BEIJING, Feb. 13, 2015 /PRNewswire/ -- Recon Technology, Ltd. (NASDAQ: RCON), ("Recon" or the "Company"), a leading independent oilfield services provider operating primarily in China, today reported its operating results for the second quarter of fiscal year 2015, which ended December 31, 2014.
Mr. Sheping Yin, Chairman and CEO of Recon stated, "Affected by the lower oil and gas price worldwide and decreased CAPEX expense of our clients, some of our projects are postponed or cancelled, and our financial performance for the first half year of fiscal 2015 may not be satisfactory. Overall, based on our reported revenue in this second quarter, our performance this quarter improved significantly compared to last quarter. The dollar amount of our current contracts on hand and actual onsite workload also increased significantly during this quarter. As such, our management continue to be optimistic for the coming year. We believe that the continued decline of oil and gas prices stimulated oil companies' demand for technology and better production management for producing wells, which is exactly the focus of our business. We believe this is a great opportunity for us and our years of investment in R&D are paying off. We remain optimistic aboutour future growth."
Three Month Financial Highlights
For the second quarter ended December, 31, 2014:
-- Revenues declined 53.9% to $3.5 million from $7.5 million(*) in the
second fiscal quarter last year due to projects delay or cancellation.
Nevertheless, management believe customer interest in Recon products and
technology remain strong.
-- Net income attributable to Recon (U.S. GAAP) was $0.9 million, compared
with net income of approximately $1.0 million* a year earlier.
-- With the decline in revenues, adjusted net income attributable to Recon
(non-U.S. GAAP)** declined to approximately $0.3 million from
approximately $1.2 million* in the same period last year.
-- Adjusted EBIDTA (non-U.S. GAAP) decreased year over year from
approximately $1.6 million* in the second quarter of FY 2014 to
approximately $0.6 million in second quarter of FY 2015.
-- Diluted EPS (U.S. GAAP) was $0.18 per share in the second quarter of FY
2015, compared with $0.22 per share in the second quarter of FY2014.
-- Adjusted diluted EPS** (non-U. S. GAAP) was $0.07 compared with $0.27 in
the second quarter a year ago.
* Based on the exchange
rate of RMB 6.1385 to US
$1.00.
** Non-U.S. GAAP adjusted
net income (loss) and EPS
exclude certain special
non-cash after tax
income totaling $0.5
million, or $0.11 per
share that is included in
net income.
Six Month Financial Highlights
For the six-month period ended December, 31, 2014:
-- Total revenue for the six months ended December 31, 2014 decreased 55.6%
to $4.2 million.
-- Net income attributable to Recon for the six months ended December 31,
2014 decreased 80.1% to $0.2 million.
-- Adjusted EBITDA for the six months ended December 31, 2014 decreased
89.1% to $0.2 million
-- Diluted EPS (U.S. GAAP) was $0.04 per share in the second quarter of FY
2015, compared with $0.23 per share in the second quarter of FY2014.
-- Adjusted diluted EPS*** (non-U.S.GAAP) was a loss of $0.02 per share
compared with a net income of $0.31 per share in the same period a year
ago.
*** Non-U.S. GAAP
adjusted net income
(loss) and EPS exclude
certain special non-
cash after tax income
totaling $0.3 million,
or $0.06 per share
that are included in
net income.
Other Financial and Operation Highlights
For the three months ended in December 31, 2014:
-- Gross margins increased to 42.1% from 35.7% a year earlier mainly
because of the decreased hardware cost of revenue during the period
compared to same period last year.
-- Operating income declined to $0.4 million from $1.3 million for the same
period last year.
-- Current assets as of December 31, 2014 were approximately $22.2 million,
including approximately $0.8 million in cash and $8.2 million in trade
accounts receivable from non related parties.
-- The Company reported no long term debt and total current liabilities of
approximately $8.0 million as of December 31, 2014.
-- Weighted average outstanding ordinary shares as of December 31, 2014
were approximately 4.82 million shares.
For the Six months ended in December 31, 2014:
-- Gross margins remained stable at 37.4% compared to 37.8% a year earlier.
-- Operating loss declined to $0.3 million compared with an operating
income of $1.4 million a year ago.
-- Weighted average outstanding ordinary shares as of December 31, 2014 was
approximately 4.85 million.
Outlook
Mr. Yin commented further, "Most of our peer companies need to undertake heavy burden of depreciation and amortization due to their excessive investment in the past few years and are suffering from heavy losses now. Compared to them, as a light asset service company, we believe our burden is smaller and have more flexibility to adjust and satisfy our clients' requirements. As our clients, CNPC and Sinopec, launched their reform of intelligent oilfield construction, we see continuing opportunity to expand our share of our customers' budgets with products and services that improve their productivity, safety and reduce their producing costs. The trend is that more and more oil and gas companies prefer to use highly automated and cost efficient equipment, including our customers. It not only saves costs, but also improves safety. We think we can help our customers' needs with our products and will continue to seek additional opportunities to expand our role on their behalf. We believe that our efforts will be reflected in our financial performance in the coming years."
