BEIJING, Feb. 16, 2016 /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 second quarter of
fiscal year 2016, which ended December 31, 2015.
Q2 FY2016 Financial Highlights:
- Total revenues for the second quarter of FY2016 were
RMB 28.84 million ($4.44 million), an increase of 35.2% from the
same period of last fiscal year.
- Gross profit for the second quarter of FY2016 was RMB 5.76 million ($0.89
million), a decrease of 35.8% from the same period of last
fiscal year. Gross margin was 20.0% for the second quarter of
FY2016, compared to 42.1% for the same period of last fiscal
year.
- Operating loss was RMB 3.27
million ($0.50 million) for
the second quarter of FY2016, compared to operating income of
RMB 2.39 million for the same period
of last fiscal year.
- Net loss attributable to Recon for the second quarter of FY2016
was RMB 2.52 million ($0.39 million), or RMB
0.45 ($0.07) per diluted
share, compared to RMB 5.33 million,
or RMB 1.10 per diluted share, for
the same period of last fiscal year.
- Adjusted EBITDA (non-GAAP) was negative RMB 1.13 million ($0.17
million) for the second quarter of FY2016, compared to
RMB 3.49 million for the same period
of last fiscal year.
- Adjusted net loss attributable to Recon was RMB 0.71 million ($0.11
million), or RMB 0.13
($0.02) per diluted shares, for the
second quarter of FY2016, compared to adjusted net income
attributable to Recon of RMB 2.04
million, or RMB 0.42 per
diluted share, for the same period of last fiscal year.
Mr. Shenping Yin, Chairman and
CEO of Recon stated, "Despite continuing macro headwinds and
sluggish oil prices, we ended the year of 2015 on a high note with
revenues growing 35.2% to the highest level in two years, thanks to
strong sales in hardware and service. Entering 2016, our furnace
business is on the path to recovery following major bidding
contract win and Class A Furnace Supplier qualification with
PetroChina in December while our newly acquired QHHY subsidiary
starts to make meaningful contribution to both our top line and
bottom line. We look forward to a stronger year in 2016."
Q2 FY2016 Financial Results
|
For the Three
Months Ended December 31,
|
|
2014
|
|
2015
|
|
2015
|
|
%
|
(thousands)
|
RMB
|
|
RMB
|
|
USD
|
|
Change
|
Revenues
|
|
21,329
|
|
|
28,842
|
|
$
|
4,444
|
|
35.2%
|
Hardware and
software
|
|
20,516
|
|
|
27,857
|
|
|
4,292
|
|
35.8%
|
Service
|
|
45
|
|
|
985
|
|
|
152
|
|
2075.3%
|
Hardware and software
- related parties
|
|
768
|
|
|
-
|
|
|
-
|
|
(100.0%)
|
Gross
margin
|
|
42.1%
|
|
|
20.0%
|
|
|
20.0%
|
|
(22.1%)
|
Operating (loss)
margin
|
|
11.2%
|
|
|
(11.4%)
|
|
|
(11.4%)
|
|
NM
|
Net income (loss)
attributable to RCON
|
|
5,325
|
|
|
(2,519)
|
|
|
(388)
|
|
NM
|
Diluted earnings
(loss) per share
|
|
1.10
|
|
|
(0.45)
|
|
|
(0.07)
|
|
NM
|
Revenues
For the three months ended December 31,
2015, total revenues increased by 35.2% to RMB 28.84 million ($4.44
million) from RMB 21.33
million for the same period of last fiscal year mainly as a
result of increase in sales of hardware products. Revenues from
non-related party hardware and software sales increased by
RMB 7.34 million, or 35.8%, to
RMB 27.86 million ($4.29 million) for the three months ended
December 31, 2015, compared to
RMB 20.52 million for the same period
of last fiscal year. Revenues from service increased by
RMB 0.94 million to RMB 0.99 million ($0.15
million) for the three months ended December 31, 2015, compared to RMB 0.05 million for the same period of last
fiscal year. No hardware and software sales were made to related
parties for the three months ended December
31, 2015, as compared to RMB 0.77
million for the same period of last fiscal year.
Gross profit and gross margin
Cost of revenues increased by RMB 10.73
million, or 86.9%, to RMB 23.08
million ($3.56 million) for
the three months ended December 31,
2015 from RMB 12.35 million
for the same period of last fiscal year. As a percentage of
revenues, cost of revenues increased to 80.0% for the three months
ended December 31, 2015 from 57.9%
for the same period of last fiscal year.
Gross profit decreased by RMB 3.22
million, or 35.8%, to RMB 5.76
million ($0.89 million) for
the three months ended December 31,
2015 from RMB 8.98 million for
the same period of last fiscal year. Overall gross margin was 20.0%
for the three months ended December 31,
2015, compared to 42.1% for the same period of last fiscal
year.
