BEIJING, February 14, 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:
* 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:
*** 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:
For the Six months ended in December 31, 2014:
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 |
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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 |
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/recon-reports-fy-2015-second-quarter-results-300035958.html