Broaden Oversea Market Share
"As part of our growth strategies previously announced," Mr. Yin continued, "one of them is to follow our customers overseas to broaden our oversea market share, as we successfully did in Turkmenistan. We will keep implementing our growth strategies and update our progress once we have more detailed information."
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:
At the Company:
Recon Technology, Ltd.
Tel: +86-10-8494-5799
Email: info@recon.cn
Web: http://recon.investorroom.com
RECON TECHNOLOGY, LTD
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
As of June 30, As of December 31, As of December 31,
-------------- ------------------ ------------------
2014 2014 2014
---- ---- ----
ASSETS RMB RMB USD
--- --- ---
Current assets
Cash and cash equivalents 18,094,586 4,947,964 806,054
Notes receivable - 2,977,565 485,064
Trade accounts receivable, net 43,553,737 50,350,533 8,202,416
Trade accounts receivable- related parties, net 7,479,298 2,980,821 485,594
Inventories, net 14,336,602 19,170,009 3,122,914
Other receivables, net 18,293,043 27,201,739 4,431,333
Other receivables- related parties 1,414,433 - -
Purchase advances, net 25,759,065 22,116,442 3,602,906
Purchase advances- related parties 394,034 394,034 64,191
Prepaid expenses 2,634,664 4,762,485 775,840
Prepaid expenses - related parties 230,000 - -
Deferred tax asset 1,209,961 1,237,938 201,668
--------- --------- -------
Total current assets 133,399,423 136,139,530 22,177,980
Property and equipment, net 1,321,538 1,368,636 222,959
Long-term trade accounts receivable, net - 14,545,865 2,369,612
Long-term trade accounts receivable - related parties, net 14,456,317 - -
Long-term other receivable 5,353,104 4,053,933 660,411
--------- --------- -------
Total Assets 154,530,382 156,107,964 25,430,962
=========== =========== ==========
LIABILITIES AND EQUITY
Current liabilities
Short-term bank loans 10,000,000 8,000,000 1,303,250
Trade accounts payable 11,413,505 12,602,016 2,052,947
Other payables 1,765,079 1,627,676 265,159
Other payable- related parties 3,306,024 3,596,762 585,935
Deferred revenue 4,419,824 3,196,427 520,718
Advances from customers 801,385 384,200 62,589
Accrued payroll and employees' welfare 417,624 284,937 46,418
Accrued expenses 203,051 212,378 34,597
Taxes payable 7,589,846 8,369,413 1,363,430
Short-term borrowings- related parties 5,207,728 9,631,504 1,569,032
Deferred tax liability 180,186 180,186 29,353
Warrants liability 5,021,621 930,480 151,581
Total current liabilities 50,325,873 49,015,979 7,985,009
---------- ---------- ---------
Commitments and Contingency
Equity
Common stock, ($ 0.0185 U.S. dollar par value, 25,000,000 shares authorized; 4,717,336 and
4,726,711 shares issued and outstanding as of June 30, 2014 and December 31, 2014,
respectively) 616,865 617,943 100,665
Additional paid-in capital 83,061,058 84,343,979 13,740,161
Appropriated retained earnings 4,148,929 4,631,899 754,565
Unappropriated retained earnings 8,431,453 9,112,314 1,484,453
Accumulated other comprehensive loss (279,275) (274,549) (44,727)
Total shareholders' equity 95,979,030 98,431,586 16,035,117
Non-controlling interest 8,225,479 8,660,399 1,410,836
--------- --------- ---------
Total equity 104,204,509 107,091,985 17,445,953
----------- ----------- ----------
Total Liabilities and Equity 154,530,382 156,107,964 25,430,962
=========== =========== ==========
RECON TECHNOLOGY, LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
For the six months ended For the three months ended
December 31, December 31,
------------ ------------
2013 2014 2014 2013 2014 2014
---- ---- ---- ---- ---- ----
RMB RMB USD RMB RMB USD
--- --- --- --- --- ---
Revenues
Hardware and software 55,339,141 24,761,080 4,033,735 44,242,049 20,515,571 3,342,115
Service 397,589 103,774 16,905 397,589 45,283 7,377
Hardware and software - related parties 2,042,306 768,118 125,131 1,626,688 768,118 125,131
--------- ------- --------- ------- -------
Total revenues 57,779,036 25,632,972 4,175,771 46,266,326 21,328,972 3,474,623
---------- ---------- --------- ---------- ---------- ---------
Cost of revenues
Hardware and software 35,599,656 16,022,965 2,610,241 29,480,982 12,334,279 2,009,331
Service 34,946 - - 34,946 - -
Hardware and software - related parties 328,922 16,762 2,731 225,986 16,762 2,731
------- ------ ----- ------- ------ -----