Operating income (loss) and operating (loss)
margin
Selling and distribution expenses increased by RMB 0.26 million, or 20.5%, to RMB 1.51 million ($0.23
million) for the three months ended December 31, 2015 from RMB
1.25 million for the same period of last fiscal year.
General and administrative expenses increased by RMB 0.70 million, or 17.0%, to RMB 4.79 million ($0.74
million) for the three months ended December 31, 2015 from RMB
4.09 million for the same period of last fiscal year.
Research and development expenses increased by RMB 1.49 million, or 120.1%, to RMB 2.74 million ($0.42
million) for the three months ended December 31, 2015 from RMB
1.24 million for the same period of last fiscal year as a
result of increased research and development effort on downhole
service tools. Total operating expenses increased by RMB 2.45 million, or 37.1%, to RMB 9.04 million ($1.39
million) for the three months ended December 31, 2015 from RMB
6.59 million for the same period of last fiscal year.
Operating loss was RMB 3.27
million ($0.50 million) for
the three months ended December 31,
2015, compared to operating income of RMB 2.39 million for the same period of last
fiscal year. Operating loss margin was 11.4% for the three months
ended December, 2015, compared to operating profit margin of 11.2%
for the same period of last fiscal year.
Net income (loss) attributable to
Recon
Net loss to our shareholders for the three months ended
December 31, 2015 was RMB 2.52 million ($0.39
million), or RMB 0.45
($0.07) per diluted share, compared
to net income of RMB 5.33 million, or
RMB1.10 per diluted share, for the
same period of last fiscal year.
Non-GAAP Measures
|
For the Three
Months Ended December 31,
|
|
2014
|
|
2015
|
|
2015
|
(thousands)
|
RMB
|
|
RMB
|
|
USD
|
Net income
(loss)
|
|
5,760
|
|
|
(2,519)
|
|
$
|
(388)
|
Provision for income
taxes
|
|
619
|
|
|
(852)
|
|
|
(131)
|
Interest expenses and
foreign currency adjustment
|
|
246
|
|
|
196
|
|
|
30
|
Change in fair value
of warrants liability
|
|
(3,803)
|
|
|
-
|
|
|
-
|
Restricted shares
issued for consulting services
|
|
-
|
|
|
364
|
|
|
56
|
Stock compensation
expense
|
|
514
|
|
|
1,447
|
|
|
223
|
Depreciation and
amortization
|
|
153
|
|
|
236
|
|
|
36
|
Adjusted
EBITDA
|
|
3,489
|
|
|
(1,128)
|
|
|
(174)
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to RCON
|
|
5,325
|
|
|
(2,519)
|
|
|
(388)
|
Change in fair value
of warrants liability
|
|
(3,803)
|
|
|
-
|
|
|
-
|
Restricted shares
issued for consulting services
|
|
-
|
|
|
364
|
|
|
56
|
Stock compensation
expense
|
|
514
|
|
|
1,447
|
|
|
223
|
Adjusted net
income attributable to RCON
|
|
2,036
|
|
|
(708)
|
|
|
(109)
|
Adjusted earnings
(loss) per diluted share
|
|
0.42
|
|
|
(0.13)
|
|
|
(0.02)
|
Adjusted EBITDA (non-GAAP), which we define as net income (loss)
adjusted for income tax expense (benefit), interest expense, change
in fair value of warrants liability, restricted shares issued for
consulting services, non-cash stock compensation expense,
depreciation and amortization, was adjusted loss of RMB 1.13
million ($0.17 million) for the three
months ended December 31, 2015,
compared to adjusted income of RMB 3.49
million for the same period of last fiscal year. Adjusted
loss attributable to our shareholders was RMB 0.71 million ($0.11
million), or RMB 0.13
($0.02) per diluted share, for the
three months ended December 31, 2015,
compared to adjusted income attributable to our shareholders of
RMB 2.04 million, or RMB 0.42 per diluted share, for the same period
of last fiscal year.
