustment (40,833) (2,854) (467) (118,110) (7,580) (1,241)
------- ------ ---- -------- ------ ------
Comprehensive income (loss) 4,935,076 179,766 29,427 (1,928,297) (1,423,464) (233,009)
Less: Comprehensive income
attributable to non-controlling
interest 1,041,313 545,952 89,367 108,604 111,032 18,175
--------- ------- ------ ------- ------- ------
Comprehensive income (loss)
attributable to Recon Technology,
Ltd 3,893,763 (366,186) (59,940) (2,036,901) (1,534,496) (251,184)
========= ======== ======= ========== ========== ========
Earnings (loss) per common share -
basic 0.93 (0.08) (0.01) (0.43) (0.32) (0.05)
==== ===== ===== ===== ===== =====
Earnings (loss) per common share -
diluted 0.92 (0.08) (0.01) (0.43) (0.32) (0.05)
==== ===== ===== ===== ===== =====
Weighted - average shares - basic 4,211,785 4,773,803 4,757,112 4,528,311 4,839,004 4,839,004
========= ========= ========= ========= ========= =========
Weighted - average shares - diluted 4,269,510 4,773,803 4,757,112 4,528,311 4,839,004 4,839,004
========= ========= ========= ========= ========= =========
RECON TECHNOLOGY, LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the nine months ended
-------------------------
2014 2015 2015
---- ---- ----
RMB RMB USD
--- --- ---
Cash flows from
operating
activities:
Net income 4,975,909 182,620 29,894
Adjustments to
reconcile net income
to net cash used in
operating
activities:
Depreciation 457,439 369,284 60,448
Loss from disposal of
equipment 67,587 (149,504) (24,472)
Provision for
doubtful accounts 668,610 254,622 41,679
Share based
compensation 1,660,144 2,023,761 331,270
Loss from investment 870,627 - -
Deferred tax benefit (75,715) (50,481) (8,263)
Change in fair value
of warrants
liability 904,327 (4,068,329) (665,946)
Restricted shares
issued for services 407,972 1,204,903 197,231
Loss from warrants
redemption - 1,913,262 313,182
Changes in operating
assets and
liabilities:
Trade accounts
receivable (17,127,239) (29,115,292) (4,765,889)
Trade accounts
receivable -related
parties 1,487,501 18,681,051 3,057,906
Inventories (8,823,683) (4,791,259) (784,282)
Notes receivable 2,578,855 (400,000) (65,476)
Other receivable, net 688,724 (7,022,533) 1,149,521
Other receivables
related parties, net 77,697 1414,433 231,529
Purchase advance, net (5,325,269) 1,797,628 294,254
Tax recoverable 575,650 - -
Prepaid expense (580,144) (1,565,998) (256,339)
Prepaid expense -
related party, net - (132,400) (21,673)
Trade accounts
payable 6,211,777 6,042,777 989,144
Trade accounts
payable -related
parties (3,994,718) - -
Other payables (191,528) (566,064) 92,659
Other payables -
related parties (857,338) 419,379 68,648
Deferred income 945,091 (1,643,339) (268,999)
Advances from
customers (195,100) (405,785) (66,423)
Accrued payroll and
employees' welfare (1,603,340) (108,066) (17,689)
Accrued expenses (242,617) 185,433 30,354
Taxes payable 1,155,303 (689,453) (112,857)
Net cash used in
operating activities (15,283,478) (16,219,350) (2,654,949)
----------- ----------- ----------
Cash flows from
investing
activities:
Purchase of property
and equipment (258,922) (514,009) (84,138)
Proceeds from
disposal of
equipment 98,000 356,247 58,314
Net cash used in
investing activities (160,922) (157,762) (25,824)
-------- -------- -------
Cash flows from
financing
activities:
Proceeds from short-
term bank loans 18,500,000 - -
Repayments of short-
term bank loans (12,870,000) (2,000,000) (327,380)
Proceeds from short-
term borrowings -
related parties - 12,550,000 2,054,312
Repayment of short-
term borrowings (570,375) - -
Repayment of short-
term borrowings -
related parties (5,303,279) (7,550,000) (1,235,861)
Proceeds from sale of
common stock, net of
issuance costs 12,132,882 - -
Net cash provided by
financing activities 11,889,228 3,000,000 491,071
---------- --------- -------
Effect of exchange
rate fluctuation on
cash and cash
equivalents 68,669 (51,605) (8,449)
------ ------- ------
Net decrease in cash
and cash equivalents (3,486,503) (13,428,717) (2,198,151)
Cash and cash
equivalents at
beginning of period 12,350,392 18,094,586 2,961,908
---------- ---------- ---------
Cash and cash
equivalents at end
of period 8,863,889 4,665,869 763,757
========= ========= =======
Supplemental cash
flow information
Cash paid during the
period for interest 952,125 808,065 132,272
======= ======= =======
Cash paid during the
period for taxes 700,268 616,225 100,870
======= ======= =======
Non-cash investing
and financing
activities
Cancellation of prior
issuance of 40,625
shares of common
stock for
professional
services - (1,002,721) (164,136)
SOURCE Recon Technology, Ltd.