Total cost of revenues 35,963,524 16,039,727 2,612,972 29,741,914 12,351,041 2,012,062
---------- ----------
Gross profit 21,815,512 9,593,245 1,562,799 16,524,412 8,977,931 1,462,561
---------- --------- --------- ---------- --------- ---------
Selling and distribution expenses 3,604,440 1,955,260 318,524 2,250,518 1,254,470 204,361
General and administrative expenses 6,457,563 7,796,731 1,270,136 3,715,640 4,093,440 666,847
Research and development expenses 3,353,997 1,899,957 309,515 2,661,397 1,243,228 202,530
---------
Operating expenses 13,416,000 11,651,948 1,898,175 8,627,555 6,591,138 1,073,738
---------- ---------- --------- --------- --------- ---------
Income ?loss? from operations 8,399,512 (2,058,703) (335,376) 7,896,857 2,386,793 388,823
--------- ---------- -------- --------- --------- -------
Other income (expenses)
Subsidy income 1,018,313 484,318 78,898 684,601 269,615 43,922
Interest income 204,970 157,468 25,653 101,769 74,436 12,126
Interest expense (479,648) (468,956) (76,396) (258,389) (227,112) (36,998)
Loss from investment (735,080) - - (360,466) - -
Change in fair value of warrants liability 556 4,077,517 664,253 556 3,803,118 619,552
Loss from foreign currency exchange (119,392) (20,880) (3,401) (213,692) (18,806) (3,064)
Other expense (43,946) 76,672 12,490 (19,632) 90,692 14,774
------- ------ ------ ------- ------ ------
Income before income tax 8,245,285 2,247,436 366,121 7,831,604 6,378,736 1,039,135
Provision for income tax 1,459,189 648,932 105,715 1,251,862 618,687 100,788
------- --------- ------- -------
Net Income 6,786,096 1,598,504 260,406 6,579,742 5,760,049 938,347
Less: Net income attributable to non-controlling interest 924,981 434,673 70,811 765,071 434,673 70,811
------ ------- ------- ------
Net Income attributable to Recon Technology, Ltd 5,861,115 1,163,831 189,595 5,814,671 5,325,376 867,536
========= ========= ======= ========= ========= =======
Comprehensive income
Net income 6,786,096 1,598,504 260,406 6,579,742 5,760,049 938,347
Foreign currency translation adjustment 77,277 4,726 770 82,881 5,528 901
------ ----- --- ------ ----- ---
Comprehensive income 6,863,373 1,603,230 261,176 6,662,623 5,765,577 939,248
Less: Comprehensive income attributable to non-controlling interest 932,709 434,920 70,851 773,360 434,961 70,858
------- ------- ------ ------- ------- ------
Comprehensive income attributable to Recon Technology, Ltd 5,930,664 1,168,310 190,325 5,889,263 5,330,616 868,390
========= ========= ======= ========= ========= =======
Earnings per common share - basic 1.44 0.25 0.04 1.40 1.13 0.18
==== ==== ==== ==== ==== ====
Earnings per common share - diluted 1.44 0.24 0.04 1.38 1.10 0.18
==== ==== ==== ==== ==== ====
Weighted - average shares -basic 4,056,963 4,741,911 4,741,911 4,162,115 4,726,711 4,726,711
========= ========= ========= ========= ========= =========
Weighted - average shares -diluted 4,056,963 4,846,270 4,846,270 4,224,560 4,820,817 4,820,817
========= ========= ========= ========= ========= =========
RECON TECHNOLOGY, LTD
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS
For six months ended December 31,
2013 2014 2014
---- ---- ----
RMB RMB USD
--- --- ---
Cash flows from operating activities:
Net income 6,786,096 1,598,504 260,406
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation 301,341 274,511 44,720
Gain from disposal of equipment - (149,480) (24,351)
Provision for doubtful accounts 378,584 104,589 17,038
Share based compensation 895,509 1,115,030 181,645
Loss from investment 735,080 - -
Deferred tax benefit (32,211) (27,977) (4,558)
Change in fair value of warrants liability (556) (4,077,517) (664,253)
Restricted shares issued for services 407,972 1,171,331 190,817
Changes in operating assets and liabilities:
Notes receivable 2,578,855 (2,977,565) (485,064)
Trade accounts receivable (27,881,579) (8,572,529) (1,396,519)
Trade accounts receivable-related parties 610,501 6,104,734 994,499
Inventories (8,799,658) (4,833,407) (787,392)
Other receivable, net 1,830,372 (7,635,508) (1,243,873)
Other receivables related parties, net 147,224 1,414,433 230,420
Purchase advance, net 472,846 2,641,583 430,330
Tax recoverable 575,650 - -
Prepaid expense 1,223,568 (2,127,821) (346,635)
Prepaid expense - related party, net - 230,000 37,468
Trade accounts payable 15,717,487 1,188,511 193,616