Year-to-Date (Six Months) FY2016 Financial Results
|
For the Six Months
Ended December 31,
|
|
2014
|
|
2015
|
|
2015
|
|
%
|
(thousands)
|
RMB
|
|
RMB
|
|
USD
|
|
Change
|
Revenues
|
|
25,633
|
|
|
32,436
|
|
$
|
4,997
|
|
26.5%
|
Hardware and
software
|
|
24,761
|
|
|
31,338
|
|
|
4,828
|
|
26.6%
|
Service
|
|
104
|
|
|
1,098
|
|
|
169
|
|
958.3%
|
Hardware and software
- related parties
|
|
768
|
|
|
-
|
|
|
-
|
|
(100.0%)
|
Gross
margin
|
|
37.4%
|
|
|
19.0%
|
|
|
19.0%
|
|
(18.4%)
|
Operating (loss)
margin
|
|
(8.0%)
|
|
|
(36.9%)
|
|
|
(36.9%)
|
|
NM
|
Net income (loss)
attributable to RCON
|
|
1,164
|
|
|
(11,368)
|
|
|
(1,751)
|
|
NM
|
Diluted earnings
(loss) per share
|
|
0.24
|
|
|
(2.07)
|
|
|
(0.32)
|
|
NM
|
Revenues
Total revenues for the six months ended December 31, 2015 increased by RMB 6.80 million, or 26.5%, to RMB 32.44 million ($5.00
million) from RMB 25.63
million for the same period of last fiscal year. This
increase was mainly due to increase in hardware sales to
non-related parties and service revenues and partially offset by
decrease in software sales.
Revenues from hardware and software to non-related parties
increased by RMB 6.58 million, or
26.6%, to RMB 31.34 million
($4.83 million) for the six months
ended December 31, 2015 from
RMB 24.76 million for the same period
of last fiscal year, mainly due to the increase in sales of
hardware products. Revenues from service increased to RMB 1.10 million ($0.17
million) for the six months ended December 31, 2015 from RMB
0.10 million for the same period of last fiscal year. No
sales of hardware and software were made to related parties for the
six months ended December 31, 2015,
versus RMB 0.77 million for the same
period of last fiscal year.
Gross profit and gross margin
Cost of revenues increased by RMB 10.23
million, or 63.8%, to RMB 26.27
million ($4.05 million) for
the six months ended December 31,
2015 from RMB 16.04 million
for the same period of last fiscal year. As a percentage of
revenues, our cost of revenues increased to 81.0% for the six
months ended December 31, 2015 from
62.6% for the same period of last fiscal year.
Gross profit decreased by RMB3.43
million, or 35.7%, to RMB 6.16
million ($0.95 million) for
the six months ended December 31,
2015 from RMB 9.59 million for
the same period of last fiscal year. Overall gross margin was 19.0%
for the six months ended December 31,
2015, compared to 37.4% for the same period of last fiscal
year. The decrease in overall gross margin was mainly due to the
decrease in software sales with high margins.
Operating income (loss) and operating (loss)
margin
Selling and distribution expenses increased by RMB 0.67 million, or 34.2%, to RMB 2.62 million ($0.40
million) for the six months ended December 31, 2015 from RMB
1.96 million for the same period of last fiscal year.
General and administrative expenses increased by RMB 3.17 million, or 40.7%, to RMB 10.97 million ($1.69
million) for the six months ended December 31, 2015 from RMB
7.80 million for the same period of last fiscal year.
Research and development expenses increased by RMB 2.63 million, or 138.4%, to RMB 4.53 million ($0.70
million) for the six months ended December 31, 2015 from RMB
1.90 million for the same period of last fiscal year as a
result of increased research and development effort on downhole
service tools. Total operating expenses increased by RMB 6.47 million, or 55.5%, to RMB 18.12 million ($2.29
million) for the six months ended December 31, 2015 from RMB
11.65 million for the same period of last fiscal year.
Operating loss was RMB 11.96
million ($1.84 million) for
the six months ended December 31,
2015, compared to RMB 2.06
million for the same period of last fiscal year. Operating
loss margin was 36.9% for the six months ended December, 2015,
compared to 8.0% for the same period of last fiscal year.
Net income (loss) attributable to
Recon
Net loss to our shareholders for the six months ended
December 31, 2015 was RMB 11.37 million ($1.75
million), or RMB2.07
($0.32) per diluted share, compared
to net income of RMB 1.16 million, or
RMB 0.24 per diluted share, for the
same period of last fiscal year.