SOURCE: Recon Technology, Ltd.
Recon Technology, Ltd. Reports Fiscal Year 2015 Third Quarter Financial Results
PR Newswire
BEIJING, May 18, 2015
BEIJING, May 18, 2015 /PRNewswire/ -- Recon Technology, Ltd. (NASDAQ: RCON), ("Recon" or the "Company"), a leading independent oilfield services provider operating primarily in China, today reported its financial results for the third quarter of fiscal year 2015, which ended March 31, 2015.
Q3 FY2015 Financial Highlights:
- Total revenues for the third quarter of FY2015 were RMB20.0 million ($3.3 million), an increase of 9.8% from the same period of FY2014.
- Gross profit for the third quarter of FY2015 was RMB6.2 million ($1.0 million), an increase of 19.1% from the same period of FY2014. Gross margin also expanded by 2.4 points to 31.2% for the third quarter of FY2015 from 28.8% for the same period of FY2014.
- Operating income was RMB0.4 million ($0.1 million) for the third quarter of FY2015, compared to an operating loss of RMB0.6 million for the same period of FY2014.
- Net loss attributable to Recon for the third quarter of FY2015 was RMB1.5 million ($0.2 million), or RMB0.32 ($0.05) loss per diluted share, compared to RMB1.9 million, or RMB0.43 loss per diluted share, for the same period of FY2014.
- Adjusted EBITDA (non-GAAP) was RMB1.7 million ($0.3 million) for the third quarter of FY2015, compared to RMB0.5 million for the same period of FY2014.
- Adjusted net income attributable to Recon was RMB1.3 million ($0.2 million), or RMB0.28 ($0.05) per diluted shares, for the third quarter of FY2015, compared to adjusted net loss attributable to Recon of RMB0.1 million, or RMB0.03 loss per diluted share, for the same period of FY2014.
Mr. Shenping Yin, Chairman and CEO of Recon stated, "It has been a challenging quarter for the oil and gas industry with the plunge in oil and gas prices continuing to put severe pressure on China's already-weak growth momentum, forcing many of our major customers to cut their CAPEX budget and to cancel or delay projects and thus hampering our efforts to carry out business plan. Despite these challenges, revenues increased by 9.8% from the same quarter last year while both gross and operating margins also improved from a year ago, thanks to solid contribution from our automation business as a result of our heightened sales and marketing effort."
Mr. Yin continued, "While we continue to face significant headwinds in the near term, we believe challenges can turn into potential opportunities for us as our competitors also struggle to stay afloat. With relatively light in assets, strong R&D capability, and deep industry connections forged by years of providing a wide range of hardware, software and service solutions to leading SOEs such as Sinopec and Petro China, in our view Recon is well prepared to withstand the challenges ahead."
Third Quarter FY2015 Financial Results
|
For the Three Months Ended March 31, | |||||||||||
|
2014 |
2015 |
2015 |
% | ||||||||
|
(thousands) |
RMB |
RMB |
USD |
Change | |||||||
|
Revenues |
18,232 |
20,019 |
3,277 |
9.8% | |||||||
|
Hardware and software |
17,998 |
18,359 |
3,005 |
2.0% | |||||||
|
Service |
80 |
- |
- |
-100.0% | |||||||
|
Hardware and software - related parties |
154 |
1,660 |
272 |
979.0% | |||||||
|
Gross margin |
28.8% |
31.2% |
31.2% |
2.4% | |||||||
|
Operating (loss) margin |
-3.1% |
2.0% |
2.0% |
5.1% | |||||||
|
Net income (loss) attributable to RCON |
(1,931) |
(1,527) |
(250) |
NM | |||||||
|
Diluted earnings per share |
(0.43) |
(0.32) |
(0.05) |
NM | |||||||
Revenues
For the three months ended March 31, 2015, total revenues increased by RMB1.8 million, or 9.8%, to RMB20.0 million ($3.3 million) from RMB18.2 million for the same period of last fiscal year. The increase in total revenues was mainly related to demand of our automation business from our related parties. Revenues from non-related parties hardware and software sales increased by RMB0.4 million, or 2.0%, to RMB18.4 million ($3.0 million) for the three months ended March 31, 2015, compared to RMB18.0 million for the same period of last fiscal year. Revenues from related-party hardware and software sales increased by RMB1.5 million, or 979.0%, to RMB1.7 million ($0.3 million) for the three months ended March 31, 2015, compared to RMB0.2 million for the same period of last fiscal year. We did not book revenues from our service business for the three months ended March 31, 2015, compared to RMB0.1 million for the same period of last fiscal year.