Trade accounts payable-related parties (3,994,718) - -
Other payables (556,242) (137,403) (22,384)
Other payables-related parties (723,453) 290,738 47,363
Deferred income 544,754 (1,223,397) (199,299)
Advances from customers 83,462 (417,185) (67,962)
Accrued payroll and employees' welfare (1,639,401) (132,687) (21,616)
Accrued expenses 269,270 9,327 1,519
Taxes payable 3,292,976 779,567 126,996
Net cash used in operating activities (6,776,271) (15,389,618) (2,507,069)
---------- ----------- ----------
Cash flows from investing activities:
Purchase of property and equipment (36,495) (514,009) (83,735)
Proceeds from disposal of equipment - 341,880 55,694
Net cash used in investing activities (36,495) (172,129) (28,041)
------- -------- -------
Cash flows from financing activities:
Proceeds from short-term bank loans 15,400,000 - -
Repayments of short-term bank loans (6,040,000) (2,000,000) (325,812)
Proceeds from short-term borrowings-related parties - 9,400,000 1,531,319
Repayment of short-term borrowings (110,375) - -
Repayment of short-term borrowings-related parties (5,303,279) (5,000,000) (814,531)
Proceeds from sale of common stock, net of issuance costs 12,132,882 - -
Net cash provided by financing activities 16,079,228 2,400,000 390,976
---------- --------- -------
Effect of exchange rate fluctuation on cash and cash equivalents 116,711 15,125 2,467
------- ------ -----
Net increase (decrease) in cash and cash equivalents 9,383,173 (13,146,622) (2,141,667)
Cash and cash equivalents at beginning of period 12,350,392 18,094,586 2,947,721
---------- ---------- ---------
Cash and cash equivalents at end of period 21,733,565 4,947,964 806,054
========== ========= =======
Supplemental cash flow information
Cash paid during the period for interest 689,828 510,956 83,238
======= ======= ======
Cash paid during the period for taxes - 203,073 33,082
=== ======= ======
Non-cash investing and financing activities
Cancelation of prior issuance of 40,625 shares of common stock for professional services - 1,002,721 163,350
SOURCE Recon Technology, Ltd.
SOURCE: Recon Technology, Ltd.
Recon Reports FY 2015 Second Quarter Results
Performance Improved Compared to First Quarter;
Maintain Full Year Growth Outlook
PR Newswire
BEIJING, Feb. 13, 2015
BEIJING, Feb. 13, 2015 /PRNewswire/ -- Recon Technology, Ltd. (NASDAQ: RCON), ("Recon" or the "Company"), a leading independent oilfield services provider operating primarily in China, today reported its operating results for the second quarter of fiscal year 2015, which ended December 31, 2014.
Mr. Sheping Yin, Chairman and CEO of Recon stated, "Affected by the lower oil and gas price worldwide and decreased CAPEX expense of our clients, some of our projects are postponed or cancelled, and our financial performance for the first half year of fiscal 2015 may not be satisfactory. Overall, based on our reported revenue in this second quarter, our performance this quarter improved significantly compared to last quarter. The dollar amount of our current contracts on hand and actual onsite workload also increased significantly during this quarter. As such, our management continue to be optimistic for the coming year. We believe that the continued decline of oil and gas prices stimulated oil companies' demand for technology and better production management for producing wells, which is exactly the focus of our business. We believe this is a great opportunity for us and our years of investment in R&D are paying off. We remain optimistic aboutour future growth."
Three Month Financial Highlights
For the second quarter ended December, 31, 2014:
- Revenues declined 53.9% to $3.5 million from $7.5 million* in the second fiscal quarter last year due to projects delay or cancellation. Nevertheless, management believe customer interest in Recon products and technology remain strong.
- Net income attributable to Recon (U.S. GAAP) was $0.9 million, compared with net income of approximately $1.0 million* a year earlier.
- With the decline in revenues, adjusted net income attributable to Recon (non-U.S. GAAP)** declined to approximately $0.3 million from approximately $1.2 million* in the same period last year.
- Adjusted EBIDTA (non-U.S. GAAP) decreased year over year from approximately $1.6 million* in the second quarter of FY 2014 to approximately $0.6 million in second quarter of FY 2015.