Non-GAAP Measures
|
For the Six Months
Ended December 31,
|
|
2014
|
|
2015
|
|
2015
|
(thousands)
|
RMB
|
|
RMB
|
|
USD
|
Net income
(loss)
|
|
1,599
|
|
|
(11,368)
|
|
$
|
(1,751)
|
Provision for income
taxes
|
|
649
|
|
|
(868)
|
|
|
(134)
|
Interest expenses and
foreign currency adjustment
|
|
490
|
|
|
474
|
|
|
73
|
Change in fair value
of warrants liability
|
|
(4,078)
|
|
|
-
|
|
|
-
|
Restricted shares
issued for consulting services
|
|
1,171
|
|
|
566
|
|
|
87
|
Stock compensation
expense
|
|
1,115
|
|
|
2,574
|
|
|
397
|
Depreciation and
amortization
|
|
275
|
|
|
496
|
|
|
76
|
Adjusted
EBITDA
|
|
1,221
|
|
|
(8,126)
|
|
|
(1,252)
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to RCON
|
|
1,164
|
|
|
(11,368)
|
|
|
(1,751)
|
Change in fair value
of warrants liability
|
|
(4,078)
|
|
|
-
|
|
|
-
|
Restricted shares
issued for consulting services
|
|
1,171
|
|
|
566
|
|
|
87
|
Stock compensation
expense
|
|
1,115
|
|
|
2,574
|
|
|
397
|
Adjusted net
income (loss) attributable to RCON
|
|
(628)
|
|
|
(8,228)
|
|
|
(1,267)
|
Adjusted earnings
per diluted share
|
|
(0.13)
|
|
|
(1.49)
|
|
|
(0.23)
|
Adjusted EBITDA (non-GAAP), which we define as net income (loss)
adjusted for income tax expense (benefit), interest expense, change
in fair value of warrants liability, restricted shares issued for
consulting services, non-cash stock compensation expense,
depreciation and amortization, was adjusted loss of RMB 8.13 million ($1.25
million) for the six months ended December 31, 2015, compared to adjusted income of
RMB 1.22 million for the same period
of last fiscal year. Adjusted net loss attributable to our
shareholders was RMB 8.23 million
($1.27 million), or RMB 1.49 ($0.23)
per diluted share, for the six months ended December 31, 2015, compared to RMB 0.63 million, or RMB
0.13 per diluted share, for the same period of last fiscal
year.
Financial Position
As of December 31, 2015, the
Company had cash and cash equivalents of RMB
3.11 million ($0.48 million),
short-term bank loans of RMB 6.50
million ($1.00 million), and
short-term borrowings from related parties of RMB 7.23 million ($1.11
million), compared to RMB12.34
million, RMB 7.00 million, and
RMB 16.92 million, respectively, at
June 30, 2015. Working capital as of
December 31, 2015 was RMB 68.64 million ($10.58
million) as compared to RMB 72.43
million at June 30, 2015. Net
cash provided by operating activities was RMB 0.99 million ($0.15
million) for the six-month ended December 31, 2015, compared to net cash used in
operating activities of RMB 15.39
million for the same period of last fiscal year. Net cash
used in investing activities was RMB 0.50
million ($0.08 million) for
the six months ended December 31,
2015, compared to RMB 0.17
million for the same period of last fiscal year. Net cash
used in financing activities was RMB 9.85
million ($1.52 million) for
the six months ended December 31,
2015, compared to net cash provided by financing activities
of RMB 2.40 million for the same
period of last fiscal year. During the six-month period ended
December 31, 2015, we repaid
RMB 15.52 million ($2.39 million) of short-term borrowings to two
related parties, repaid RMB 0.50
million ($0.08 million)
short-term bank loans, and received RMB 6.00
million ($0.92 million) from
one related party. We also issued 15,874 shares of common stocks
through an at-the-market offering and received net proceeds of
RMB 0.17 million ($0.03 million) during the six-month period ended
December 31, 2015.
Recent Development
On February 2, 2016, Beijing BHD
Petroleum Technology Co., Ltd. ("BHD"), a wholly-owned subsidiary
of the Company, received two orders for a total of RMB 2.1 million (~US$0.3
million) from PetroChina's oilfield companies. The first
order, dated January 12, 2016, is to
supply two heat exchanger units, a major component of furnaces, to
PetroChina's Jilin Oilfield for RMB650,000(~US$0.1
million), with a scheduled delivery date of no later than
March 15, 2016. The second order,
dated January 21, 2016, is to supply
two furnaces to PetroChina's Huabei Oilfield for RMB1.47 million (~US$0.2
million), with a scheduled delivery date of February 29, 2016.
On January 20, 2016, Nanjing Recon
Technology Co., Ltd. ("Nanjing Recon"), a subsidiary of the
Company, obtained qualifications to provide services for some
state-owned electric companies and, as a result, has participated
in bidding projects, including projects for China Huadian Corp.
On January 12, 2016, BHD executed
an agreement (the "Agreement") with Qinghai Oilfield, a PetroChina
subsidiary, to sell chemical agents (the "Chemicals") to Qinghai
Oilfield. The Chemicals, including Ion Modifiers and Water Quality
Stabilizers, are designed and tested by BHD and are to be used for
wastewater treatment at the Qinghai Oilfield. This Agreement, which
is valued at RMB 3.98 million
(~$0.6 million), is expected to be
completed by the end of FY2016.
On December 14, 2015, BHD won a
major bidding contract with PetroChina and was deemed a Class A
Furnace Supplier to all PetroChina's oilfield companies. With this
bidding and qualification, BHD will participate in PetroChina's
furnace procurement program, which was worth over RMB 2.9 billion (approximately $457 million) during the period Oct. 2015 to Sep.