Gross profit and gross margin
Gross profit increased by RMB1.0 million, or 19.1%, to RMB6.2 million ($1.0 million) for the three months ended March 31, 2015 from RMB5.2 million for the same period of last fiscal year. Overall gross margin increased to 31.2% for the three months ended March 31, 2015 from 28.8% for the same period of last fiscal year. The increases in overall gross profit and gross margin were mainly related to our automation software business. Gross margins for hardware and software sales to non-related parties and related parties were 25.1% and 99.4% for the three months ended March 31, 2015, compared to 28.6% and 36.8% for the same period of last fiscal year, respectively. We did not book revenues for our service business for the three months ended March 31, 2015, compared to gross profit and gross margin for our service business of RMB0.04 million and 47.4%, respectively, for the same period of last fiscal year.
Operating income (loss) and operating (loss) margin
Selling and distribution expenses increased slightly by 1.1% to RMB1.1 million for the three months ended March 31, 2015. General and administrative expenses increased by RMB0.2 million, or 5.0%, to RMB4.2 million for the three months ended March 31, 2015 from RMB4.0 million for the same period of last fiscal year. Research and development expenses decreased by RMB0.2 million, or 24.5%, to RMB0.5 million for the three months ended March 31, 2015 from RMB0.7 million for the same period of last fiscal year. Total operating expenses were essentially unchanged at RMB5.8 million ($1.0 million) for the three months ended March 31, 2015.
Operating income of RMB0.4 million ($0.1 million) for the three months ended March 31, 2015 compared to operating loss of RMB0.6 million for the same period of last fiscal year. Operating margin was 2.0% for the three months ended March 31, 2015, compared to operating loss margin of 3.1% for the same period of last fiscal year.
Net loss
Net loss for the three months ended March 31, 2015 was RMB1.4 million ($0.2 million), compared to RMB1.8 million for the same period of last fiscal year. After deduction of non-controlling interest, net loss for our shareholders was RMB1.5 million ($0.3 million), or RMB0.32 ($0.05) loss per diluted share, for the three months ended March 31, 2015, compared to RMB1.9 million, or RMB0.43 loss per diluted share, for the same period of last fiscal year.
Non-GAAP Measures
|
For the Three Months Ended March 31, | |||||||||
|
2014 |
2015 |
2015 | |||||||
|
(thousands) |
RMB |
RMB |
USD | ||||||
|
Net income (loss) |
(1,810) |
(1,416) |
(232) | ||||||
|
Provision for income taxes |
151 |
(181) |
(30) | ||||||
|
Interest expenses and foreign currency adjustment |
246 |
337 |
55 | ||||||
|
Change in fair value of warrants liability |
905 |
9 |
2 | ||||||
|
Loss from investment |
136 |
- |
- | ||||||
|
Restricted shares issued for consulting services |
- |
34 |
5 | ||||||
|
Loss from warrants redemption |
- |
1,913 |
313 | ||||||
|
Stock compensation expense |
765 |
909 |
149 | ||||||
|
Depreciation and amortization |
156 |
95 |
16 | ||||||
|
Adjusted EBITDA |
548 |
1,700 |
278 | ||||||
|
Net income (loss) attributable to RCON |
(1,931) |
(1,527) |
(250) | ||||||
|
Change in fair value of warrants liability |
905 |
9 |
2 | ||||||
|
Loss from investment |
136 |
- |
- | ||||||
|
Restricted shares issued for consulting services |
- |
34 |
5 | ||||||
|
Loss from warrants redemption |
- |
1,913 |
313 | ||||||
|
Stock compensation expense |
765 |
909 |
149 | ||||||
|
Adjusted net income attributable to RCON |
(126) |
1,337 |
219 | ||||||
|
Adjusted earnings (loss) per diluted share |
(0.03) |
0.28 |
0.05 | ||||||
Adjusted EBITDA (non-GAAP), which we define as net income (loss) adjusted for income tax expense, interest expense, loss from investment, non-cash stock compensation expense, depreciation and amortization, was RMB1.7 million ($0.3 million) for the three months ended March 31, 2015, compared to RMB0.5 million for the same period of last fiscal year. Adjusted net income attributable to our shareholders was RMB1.3 million ($0.2 million), or RMB0.28 ($0.05) per diluted shares, for the three months ended March 31, 2015, compared to adjusted net loss attributable to our common shareholders of RMB0.1 million, or RMB0.03 loss per diluted share, for the same period of last fiscal year.