- Diluted EPS (U.S. GAAP) was $0.18 per share in the second quarter of FY 2015, compared with $0.22 per share in the second quarter of FY2014.
- Adjusted diluted EPS** (non-U. S. GAAP) was $0.07 compared with $0.27 in the second quarter a year ago.
|
* Based on the exchange rate of RMB 6.1385 to US $1.00. |
|
** Non-U.S. GAAP adjusted net income (loss) and EPS exclude certain special non-cash after tax income totaling $0.5 million, or $0.11 per share that is included in net income. |
Six Month Financial Highlights
For the six-month period ended December, 31, 2014:
- Total revenue for the six months ended December 31, 2014 decreased 55.6% to $4.2 million.
- Net income attributable to Recon for the six months ended December 31, 2014 decreased 80.1% to $0.2 million.
- Adjusted EBITDA for the six months ended December 31, 2014 decreased 89.1% to $0.2 million
- Diluted EPS (U.S. GAAP) was $0.04 per share in the second quarter of FY 2015, compared with $0.23 per share in the second quarter of FY2014.
- Adjusted diluted EPS*** (non-U.S.GAAP) was a loss of $0.02 per share compared with a net income of $0.31 per share in the same period a year ago.
|
*** Non-U.S. GAAP adjusted net income (loss) and EPS exclude certain special non-cash after tax income totaling $0.3 million, or $0.06 per share that are included in net income. |
Other Financial and Operation Highlights
For the three months ended in December 31, 2014:
- Gross margins increased to 42.1% from 35.7% a year earlier mainly because of the decreased hardware cost of revenue during the period compared to same period last year.
- Operating income declined to $0.4 million from $1.3 million for the same period last year.
- Current assets as of December 31, 2014 were approximately $22.2 million, including approximately $0.8 million in cash and $8.2 million in trade accounts receivable from non related parties.
- The Company reported no long term debt and total current liabilities of approximately $8.0 million as of December 31, 2014.
- Weighted average outstanding ordinary shares as of December 31, 2014 were approximately 4.82 million shares.
For the Six months ended in December 31, 2014:
- Gross margins remained stable at 37.4% compared to 37.8% a year earlier.
- Operating loss declined to $0.3 million compared with an operating income of $1.4 million a year ago.
- Weighted average outstanding ordinary shares as of December 31, 2014 was approximately 4.85 million.
Outlook
Mr. Yin commented further, "Most of our peer companies need to undertake heavy burden of depreciation and amortization due to their excessive investment in the past few years and are suffering from heavy losses now. Compared to them, as a light asset service company, we believe our burden is smaller and have more flexibility to adjust and satisfy our clients' requirements. As our clients, CNPC and Sinopec, launched their reform of intelligent oilfield construction, we see continuing opportunity to expand our share of our customers' budgets with products and services that improve their productivity, safety and reduce their producing costs. The trend is that more and more oil and gas companies prefer to use highly automated and cost efficient equipment, including our customers. It not only saves costs, but also improves safety. We think we can help our customers' needs with our products and will continue to seek additional opportunities to expand our role on their behalf. We believe that our efforts will be reflected in our financial performance in the coming years."
Broaden Oversea Market Share
"As part of our growth strategies previously announced," Mr. Yin continued, "one of them is to follow our customers overseas to broaden our oversea market share, as we successfully did in Turkmenistan. We will keep implementing our growth strategies and update our progress once we have more detailed information."
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:
At the Company:
Recon Technology, Ltd.