2017. The Company also announced that BHD has secured a
RMB 3.22 million (~$0.5 million) contract to supply five furnaces
to PetroChina's Huabei Oilfield under this Bidding process.
On December 1, 2015, the Company
entered into a share purchase agreement to acquire 100% equity
interest in Qinghai Huayou Downhole Technologies Co., Ltd. (
"QHHY"), a PRC corporation and oilfield service provider in
Qinghai province.
About Recon Technology, Ltd.
Recon Technology, Ltd. is China's first independent
oil and gas field service company listed on NASDAQ
(RCON). Working closely 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.
Jia Liu
Tel: +86-10-8494-5799
Email: info@recon.cn
Weitian Investor Relations
Tina Xiao
Tel: +1-917-609-0333
Email: tina.xiao@weitian-ir.com
RECON TECHNOLOGY,
LTD
|
CONSOLIDATED
BALANCE SHEETS
|
|
|
As of Jun
30,
|
|
As of Dec
31,
|
|
As of Dec
31,
|
|
2015
|
|
2015
|
|
2015
|
ASSETS
|
RMB
|
|
RMB
|
|
U.S.
Dollars
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
|
12,344,929
|
|
|
3,108,330
|
|
$
|
478,890
|
Notes
receivable
|
|
4,205,530
|
|
|
3,026,820
|
|
|
466,332
|
Trade accounts
receivable, net
|
|
52,186,397
|
|
|
66,958,781
|
|
|
10,316,111
|
Trade accounts
receivable - related parties, net
|
|
4,769,800
|
|
|
-
|
|
|
-
|
Inventories,
net
|
|
10,845,007
|
|
|
7,780,702
|
|
|
1,198,746
|
Other receivables,
net
|
|
18,064,568
|
|
|
19,717,394
|
|
|
3,037,792
|
Other receivables -
related parties
|
|
91,021
|
|
|
-
|
|
|
-
|
Purchase advances,
net
|
|
18,622,538
|
|
|
12,018,393
|
|
|
1,851,633
|
Purchase advances -
related parties
|
|
394,034
|
|
|
-
|
|
|
-
|
Prepaid
expenses
|
|
826,314
|
|
|
1,926,018
|
|
|
296,736
|
Prepaid expenses -
related parties
|
|
420,000
|
|
|
-
|
|
|
-
|
Deferred tax
asset
|
|
1,742,098
|
|
|
1,554,284
|
|
|
239,463
|
Total current
assets
|
|
124,512,236
|
|
|
116,090,722
|
|
|
17,885,703
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
2,666,953
|
|
|
2,658,759
|
|
|
409,626
|
Long-term trade
accounts receivable, net
|
|
4,440,665
|
|
|
3,358,357
|
|
|
517,410
|
Long-term other
receivable
|
|
2,729,033
|
|
|
1,377,896
|
|
|
212,288
|
Total
Assets
|
|
134,348,887
|
|
|
123,485,734
|
|
$
|
19,025,027
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Short-term bank
loans
|
|
7,000,000
|
|
|
6,500,000
|
|
$
|
1,001,433
|
Trade accounts
payable
|
|
13,627,088
|
|
|
24,533,458
|
|
|
3,779,786
|
Trade accounts
payable- related parties
|
|
3,528,705
|
|
|
2,736,879
|
|
|
421,662
|
Other
payables
|
|
2,103,057
|
|
|
1,930,626
|
|
|
297,445
|
Other payable-
related parties
|
|
4,309,702
|
|
|
1,472,166
|
|
|
226,812
|
Deferred
revenue
|
|
2,285,529
|
|
|
451,180
|
|
|
69,512
|
Advances from
customers
|
|
529,700
|
|
|
322,449
|
|
|
49,679
|
Accrued payroll and
employees' welfare
|
|
246,789
|
|
|
470,822
|
|
|
72,538
|
Accrued
expenses
|
|
199,166
|
|
|
202,969
|
|
|
31,271
|
Taxes
payable
|
|
1,153,216
|
|
|
1,424,445
|
|
|
219,459
|
Short-term borrowings
- related parties
|
|
16,916,905
|
|
|