Year-to-Date (Nine Months) FY2015 Financial Results
|
For the Nine Months Ended March 31, | |||||||||||
|
2014 |
2015 |
2015 |
% | ||||||||
|
(thousands) |
RMB |
RMB |
USD |
Change | |||||||
|
Revenues |
76,012 |
45,652 |
7,473 |
-39.9% | |||||||
|
Hardware and software |
73,338 |
43,120 |
7,059 |
-41.2% | |||||||
|
Service |
478 |
104 |
17 |
-78.3% | |||||||
|
Hardware and software - related parties |
2,196 |
2,428 |
397 |
10.6% | |||||||
|
Gross margin |
35.6% |
34.7% |
34.7% |
-0.9% | |||||||
|
Operating (loss) margin |
-25.3% |
-3.6% |
-3.6% |
21.7% | |||||||
|
Net income (loss) attributable to RCON |
3,931 |
(363) |
(59) |
NM | |||||||
|
Diluted earnings per share |
0.92 |
(0.08) |
(0.01) |
NM | |||||||
Revenues
For the nine months ended March 31, 2015, total revenues decreased by RMB30.4 million ($5.0 million), or 39.9%, to RMB45.7 million ($7.5 million) from RMB76.0 million for the same period of last fiscal year as a result of weakness across all of our businesses, particularly during the first half of fiscal year 2015. Revenues from non-related party hardware and software sales decreased by RMB30.2 million, or 41.2%, to RMB43.1 million ($7.1 million) for the nine months ended March 31, 2015, compared to RMB73.3 million for the same period of last fiscal year. Revenues from related-party hardware and software sales increased by RMB0.2 million, or 10.6%, to RMB2.4 million ($0.4 million) for the nine months ended March 31, 2015, compared to RMB2.2 million for the same period of last fiscal year. Revenues from service decreased by RMB0.4 million, or 78.3%, to RMB0.1 million ($0.02 million) for the nine months ended March 31, 2015, compared to RMB0.5 million for the same period of last fiscal year.
Gross profit and gross margin
Gross profit decreased by RMB11.2 million, or 41.5%, to RMB15.8 million ($2.6 million) for the nine months ended March 31, 2015 from RMB27.1 million for the same period of last fiscal year. Overall gross margin decreased to 34.7% for the nine months ended March 31, 2015 from 35.6% for the same period of last fiscal year. The decreases in gross profit were across all of our businesses. Gross margins for hardware and software sales to non-related parties and related parties were 30.9% and 98.9% for the nine months ended March 31, 2015, compared to 33.9% and 80.6% for the same period of last fiscal year, respectively.
Operating income (loss) and operating (loss) margin
Selling and distribution expenses decreased by RMB1.6 million, or 34.8%, to RMB3.1 million for the nine months ended March 31, 2015 from RMB4.7 million for the same period of last fiscal year. General and administrative expenses increased by RMB1.5 million, or 14.7%, to RMB12.0 million for the nine months ended March 31, 2015 from RMB10.5 million for the same period of last fiscal year. Research and development expenses decreased by RMB1.6 million, or 40.0%, to RMB2.4 million for the nine months ended March 31, 2015 from RMB4.1 million for the same period of last fiscal year. Total operating expenses decreased by RMB1.7 million, or 9.0%, to RMB17.5 million ($2.9 million) for the nine months ended March 31, 2015 from RMB19.2 million for the same period of last fiscal year.
Operating loss was RMB1.7 million ($0.3 million) for the nine months ended March 31, 2015, compared to operating income of RMB7.8 million for the same period of last fiscal year. Operating loss margin was 3.6% for the nine months ended March 31, 2015, compared to operating margin of 10.3% for the same period of last fiscal year.
Net income (loss)
Net income for the nine months ended March 31, 2015 was RMB0.2 million ($0.03 million), compared to RMB5.0 million for the same period of last fiscal year. After deduction of non-controlling interest, net loss for our shareholders was RMB0.4 million ($0.06 million), or RMB0.08 ($0.01) loss per diluted share, for the nine months ended March 31, 2015, compared to net income attributable to our shareholders of RMB3.9 million, or RMB0.92 per diluted share, for the same period of last fiscal year.
Non-GAAP Measures
|
For the Nine Months Ended March 31, | |||||||||
|
2014 |
2015 |
2015 | |||||||
|
(thousands) |
RMB |
RMB |
USD | ||||||
|
Net income (loss) |
4,976 |
183 |
30 | ||||||
|
Provision for income taxes |
1,610 |
468 |
77 | ||||||
|
Interest expenses and foreign currency adjustment |
845 |
827 |
135 | ||||||
|
Change in fair value of warrants liability |
904 |
(4,068) |
(666) | ||||||
|
Loss from investment |
871 |
- |
- | ||||||
|
Restricted shares issued for consulting services |
408 |
1,205 |
197 | ||||||
|
Loss from warrants redemption |
- |
1,913 |
313 | ||||||
|
Stock compensation expense |
1,660 |
2,024 |
331 | ||||||
|
Depreciation and amortization |
457 |
369 |
60 | ||||||
|
Adjusted EBITDA |
11,732 |
2,921 |
478 | ||||||
|
Net income (loss) attributable to RCON |
3,931 |
(363) |
(59) | ||||||
|
Change in fair value of warrants liability |
904 |
(4,068) |
(666) | ||||||
|
Loss from investment |
871 |
- |
- | ||||||
|
Restricted shares issued for consulting services |
408 |
1,205 |
197 | ||||||
|
Loss from warrants redemption |
- |
1,913 |
313 | ||||||
|
Stock compensation expense |
1,660 |
2,023 |
331 | ||||||
|
Adjusted net income attributable to RCON |
7,774 |
710 |
116 | ||||||
|
Adjusted earnings per diluted share |
1.81 |
0.15 |
0.02 | ||||||
Adjusted EBITDA (non-GAAP), which we define as net income (loss) adjusted for income tax expense, interest expense, loss from investment, non-cash stock compensation expense, depreciation and amortization, was RMB2.9 million ($0.5 million) for the nine months ended March 31, 2015, compared to RMB11.7 million for the same period of last fiscal year. Adjusted net income attributable to our shareholders was RMB0.7 million ($0.1 million), or RMB0.15 ($0.02) per diluted shares, for the nine months ended March 31, 2015, compared to RMB7.8 million, or RMB1.81 per diluted share, for the same period of last fiscal year.