Tel: +86-10-8494-5799
Email: info@recon.cn
Web: http://recon.investorroom.com
|
RECON TECHNOLOGY, LTD | ||||||||
|
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
|
As of June 30, |
As of December 31, |
As of December 31, | ||||||
|
2014 |
2014 |
2014 | ||||||
|
ASSETS |
RMB |
RMB |
USD | |||||
|
Current assets |
||||||||
|
Cash and cash equivalents |
18,094,586 |
4,947,964 |
806,054 | |||||
|
Notes receivable |
- |
2,977,565 |
485,064 | |||||
|
Trade accounts receivable, net |
43,553,737 |
50,350,533 |
8,202,416 | |||||
|
Trade accounts receivable- related parties, net |
7,479,298 |
2,980,821 |
485,594 | |||||
|
Inventories, net |
14,336,602 |
19,170,009 |
3,122,914 | |||||
|
Other receivables, net |
18,293,043 |
27,201,739 |
4,431,333 | |||||
|
Other receivables- related parties |
1,414,433 |
- |
- | |||||
|
Purchase advances, net |
25,759,065 |
22,116,442 |
3,602,906 | |||||
|
Purchase advances- related parties |
394,034 |
394,034 |
64,191 | |||||
|
Prepaid expenses |
2,634,664 |
4,762,485 |
775,840 | |||||
|
Prepaid expenses - related parties |
230,000 |
- |
- | |||||
|
Deferred tax asset |
1,209,961 |
1,237,938 |
201,668 | |||||
|
Total current assets |
133,399,423 |
136,139,530 |
22,177,980 | |||||
|
Property and equipment, net |
1,321,538 |
1,368,636 |
222,959 | |||||
|
Long-term trade accounts receivable, net |
- |
14,545,865 |
2,369,612 | |||||
|
Long-term trade accounts receivable - related parties, net |
14,456,317 |
- |
- | |||||
|
Long-term other receivable |
5,353,104 |
4,053,933 |
660,411 | |||||
|
Total Assets |
154,530,382 |
156,107,964 |
25,430,962 | |||||
|
LIABILITIES AND EQUITY |
||||||||
|
Current liabilities |
||||||||
|
Short-term bank loans |
10,000,000 |
8,000,000 |
1,303,250 | |||||
|
Trade accounts payable |
11,413,505 |
12,602,016 |
2,052,947 | |||||
|
Other payables |
1,765,079 |
1,627,676 |
265,159 | |||||
|
Other payable- related parties |
3,306,024 |
3,596,762 |
585,935 | |||||
|
Deferred revenue |
4,419,824 |
3,196,427 |
520,718 | |||||
|
Advances from customers |
801,385 |
384,200 |
62,589 | |||||
|
Accrued payroll and employees' welfare |
417,624 |
284,937 |
46,418 | |||||
|
Accrued expenses |
203,051 |
212,378 |
34,597 | |||||
|
Taxes payable |
7,589,846 |
8,369,413 |
1,363,430 | |||||
|
Short-term borrowings- related parties |
5,207,728 |
9,631,504 |
1,569,032 | |||||
|
Deferred tax liability |
180,186 |
180,186 |
29,353 | |||||
|
Warrants liability |
5,021,621 |
930,480 |
151,581 | |||||
|
Total current liabilities |
50,325,873 |
49,015,979 |
7,985,009 | |||||
|
Commitments and Contingency |
||||||||
|
Equity |
||||||||
|
Common stock, ($ 0.0185 U.S. dollar par value, 25,000,000 shares authorized; 4,717,336 and 4,726,711 shares issued and outstanding as of June 30, 2014 and December 31, 2014, respectively) |
616,865 |
617,943 |
100,665 | |||||
|
Additional paid-in capital |
83,061,058 |
84,343,979 |
13,740,161 | |||||
|
Appropriated retained earnings |
4,148,929 |
4,631,899 |
754,565 | |||||
|
Unappropriated retained earnings |
8,431,453 |
9,112,314 |
1,484,453 | |||||
|
Accumulated other comprehensive loss |
(279,275) |
(274,549) |
(44,727) | |||||
|
Total shareholders' equity |
95,979,030 |
98,431,586 |
16,035,117 | |||||
|
Non-controlling interest |
8,225,479 |
8,660,399 |
1,410,836 | |||||
|
Total equity |
104,204,509 |
107,091,985 |
17,445,953 | |||||
|
Total Liabilities and Equity |
154,530,382 |
156,107,964 |
25,430,962 | |||||
|
RECON TECHNOLOGY, LTD | |||||||||||||||||
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME | |||||||||||||||||
|
For the six months ended |
For the three months ended | ||||||||||||||||
|
December 31, |
December 31, | ||||||||||||||||
|
2013 |
2014 |
2014 |
2013 |
2014 |
2014 | ||||||||||||
|
RMB |
RMB |
USD |
RMB |
RMB |
USD | ||||||||||||
|
Revenues |
|||||||||||||||||
|
Hardware and software |
55,339,141 |
24,761,080 |
4,033,735 |
44,242,049 |
20,515,571 |
3,342,115 | |||||||||||
|