7,225,775
|
|
|
1,113,250
|
Deferred tax
liability
|
|
180,186
|
|
|
180,186
|
|
|
27,761
|
Total current
liabilities
|
|
52,080,043
|
|
|
47,450,955
|
|
|
7,310,608
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Common stock, ($
0.0185 U.S. dollar par value,
100,000,000 shares authorized; 5,427,946 and 5,804,005
shares issued and outstanding as of June 30, 2015 and
December 31, 2015, respectively)
|
|
697,217
|
|
|
741,467
|
|
|
114,235
|
Additional paid-in
capital
|
|
92,541,687
|
|
|
97,494,721
|
|
|
15,020,679
|
Appropriated retained
earnings
|
|
4,148,929
|
|
|
4,148,929
|
|
|
639,211
|
Unappropriated
retained earnings
|
|
(23,024,935)
|
|
|
(34,392,717)
|
|
|
(5,298,769)
|
Accumulated other
comprehensive loss
|
|
(317,551)
|
|
|
(194,761)
|
|
|
(30,005)
|
Total
shareholders' equity
|
|
74,045,347
|
|
|
67,797,639
|
|
|
10,445,351
|
Non-controlling
interest
|
|
8,223,497
|
|
|
8,237,140
|
|
|
1,269,068
|
Total
equity
|
|
82,268,844
|
|
|
76,034,779
|
|
|
11,714,419
|
Total Liabilities
and Equity
|
|
134,348,887
|
|
|
123,485,734
|
|
$
|
19,025,027
|
RECON TECHNOLOGY,
LTD
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
|
|
|
For the six months
ended
|
For the three
months ended
|
|
Dec
31,
|
Dec
31,
|
|
|
2014
|
|
|
2015
|
|
2015
|
|
2014
|
|
|
2015
|
|
2015
|
|
|
RMB
|
|
|
RMB
|
|
USD
|
|
RMB
|
|
|
RMB
|
|
USD
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hardware and
software
|
|
24,761,080
|
|
|
31,338,132
|
|
$
|
4,828,159
|
|
20,515,571
|
|
|
27,857,380
|
|
$
|
4,291,891
|
Service
|
|
103,774
|
|
|
1,098,258
|
|
|
169,205
|
|
45,283
|
|
|
985,050
|
|
|
151,763
|
Hardware and software
- related parties
|
|
768,118
|
|
|
-
|
|
|
-
|
|
768,118
|
|
|
-
|
|
|
-
|
Total
revenues
|
|
25,632,972
|
|
|
32,436,390
|
|
|
4,997,364
|
|
21,328,972
|
|
|
28,842,430
|
|
|
4,443,655
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hardware and
software
|
|
16,022,965
|
|
|
25,595,076
|
|
$
|
3,943,346
|
|
12,334,279
|
|
|
22,402,781
|
|
$
|
3,451,520
|
Service
|
|
-
|
|
|
676,970
|
|
|
104,298
|
|
|
|
|
676,970
|
|
|
104,298
|
Hardware and software
- related parties
|
|
16,762
|
|
|
-
|
|
|
-
|
|
16,762
|
|
|
-
|
|
|
-
|
Total cost of
revenues
|
|
16,039,727
|
|
|
26,272,046
|
|
|
4,047,644
|
|
12,351,041
|
|
|
23,079,751
|
|
|
3,555,818
|
Gross
profit
|
|
9,593,245
|
|
|
6,164,344
|
|
|
949,720
|
|
8,977,931
|
|
|
5,762,679
|
|
|
887,836
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and
distribution expenses
|
|
1,955,260
|
|
|
2,624,348
|
|
|
404,324
|
|
1,254,470
|
|
|
1,511,678
|
|
|
232,899
|
General and
administrative expenses
|
|
7,796,731
|
|
|
10,966,782
|
|
|
1,689,615
|
|
4,093,440
|
|
|
4,789,637
|
|
|
737,923
|
Research and
development expenses
|
|
1,899,957
|
|
|
4,529,036
|
|
|
697,773
|
|
1,243,228
|
|
|
2,736,039
|
|
|
421,532
|
Operating
expenses
|
|
11,651,948
|
|
|
18,120,166
|
|
|
2,791,712
|
|
6,591,138
|
|
|
9,037,354
|
|
|
1,392,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(2,058,703)
|
|
|
(11,955,822)