Financial Position
As of March 31, 2015, the Company had cash and cash equivalents of RMB4.7 million ($0.8 million), short-term bank loans of RMB8.0 million ($1.3 million), and short-term loan to related parties of RMB10.2 million ($1.7 million), compared to RMB18.1 million, RMB10.0 million, and RMB5.2 million, respectively, at June 30, 2014. Working capital as of March 31, 2015 was RMB90.1 million ($14.7 million) as compared to RMB83.1 million at June 30, 2014. Net cash used in operating activities was RMB16.2 million ($2.7 million) for the nine months ended March 31, 2015, compared to RMB15.3 million for the same period of last fiscal year. Net cash used in investing activities was RMB0.2 million ($0.03 million) for the nine months ended March 31, 2015, essentially unchanged from a year ago. Net cash provided by financing activities was RMB3.0 million ($0.5 million) for the nine months ended March 31, 2015, compared to RMB11.9 million for the same period of last fiscal year. During the fiscal 2015 nine-month period, we repaid RMB2.0 million in short term bank loans and received RMB5.0 million net proceeds from a related party.
Recent Development
On February 18, 2015, the Company announced that it has signed an agreement with Aktobe Petroleum Machinery Co. Ltd., an affiliate of the Company's key customer -- Petro China, to jointly construct a pressure container technical service center for heating furnaces and separators in Kazakhstan.
On January 29, 2015, the Company held its annual general meeting of stockholders at which a majority of the Company's shareholders voted for: 1) an increase of authorized shares from 25 million to 75 million; 2) election of directors; 3) an approval of the Company's 2015 Equity Incentive Plan; and 4) the ratification of Friedman LLP as the Company's independent registered public accounting firm for FY2015 ending June 30, 2015.
About Recon
Recon Technology, Ltd. is China's first independent oil and gas field service company listed on NASDAQ (RCON). Closely working with leading global partners, Recon has achieved rapid growth supplying China's largest oil and gas exploration companies, including Sinopec and China National Petroleum Corporation, with advanced automated technologies, efficient gathering and transportation equipment and reservoir stimulation measures. The solutions Recon provides are aimed at increasing gas and petroleum extraction levels, reducing impurities, improving safety and lowering production costs. For additional information, please visit www.recon.cn.
Cautionary Statements
Statements made in this release with respect to Recon's current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Recon. Forward-looking statements include, but are not limited to, those statements using words such as "believe," "expect," "plans," "strategy," "prospects," "forecast," "estimate," "project," "anticipate," "aim," "intend," "seek," "may," "might," "could" or "should," and words of similar meaning in connection with a discussion of future operations, financial performance, events or conditions. From time to time, oral or written forward-looking statements may also be included in other materials released to the public. These statements are based on management's assumptions, judgments and beliefs in light of the information currently available to it. Recon cautions investors that a number of important risks and uncertainties could cause actual results to differ materially from those discussed in the forward-looking statements, 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. Therefore investors should not place undue reliance on such forward-looking statements. Actual results may differ significantly from those set forth in the forward-looking statements.
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:
Recon Technology, Ltd.