Service |
397,589 |
103,774 |
16,905 |
397,589 |
45,283 |
7,377 | |||||||||||
|
Hardware and software - related parties |
2,042,306 |
768,118 |
125,131 |
1,626,688 |
768,118 |
125,131 | |||||||||||
|
Total revenues |
57,779,036 |
25,632,972 |
4,175,771 |
46,266,326 |
21,328,972 |
3,474,623 | |||||||||||
|
Cost of revenues |
|||||||||||||||||
|
Hardware and software |
35,599,656 |
16,022,965 |
2,610,241 |
29,480,982 |
12,334,279 |
2,009,331 | |||||||||||
|
Service |
34,946 |
- |
- |
34,946 |
- |
- | |||||||||||
|
Hardware and software - related parties |
328,922 |
16,762 |
2,731 |
225,986 |
16,762 |
2,731 | |||||||||||
|
Total cost of revenues |
35,963,524 |
16,039,727 |
2,612,972 |
29,741,914 |
12,351,041 |
2,012,062 | |||||||||||
|
Gross profit |
21,815,512 |
9,593,245 |
1,562,799 |
16,524,412 |
8,977,931 |
1,462,561 | |||||||||||
|
Selling and distribution expenses |
3,604,440 |
1,955,260 |
318,524 |
2,250,518 |
1,254,470 |
204,361 | |||||||||||
|
General and administrative expenses |
6,457,563 |
7,796,731 |
1,270,136 |
3,715,640 |
4,093,440 |
666,847 | |||||||||||
|
Research and development expenses |
3,353,997 |
1,899,957 |
309,515 |
2,661,397 |
1,243,228 |
202,530 | |||||||||||
|
Operating expenses |
13,416,000 |
11,651,948 |
1,898,175 |
8,627,555 |
6,591,138 |
1,073,738 | |||||||||||
|
Income （loss） from operations |
8,399,512 |
(2,058,703) |
(335,376) |
7,896,857 |
2,386,793 |
388,823 | |||||||||||
|
Other income (expenses) |
|||||||||||||||||
|
Subsidy income |
1,018,313 |
484,318 |
78,898 |
684,601 |
269,615 |
43,922 | |||||||||||
|
Interest income |
204,970 |
157,468 |
25,653 |
101,769 |
74,436 |
12,126 | |||||||||||
|
Interest expense |
(479,648) |
(468,956) |
(76,396) |
(258,389) |
(227,112) |
(36,998) | |||||||||||
|
Loss from investment |
(735,080) |
- |
- |
(360,466) |
- |
- | |||||||||||
|
Change in fair value of warrants liability |
556 |
4,077,517 |
664,253 |
556 |
3,803,118 |
619,552 | |||||||||||
|
Loss from foreign currency exchange |
(119,392) |
(20,880) |
(3,401) |
(213,692) |
(18,806) |
(3,064) | |||||||||||
|
Other expense |
(43,946) |
76,672 |
12,490 |
(19,632) |
90,692 |
14,774 | |||||||||||
|
Income before income tax |
8,245,285 |
2,247,436 |
366,121 |
7,831,604 |
6,378,736 |
1,039,135 | |||||||||||
|
Provision for income tax |
1,459,189 |
648,932 |
105,715 |
1,251,862 |
618,687 |
100,788 | |||||||||||
|
Net Income |
6,786,096 |
1,598,504 |
260,406 |
6,579,742 |
5,760,049 |
938,347 | |||||||||||
|
Less: Net income attributable to non-controlling interest |
924,981 |
434,673 |
70,811 |
765,071 |
434,673 |
70,811 | |||||||||||
|
Net Income attributable to Recon Technology, Ltd |
5,861,115 |
1,163,831 |
189,595 |
5,814,671 |
5,325,376 |
867,536 | |||||||||||
|
Comprehensive income |
|||||||||||||||||
|
Net income |
6,786,096 |
1,598,504 |
260,406 |
6,579,742 |
5,760,049 |
938,347 | |||||||||||
|
Foreign currency translation adjustment |
77,277 |
4,726 |
770 |
82,881 |
5,528 |
901 | |||||||||||
|
Comprehensive income |
6,863,373 |
1,603,230 |
261,176 |
6,662,623 |
5,765,577 |
939,248 | |||||||||||
|
Less: Comprehensive income attributable to non-controlling interest |
932,709 |
434,920 |
70,851 |
773,360 |
434,961 |
70,858 | |||||||||||
|
Comprehensive income attributable to Recon Technology, Ltd |
5,930,664 |
1,168,310 |
190,325 |
5,889,263 |
5,330,616 |
868,390 | |||||||||||
|
Earnings per common share - basic |
1.44 |
0.25 |
0.04 |
1.40 |
1.13 |
0.18 | |||||||||||
|
Earnings per common share - diluted |
1.44 |
0.24 |
0.04 |
1.38 |
1.10 |
0.18 | |||||||||||
|
Weighted - average shares -basic |
4,056,963 |
4,741,911 |
4,741,911 |
4,162,115 |
4,726,711 |
4,726,711 | |||||||||||
|
Weighted - average shares -diluted |
4,056,963 |
4,846,270 |
4,846,270 |
4,224,560 |
4,820,817 |
4,820,817 | |||||||||||
|
RECON TECHNOLOGY, LTD | ||||||||
|
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASHFLOWS | ||||||||
|
For six months ended December 31, | ||||||||