|
|
|
(1,841,992)
|
|
2,386,793
|
|
|
(3,274,675)
|
|
|
(504,518)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Subsidy
income
|
|
484,318
|
|
|
124,720
|
|
|
19,215
|
|
269,615
|
|
|
75,720
|
|
|
11,666
|
Interest
income
|
|
157,468
|
|
|
104,719
|
|
|
16,134
|
|
74,436
|
|
|
49,209
|
|
|
7,581
|
Interest
expense
|
|
(468,956)
|
|
|
(474,200)
|
|
|
(73,058)
|
|
(227,112)
|
|
|
(196,376)
|
|
|
(30,255)
|
Change in fair value
of warrants liability
|
|
4,077,517
|
|
|
-
|
|
|
-
|
|
3,803,118
|
|
|
-
|
|
|
-
|
Loss from foreign
currency exchange
|
|
(20,880)
|
|
|
(202)
|
|
|
(31)
|
|
(18,806)
|
|
|
736
|
|
|
113
|
Other
expense
|
|
76,672
|
|
|
(35,170)
|
|
|
(5,419)
|
|
90,692
|
|
|
(25,506)
|
|
|
(3,930)
|
Other
income(expense)
|
|
4,306,139
|
|
|
(280,133)
|
|
|
(43,159)
|
|
3,991,943
|
|
|
(96,217)
|
|
|
(14,825)
|
Income (loss)
before income tax
|
|
2,247,436
|
|
|
(12,235,955)
|
|
|
(1,885,152)
|
|
6,378,736
|
|
|
(3,370,892)
|
|
|
(519,342)
|
Provision (benefit)
for income tax
|
|
648,932
|
|
|
(868,173)
|
|
|
(133,756)
|
|
618,687
|
|
|
(851,716)
|
|
|
(131,221)
|
Net Income
(loss)
|
|
1,598,504
|
|
|
(11,367,782)
|
|
|
(1,751,395)
|
|
5,760,049
|
|
|
(2,519,176)
|
|
|
(388,121)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net income
attributable to non-controlling interest
|
|
434,673
|
|
|
-
|
|
|
-
|
|
434,673
|
|
|
-
|
|
|
-
|
Net Income (loss)
attributable to Recon Technology, Ltd
|
|
1,163,831
|
|
|
(11,367,782)
|
|
$
|
(1,751,395)
|
|
5,325,376
|
|
|
(2,519,176)
|
|
$
|
(388,122)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive
income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
1,598,504
|
|
|
(11,367,782)
|
|
|
(1,751,395)
|
|
5,760,049
|
|
|
(2,519,176)
|
|
|
(388,121)
|
Foreign currency
translation adjustment
|
|
4,726
|
|
|
122,790
|
|
|
18,918
|
|
5,528
|
|
|
(1,428)
|
|
|
(220)
|
Comprehensive
income (loss)
|
|
1,603,230
|
|
|
(11,244,992)
|
|
|
(1,732,477)
|
|
5,765,577
|
|
|
(2,520,604)
|
|
|
(388,342)
|
Less: Comprehensive
income attributable to non-controlling interest
|
|
434,920
|
|
|
13,643
|
|
|
2,102
|
|
434,961
|
|
|
(2,977)
|
|
|
(459)
|
Comprehensive
income (loss) attributable to Recon Technology, Ltd
|
|
1,168,310
|
|
|
(11,258,635)
|
|
$
|
(1,734,579)
|
|
5,330,616
|
|
|
(2,517,627)
|
|
$
|
(387,883)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss)
per common share - basic
|
|
0.25
|
|
|
(2.07)
|
|
$
|
(0.32)
|
|
1.13
|
|
|
(0.45)
|
|
$
|
(0.07)
|
Earnings (loss)
per common share - diluted
|
|
0.24
|
|
|
(2.07)
|
|
$
|
(0.32)
|
|
1.10
|
|
|
(0.45)
|
|
$
|
(0.07)
|
Weighted - average
shares - basic
|
|
4,741,911
|
|
|
5,503,932
|
|
|
5,503,932
|
|
4,726,711
|
|
|
5,569,102
|
|
|
5,569,102
|
Weighted - average
shares - diluted
|
|
4,846,270
|
|
|
5,503,932
|
|
|
5,503,932
|
|
4,820,817
|
|
|
5,569,102
|
|
|
5,569,102
|
RECON TECHNOLOGY,
LTD
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
For the six months
ended December 31,
|
|
2014
|
|
2015
|
|
2015
|
|
RMB
|
|
RMB
|
|
U.S.