Tel: +86-10-8494-5799
Email: info@recon.cn
Web: http://www.recon.cn
Weitian Investor Relations
Tina Xiao
Tel: +1-917-609-0333
Email: tina.xiao@weitian-ir.com
|
RECON TECHNOLOGY, LTD | ||||||||
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
|
As of June 30, |
As of March 31, |
As of March 31, | ||||||
|
2014 |
2015 |
2015 | ||||||
|
ASSETS |
RMB |
RMB |
USD | |||||
|
Current assets |
||||||||
|
Cash and cash equivalents |
18,094,586 |
4,665,869 |
763,757 | |||||
|
Notes receivable |
- |
400,000 |
65,476 | |||||
|
Trade accounts receivable, net |
43,553,737 |
56,444,463 |
9,239,407 | |||||
|
Trade accounts receivable - related parties, net |
7,479,298 |
4,860,821 |
795,669 | |||||
|
Inventories, net |
14,336,602 |
19,127,861 |
3,131,044 | |||||
|
Other receivables, net |
18,293,043 |
27,180,449 |
4,449,174 | |||||
|
Other receivables - related parties |
1,414,433 |
- |
- | |||||
|
Purchase advances, net |
25,759,065 |
22,870,397 |
3,743,660 | |||||
|
Purchase advances - related parties |
394,034 |
394,034 |
64,500 | |||||
|
Prepaid expenses |
2,634,664 |
4,200,662 |
687,608 | |||||
|
Prepaid expenses - related parties |
230,000 |
362,400 |
59,321 | |||||
|
Deferred tax asset |
1,209,961 |
1,260,442 |
206,322 | |||||
|
Total current assets |
133,399,423 |
141,767,398 |
23,205,938 | |||||
|
Property and equipment, net |
1,321,538 |
1,273,521 |
208,463 | |||||
|
Long-term trade accounts receivable, net |
14,545,865 |
2,381,016 | ||||||
|
Long-term trade accounts receivable - related parties, net |
14,456,317 |
- | ||||||
|
Long-term investment |
- |
- |
- | |||||
|
Long-term other receivable |
5,353,104 |
3,394,731 |
555,684 | |||||
|
Total Assets |
154,530,382 |
160,981,515 |
26,351,101 | |||||
|
LIABILITIES AND EQUITY |
||||||||
|
Current liabilities |
||||||||
|
Short-term bank loans |
10,000,000 |
8,000,000 |
1,309,522 | |||||
|
Trade accounts payable |
11,413,505 |
17,456,282 |
2,857,423 | |||||
|
Other payables |
1,765,079 |
1,199,015 |
196,267 | |||||
|
Other payable - related parties |
3,306,024 |
3,725,403 |
609,812 | |||||
|
Deferred revenue |
4,419,824 |
2,776,485 |
454,483 | |||||
|
Advances from customers |
801,385 |
395,600 |
64,756 | |||||
|
Accrued payroll and employees' welfare |
417,624 |
309,558 |
50,672 | |||||
|
Accrued expenses |
203,051 |
356,980 |
58,435 | |||||
|
Taxes payable |
7,589,846 |
6,900,393 |
1,129,527 | |||||
|
Short-term borrowings - related parties |
5,207,728 |
10,218,308 |
1,612,637 | |||||
|
Deferred tax liability |
180,186 |
180,186 |
29,495 | |||||
|
Warrants liability |
5,021,621 |
199,179 |
32,604 | |||||
|
Total current liabilities |
50,325,873 |
51,717,389 |
8,465,633 | |||||
|
Commitments and Contingency |
||||||||
|
Equity |
||||||||
|
Common stock, ($ 0.0185 U.S. dollar par value, 25,000,000 shares authorized; 4,717,336 and 5,022,436 shares issued and outstanding as of June 30, 2014 and March 31, 2015, respectively) |
616,865 |
651,495 |
106,641 | |||||
|
Additional paid-in capital |
83,061,058 |
87,906,399 |
14,389,419 | |||||
|
Appropriated retained earnings |
4,148,929 |
4,725,803 |
773,568 | |||||
|
Unappropriated retained earnings |
8,431,453 |
7,491,128 |
1,226,224 | |||||
|
Accumulated other comprehensive loss |
(279,275) |
(282,129) |
(46,183) | |||||
|
Total shareholders' equity |
95,979,030 |
100,492,696 |
16,449,669 | |||||
|
Non-controlling interest |
8,225,479 |
8,771,430 |
1,435,799 | |||||
|
Total equity |
104,204,509 |
109,264,126 |
17,885,468 | |||||
|
Total Liabilities and Equity |
154,530,382 |
160,981,515 |
26,514,791 | |||||
|
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, | ||||||||||||||||
|
2014 |
2015 |
2015 |
2014 |
2015 |
2015 | ||||||||||||
|
RMB |
RMB |
USD |
RMB |
RMB |
USD | ||||||||||||
|
Revenues |
|||||||||||||||||
|
Hardware and software |
73,337,585 |
43,119,915 |
7,058,309 |
17,998,444 |
18,358,835 |
3,005,162 | |||||||||||
|
Service |
477,769 |
103,774 |
16,987 |
80,180 |
- |
- | |||||||||||
|
Hardware and software - related parties |
2,196,152 |
2,428,173 |