|
2013 |
2014 |
2014 | ||||||
|
RMB |
RMB |
USD | ||||||
|
Cash flows from operating activities: |
||||||||
|
Net income |
6,786,096 |
1,598,504 |
260,406 | |||||
|
Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
|
Depreciation |
301,341 |
274,511 |
44,720 | |||||
|
Gain from disposal of equipment |
- |
(149,480) |
(24,351) | |||||
|
Provision for doubtful accounts |
378,584 |
104,589 |
17,038 | |||||
|
Share based compensation |
895,509 |
1,115,030 |
181,645 | |||||
|
Loss from investment |
735,080 |
- |
- | |||||
|
Deferred tax benefit |
(32,211) |
(27,977) |
(4,558) | |||||
|
Change in fair value of warrants liability |
(556) |
(4,077,517) |
(664,253) | |||||
|
Restricted shares issued for services |
407,972 |
1,171,331 |
190,817 | |||||
|
Changes in operating assets and liabilities: |
||||||||
|
Notes receivable |
2,578,855 |
(2,977,565) |
(485,064) | |||||
|
Trade accounts receivable |
(27,881,579) |
(8,572,529) |
(1,396,519) | |||||
|
Trade accounts receivable-related parties |
610,501 |
6,104,734 |
994,499 | |||||
|
Inventories |
(8,799,658) |
(4,833,407) |
(787,392) | |||||
|
Other receivable, net |
1,830,372 |
(7,635,508) |
(1,243,873) | |||||
|
Other receivables related parties, net |
147,224 |
1,414,433 |
230,420 | |||||
|
Purchase advance, net |
472,846 |
2,641,583 |
430,330 | |||||
|
Tax recoverable |
575,650 |
- |
- | |||||
|
Prepaid expense |
1,223,568 |
(2,127,821) |
(346,635) | |||||
|
Prepaid expense - related party, net |
- |
230,000 |
37,468 | |||||
|
Trade accounts payable |
15,717,487 |
1,188,511 |
193,616 | |||||
|
Trade accounts payable-related parties |
(3,994,718) |
- |
- | |||||
|
Other payables |
(556,242) |
(137,403) |
(22,384) | |||||
|
Other payables-related parties |
(723,453) |
290,738 |
47,363 | |||||
|
Deferred income |
544,754 |
(1,223,397) |
(199,299) | |||||
|
Advances from customers |
83,462 |
(417,185) |
(67,962) | |||||
|
Accrued payroll and employees' welfare |
(1,639,401) |
(132,687) |
(21,616) | |||||
|
Accrued expenses |
269,270 |
9,327 |
1,519 | |||||
|
Taxes payable |
3,292,976 |
779,567 |
126,996 | |||||
|
Net cash used in operating activities |
(6,776,271) |
(15,389,618) |
(2,507,069) | |||||
|
Cash flows from investing activities: |
||||||||
|
Purchase of property and equipment |
(36,495) |
(514,009) |
(83,735) | |||||
|
Proceeds from disposal of equipment |
- |
341,880 |
55,694 | |||||
|
Net cash used in investing activities |
(36,495) |
(172,129) |
(28,041) | |||||
|
Cash flows from financing activities: |
||||||||
|
Proceeds from short-term bank loans |
15,400,000 |
- |
- | |||||
|
Repayments of short-term bank loans |
(6,040,000) |
(2,000,000) |
(325,812) | |||||
|
Proceeds from short-term borrowings-related parties |
- |
9,400,000 |
1,531,319 | |||||
|
Repayment of short-term borrowings |
(110,375) |
- |
- | |||||
|
Repayment of short-term borrowings-related parties |
(5,303,279) |
(5,000,000) |
(814,531) | |||||
|
Proceeds from sale of common stock, net of issuance costs |
12,132,882 |
- |
- | |||||
|
Net cash provided by financing activities |
16,079,228 |
2,400,000 |
390,976 | |||||
|
Effect of exchange rate fluctuation on cash and cash equivalents |
116,711 |
15,125 |
2,467 | |||||
|
Net increase (decrease) in cash and cash equivalents |
9,383,173 |
(13,146,622) |
(2,141,667) | |||||
|
Cash and cash equivalents at beginning of period |
12,350,392 |
18,094,586 |
2,947,721 | |||||
|
Cash and cash equivalents at end of period |
21,733,565 |
4,947,964 |
806,054 | |||||
|
Supplemental cash flow information |
||||||||
|
Cash paid during the period for interest |
689,828 |
510,956 |
83,238 | |||||
|
Cash paid during the period for taxes |
- |
203,073 |
33,082 | |||||
|
Non-cash investing and financing activities |
||||||||
|
Cancelation of prior issuance of 40,625 shares of common stock for professional services |
- |
1,002,721 |
163,350 | |||||
SOURCE Recon Technology, Ltd.
Web Site: http://www.recon.cn