Dollars
|
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
1,598,504
|
|
|
(11,367,782)
|
|
$
|
(1,751,395)
|
Adjustments to
reconcile net income (loss) to net cash provided by (used
in) operating activities:
|
|
|
|
|
|
|
|
|
Depreciation
|
|
274,511
|
|
|
496,070
|
|
|
76,428
|
Loss (Gain) from
disposal of equipment
|
|
(149,480)
|
|
|
10,594
|
|
|
1,632
|
Provision for
doubtful accounts
|
|
104,589
|
|
|
2,153,337
|
|
|
331,757
|
Provision for slow
moving inventories
|
|
-
|
|
|
(87,558)
|
|
|
(13,490)
|
Share based
compensation
|
|
1,115,030
|
|
|
2,573,575
|
|
|
396,502
|
Deferred tax benefit
(provision)
|
|
(27,977)
|
|
|
187,814
|
|
|
28,936
|
Change in fair value
of warrants liability
|
|
(4,077,517)
|
|
|
-
|
|
|
-
|
Restricted shares
issued for services
|
|
1,171,331
|
|
|
566,361
|
|
|
87,257
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Notes
receivable
|
|
(2,977,565)
|
|
|
1,178,710
|
|
|
181,600
|
Trade accounts
receivable
|
|
(8,572,529)
|
|
|
(13,793,992)
|
|
|
(2,125,193)
|
Trade accounts
receivable-related parties
|
|
6,104,734
|
|
|
4,569,800
|
|
|
704,053
|
Inventories
|
|
(4,833,407)
|
|
|
3,151,863
|
|
|
485,597
|
Other receivable,
net
|
|
(7,635,508)
|
|
|
(314,689)
|
|
|
(48,483)
|
Other receivables
related parties, net
|
|
1,414,433
|
|
|
91,021
|
|
|
14,023
|
Purchase advance,
net
|
|
2,641,583
|
|
|
4,567,724
|
|
|
703,734
|
Purchase
advance-related party, net
|
|
-
|
|
|
394,034
|
|
|
60,707
|
Prepaid
expense
|
|
(2,127,821)
|
|
|
599,377
|
|
|
92,344
|
Prepaid expense -
related party, net
|
|
230,000
|
|
|
420,000
|
|
|
64,708
|
Trade accounts
payable
|
|
1,188,511
|
|
|
10,906,370
|
|
|
1,680,307
|
Trade accounts
payable-related parties
|
|
-
|
|
|
(791,826)
|
|
|
(121,994)
|
Other
payables
|
|
(137,403)
|
|
|
(172,431)
|
|
|
(26,566)
|
Other
payables-related parties
|
|
290,738
|
|
|
(2,837,536)
|
|
|
(437,169)
|
Deferred
income
|
|
(1,223,397)
|
|
|
(1,834,349)
|
|
|
(282,612)
|
Advances from
customers
|
|
(417,185)
|
|
|
(207,251)
|
|
|
(31,930)
|
Accrued payroll and
employees' welfare
|
|
(132,687)
|
|
|
224,033
|
|
|
34,516
|
Accrued
expenses
|
|
9,327
|
|
|
35,292
|
|
|
5,437
|
Taxes
payable
|
|
779,567
|
|
|
271,229
|
|
|
41,787
|
Net cash provided by (used
in) operating activities
|
|
(15,389,618)
|
|
|
989,790
|
|
|
152,494
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchase of property
and equipment
|
|
(514,009)
|
|
|
(498,470)
|
|
|
(76,798)
|
Proceeds from
disposal of equipment
|
|
341,880
|
|
|
-
|
|
|
-
|
Net cash provided by (used
in) investing activities
|
|
(172,129)
|
|
|
(498,470)
|
|
|
(76,798)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Repayments of
short-term bank loans
|
|
(2,000,000)
|
|
|
(500,000)
|
|
|
(77,033)
|
Proceeds from
short-term borrowings-related parties
|
|
9,400,000
|
|
|
6,000,000
|
|
|
924,400
|
Repayment of
short-term borrowings-related parties
|
|
(5,000,000)
|
|
|
(15,522,619)
|
|
|
(2,391,517)
|
Proceeds from sale of
common stock, net of issuance costs
|
|
-
|
|
|
169,398
|
|
|
26,098
|
Net cash provided
by financing activities
|
|
2,400,000
|
|
|
(9,853,221)
|
|
|
(1,518,052)
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate fluctuation on cash and cash
equivalents
|
|
15,125
|
|
|
125,302
|
|
|
19,306
|
|
|
|
|
|
|
|
|
|
Net decrease in
cash and cash equivalents
|
|
(13,146,622)
|
|
|
(9,236,599)
|
|
|
(1,423,051)
|
Cash and cash
equivalents at beginning of year
|
|
18,094,586
|
|
|
12,344,929
|
|
|
1,901,941
|
Cash and cash
equivalents at end of year
|
|
4,947,964
|
|
|
3,108,330
|
|
$
|
478,890
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information
|
|
|
|
|
|
|
|
|
Cash paid during
the period for interest
|
|
510,956
|
|
|
474,200
|
|
$
|
73,058
|
Cash paid during
the period for taxes
|
|
203,073
|
|
|
72,217
|
|
$
|
11,126
|
|
|
|
|
|
|
|
|
|
Non-cash investing
and financing activities
|
|
|
|
|
|
|
|
|
Issuance of common
stock to prepay professional services
|
|
1,002,721
|
|
|
2,265,442
|
|
$
|
349,029.00
|
Non-cash transaction
for AR and loan payable offset
|
|
-
|
|
|
200,000
|
|
|
30,813
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/recon-technology-ltd-reports-fiscal-year-2016-second-quarter-financial-results-300220483.html
SOURCE Recon Technology, Ltd.