397,468 |
153,846 |
1,660,055 |
271,735 | |||||||||||
|
Total revenues |
76,011,506 |
45,651,862 |
7,472,764 |
18,232,470 |
20,018,890 |
3,276,897 | |||||||||||
|
Cost of revenues |
|||||||||||||||||
|
Hardware and software |
48,447,792 |
29,782,617 |
4,875,124 |
12,848,136 |
13,759,652 |
2,252,321 | |||||||||||
|
Service |
77,107 |
- |
- |
42,161 |
- |
- | |||||||||||
|
Hardware and software - related parties |
426,139 |
27,161 |
4,446 |
97,217 |
10,399 |
1,702 | |||||||||||
|
Total cost of revenues |
48,951,038 |
29,809,778 |
4,879,570 |
12,987,514 |
13,770,051 |
2,254,023 | |||||||||||
|
Gross profit |
27,060,468 |
15,842,084 |
2,593,194 |
5,244,956 |
6,248,839 |
1,022,874 | |||||||||||
|
Selling and distribution expenses |
4,701,989 |
3,065,098 |
501,727 |
1,097,549 |
1,109,838 |
181,670 | |||||||||||
|
General and administrative expenses |
10,450,904 |
11,987,761 |
1,962,279 |
3,993,341 |
4,191,030 |
686,031 | |||||||||||
|
Research and development expenses |
4,074,953 |
2,444,020 |
400,062 |
720,956 |
544,063 |
89,058 | |||||||||||
|
Operating expenses |
19,227,846 |
17,496,879 |
2,864,068 |
5,811,846 |
5,844,931 |
956,759 | |||||||||||
|
Income (loss) from operations |
7,832,622 |
(1,654,795) |
(270,874) |
(566,890) |
403,908 |
66,115 | |||||||||||
|
Other income (expenses) |
|||||||||||||||||
|
Subsidy income |
1,220,024 |
639,473 |
104,675 |
201,711 |
155,155 |
25,397 | |||||||||||
|
Interest income |
296,997 |
225,701 |
36,945 |
92,027 |
68,233 |
11,169 | |||||||||||
|
Interest expense |
(757,226) |
(808,065) |
(132,272) |
(277,578) |
(339,109) |
(55,509) | |||||||||||
|
Loss from investment |
(870,627) |
- |
- |
(135,547) |
- |
- | |||||||||||
|
Change in fair value of warrants liability |
(904,327) |
4,068,329 |
665,946 |
(904,883) |
(9,188) |
(1,504) | |||||||||||
|
Loss from foreign currency exchange |
(88,080) |
(19,081) |
(3,123) |
31,312 |
1,799 |
294 | |||||||||||
|
Loss from warrants redemption |
- |
(1,913,262) |
(313,182) |
- |
(1,913,262) |
(313,182) | |||||||||||
|
Other expense |
(143,498) |
112,325 |
18,387 |
(99,552) |
35,653 |
5,836 | |||||||||||
|
Income (loss) before income tax |
6,585,885 |
650,625 |
106,502 |
(1,659,400) |
(1,596,811) |
(261,384) | |||||||||||
|
Provision (benefit) for income tax |
1,609,976 |
468,005 |
76,608 |
150,787 |
(180,927) |
(29,616) | |||||||||||
|
Net Income (loss) |
4,975,909 |
182,620 |
29,894 |
(1,810,187) |
(1,415,884) |
(231,768) | |||||||||||
|
Less: Net income attributable to non-controlling interest |
1,045,396 |
546,071 |
89,386 |
120,415 |
111,398 |
18,235 | |||||||||||
|
Net Income (loss) attributable to Recon Technology, Ltd |
3,930,513 |
(363,451) |
(59,492) |
(1,930,602) |
(1,527,282) |
(250,003) | |||||||||||
|
Comprehensive income (loss) |
|||||||||||||||||
|
Net income (loss) |
4,975,909 |
182,620 |
29,894 |
(1,810,187) |
(1,415,884) |
(231,768) | |||||||||||
|
Foreign currency translation adjustment |
(40,833) |
(2,854) |
(467) |
(118,110) |
(7,580) |
(1,241) | |||||||||||
|
Comprehensive income (loss) |
4,935,076 |
179,766 |
29,427 |
(1,928,297) |
(1,423,464) |
(233,009) | |||||||||||
|
Less: Comprehensive income attributable to non-controlling interest |
1,041,313 |
545,952 |
89,367 |
108,604 |
111,032 |
18,175 | |||||||||||
|
Comprehensive income (loss) attributable to Recon Technology, Ltd |
3,893,763 |
(366,186) |
(59,940) |
(2,036,901) |
(1,534,496) |
(251,184) | |||||||||||
|
Earnings (loss) per common share - basic |
0.93 |
(0.08) |
(0.01) |
(0.43) |
(0.32) |
(0.05) | |||||||||||
|
Earnings (loss) per common share - diluted |
0.92 |
(0.08) |
(0.01) |
(0.43) |
(0.32) |
(0.05) | |||||||||||
|
Weighted - average shares - basic |
4,211,785 |
4,773,803 |
4,757,112 |
4,528,311 |
4,839,004 |
4,839,004 | |||||||||||
|
Weighted - average shares - diluted |
4,269,510 |
4,773,803 |
4,757,112 |
4,528,311 |
4,839,004 |
4,839,004 | |||||||||||
|
RECON TECHNOLOGY, LTD | ||||||||
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
|
For the nine months ended | ||||||||
|
2014 |
2015 |
2015 | ||||||
|
RMB |
RMB |
USD | ||||||
|
Cash flows from operating activities: |
||||||||
|
Net income |
4,975,909 |
182,620 |
29,894 | |||||
|
Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
|
Depreciation |
457,439 |
369,284 |
60,448 | |||||
|
Loss from disposal of equipment |
67,587 |
(149,504) |
(24,472) | |||||
|
Provision for doubtful accounts |
668,610 |
254,622 |
41,679 | |||||
|
Share based compensation |
1,660,144 |
2,023,761 |
331,270 | |||||
|
Loss from investment |
870,627 |
- |
- | |||||
|
Deferred tax benefit |
(75,715) |
(50,481) |
(8,263) | |||||
|
Change in fair value of warrants liability |
904,327 |
(4,068,329) |
(665,946) | |||||
|
Restricted shares issued for services |
407,972 |
1,204,903 |
197,231 | |||||
|
Loss from warrants redemption |
- |
1,913,262 |
313,182 | |||||
|
Changes in operating assets and liabilities: |
||||||||
|
Trade accounts receivable |
(17,127,239) |
(29,115,292) |
(4,765,889) | |||||
|
Trade accounts receivable - related parties |
1,487,501 |
18,681,051 |
3,057,906 | |||||
|
Inventories |
(8,823,683) |
(4,791,259) |
(784,282) | |||||
|
Notes receivable |
2,578,855 |
(400,000) |
(65,476) | |||||
|
Other receivable, net |
688,724 |
(7,022,533) |
1,149,521 | |||||
|
Other receivables related parties, net |
77,697 |
1414,433 |
231,529 | |||||
|
Purchase advance, net |
(5,325,269) |
1,797,628 |
294,254 | |||||
|
Tax recoverable |
575,650 |
- |
- | |||||
|
Prepaid expense |
(580,144) |
(1,565,998) |
(256,339) | |||||
|
Prepaid expense - related party, net |
- |
(132,400) |
(21,673) | |||||
|
Trade accounts payable |
6,211,777 |
6,042,777 |
989,144 | |||||
|
Trade accounts payable - related parties |
(3,994,718) |
- |
- | |||||
|
Other payables |
(191,528) |
(566,064) |
92,659 | |||||
|
Other payables - related parties |
(857,338) |
419,379 |
68,648 | |||||
|
Deferred income |
945,091 |
(1,643,339) |
(268,999) | |||||
|
Advances from customers |
(195,100) |
(405,785) |
(66,423) | |||||
|
Accrued payroll and employees' welfare |
(1,603,340) |
(108,066) |
(17,689) | |||||
|
Accrued expenses |
(242,617) |
185,433 |
30,354 | |||||
|
Taxes payable |
1,155,303 |
(689,453) |
(112,857) | |||||
|
Net cash used in operating activities |
(15,283,478) |
(16,219,350) |
(2,654,949) | |||||
|
Cash flows from investing activities: |
||||||||
|
Purchase of property and equipment |
(258,922) |
(514,009) |
(84,138) | |||||
|
Proceeds from disposal of equipment |
98,000 |
356,247 |
58,314 | |||||
|
Net cash used in investing activities |
(160,922) |
(157,762) |
(25,824) | |||||
|
Cash flows from financing activities: |
||||||||
|
Proceeds from short-term bank loans |
18,500,000 |
- |
- | |||||
|
Repayments of short-term bank loans |
(12,870,000) |
(2,000,000) |
(327,380) | |||||
|
Proceeds from short-term borrowings - related parties |
- |
12,550,000 |
2,054,312 | |||||
|
Repayment of short-term borrowings |
(570,375) |
- |
- | |||||
|
Repayment of short-term borrowings - related parties |
(5,303,279) |
(7,550,000) |
(1,235,861) | |||||
|
Proceeds from sale of common stock, net of issuance costs |
12,132,882 |
- |
- | |||||
|
Net cash provided by financing activities |
11,889,228 |
3,000,000 |
491,071 | |||||
|
Effect of exchange rate fluctuation on cash and cash equivalents |
68,669 |
(51,605) |
(8,449) | |||||
|
Net decrease in cash and cash equivalents |
(3,486,503) |
(13,428,717) |
(2,198,151) | |||||
|
Cash and cash equivalents at beginning of period |
12,350,392 |
18,094,586 |
2,961,908 | |||||
|
Cash and cash equivalents at end of period |
8,863,889 |
4,665,869 |
763,757 | |||||
|
Supplemental cash flow information |
||||||||
|
Cash paid during the period for interest |
952,125 |
808,065 |
132,272 | |||||
|
Cash paid during the period for taxes |
700,268 |
616,225 |
100,870 | |||||
|
Non-cash investing and financing activities |
||||||||
|
Cancellation of prior issuance of 40,625 shares of common stock for professional services |
- |
(1,002,721) |
(164,136) | |||||
SOURCE Recon Technology, Ltd.
Web Site: http://www.recon.cn