BEIJING, Nov. 14, 2016 /PRNewswire/ --
- Revenue grew 117% YoY; gross profit increased 172% and gross margin improved 280 basis points YoY
Recon Technology (the "Company" or "Recon") (NASDAQ:
RCON), ("Recon" or the "Company"), a leading independent
oilfield services provider operating primarily in China, today reported its financial
results for the first quarter of fiscal year 2017, which
ended September 30, 2016.
Q1 FY2017 Financial Highlights:
- Total revenues for Q1 FY2017 were RMB7.8
million ($1.2 million),* an
increase of RMB4.2 million or 117.1%
from RMB3.6 million for the same
period last fiscal year;
- Gross profit increased 171.9% to RMB1.1
million ($0.2 million) for the
three months ended September 30, 2016
from RMB0.4 million for the same
period in 2015;
- Gross margin improved more than 280 basis points to 14.0% in Q1
FY2017, compared to 11.2% for the same period last fiscal
year;
- Newly launched Oilfield waste management business saw
RMB1.9 million ($0.3 million) in revenues, as compared to
RMB0 in the same period of last
year;
- Operating loss was RMB5.5 million
($0.8 million) for the first quarter
of FY2017, compared to a loss of RMB8.7
million for the same period last fiscal year;
- Net loss and net loss attributable to ordinary shareholders for
Q1 FY2017 was RMB5.5 million
($0.8 million), or RMB0.92 ($0.14) per
diluted share, compared to RMB8.8
million, or RMB1.63
($0.26) per diluted share, for the
same period last fiscal year.
*
|
Courtesy foreign
exchange rates are calculated based on RMB 6.6702:
US$1.00.
|
Mr. Shenping Yin, Chairman and
CEO of Recon stated, "We continued to develop and expand our new
oilfield waste management business this quarter. We are pleased
with these results so far in fiscal 2017. And we look forward to
expanding more business sectors and potential markets in the
following quarters."
Q1 FY2017 Financial Results
|
For the Three Months
Ended September 30,
|
(thousands)
|
2015
RMB
|
2016
RMB
|
2016
USD
|
%
Change
|
Revenues
|
3,594
|
7,802
|
1,169
|
117.10%
|
Hardware and
software
|
3,481
|
7,802
|
1,169
|
124.10%
|
Service
|
113
|
-
|
-
|
-100%
|
Gross
margin
|
11.20%
|
14%
|
14%
|
2.80%
|
Net income (loss)
attributable to RCON
|
(8,849)
|
(5,461)
|
(818)
|
38.30%
|
Revenues
Revenues for the three months ended September 30, 2016 were RMB7.8 million ($1.2
million), an increase of RMB4.2
million or 117.1% from RMB3.6
million for the three months ended September 30, 2015. The overall increase in
revenue was mainly caused by our increased hardware and software
revenue. In particular, (a) revenue from automation products and
embedded software increased slightly to RMB2.1 million; (b) revenues from equipment and
accessories increased by RMB2.3
million, or 160.5%, to RMB3.8
million for the three months ended September 30, 2016, as compared to RMB1.5 million for the same period of last fiscal
year; and (c) as of first quarter of fiscal year 2017, the new
oilfield waste water treatment products segment contributed RMB1.9
million revenue to our operations.
Gross Profit and Gross Margin
Cost of revenues increased from RMB3.2
million in the three months ended September 30, 2015 to RMB6.7 million ($1.0
million) for the same period in 2016, an increase of
approximately RMB3.5 million
($0.5 million), or 110.2%.
Gross profit increased to approximately RMB1.1 million ($0.2
million) for the three months ended September 30, 2016 from approximately
RMB0.4 million for the same period in
2015. Gross profit as a percentage of revenue increased to 14.0%
for the three months ended September 30,
2016 from 11.2% for the same period in 2015.
Operating Loss and Operating Loss Margin
Selling expenses decreased approximately RMB62.5 thousand ($9.4
thousand) for the three months ended September 30, 2016 compared to the same period in
2015. General and administrative expenses increased by 20.5% or
RMB0.8 million ($0.1 million), from RMB4.1 million in the three months ended
September 30, 2015 to RMB4.9 million ($0.7
million) in the same period of 2016. Research and
development expenses decreased from approximately RMB1.8 million for three months ended
September 30, 2015 to approximately
RMB0.6 million ($0.1 million) for the same period of 2016. Total
operating expenses decreased by RMB2.5
million, or 27.6%, to RMB6.6
million ($1.0 million) for the
three months ended September 30, 2016
from RMB9.08 million for the same
period during last fiscal year.
Operating loss was approximately RMB5.5
million ($0.8 million) for the
three months ended September 30,
2016, compared to a loss of RMB8.7
million for the same period of 2015.
Net Loss
Net loss and net loss attributable to ordinary shareholders for
the three months ended September 30,
2016 was RMB5.5 million
($0.8 million), or RMB0.92 ($0.14) per
diluted share, compared to RMB8.85
million, or RMB1.63
($0.26) per diluted share, for the
same period last fiscal year.
Financial Position
As of September 30, 2016, the
Company had cash and cash equivalents of RMB0.6 million ($0.08
million), and short-term borrowings from related parties of
RMB12.5 million ($1.9 million), compared to RMB3.9 million and RMB9.4
million, respectively, for the same period last fiscal year.
Working capital as of September 30,
2016 was RMB41.2 million
($6.2 million) as compared to
RMB66.5 million at September 30, 2015. Net cash used in operating
activities was RMB0.3 million
($0.05 million) for the three months
ended September 30, 2016, compared to
RMB1.0 million for the same period of
last fiscal year. Net cash used in investing activities was
RMB22.3 thousand ($3.3 thousand) for the three months ended
September 30, 2016, compared to
RMB0.5 million for the same period of
last fiscal year. Net cash used in financing activities was
RMB1.0 million ($0.1 million) for the three months ended
September 30, 2016, compared to
RMB7.1 million ($1.1 million) for the same period last fiscal
year.
Recent Developments
As of the first quarter of fiscal year 2017, the Company has
achieved remarkable achievement in its oilfield waste water
treatment segment. In January 2016,
the Company announced its cooperation with Qinghai Oilfield
Company, signing an agreement to sell the oilfield RMB3.98 million of related products and services.
For the three months period ended September
30, 2016, the Company has completed this agreement and
continues to expand markets in the environmental protection
industry, including oilfield water treatment and other industrial
and sewage disposal projects.
The Company has also developed new clients China's top producing Changqing Oilfield,
which is located in China's
Xi'an Province.
About Recon
Recon Technology, Ltd. is China's first listed non-state owned oil and
gas field service company on Nasdaq (RCON). Recon supplies
China's largest oil exploration
companies, Sinopec and CNPC, with advanced automated technologies,
efficient gathering and transportation equipment and reservoir
stimulation measure for increasing petroleum extraction levels,
reducing impurities and lowering production costs. Through the
years, RCON has taken leading positions on several segmented
markets of the oil and gas filed service industry. RCON also has
developed stable long-term cooperation relationship with its major
clients, and its products and service are also well accepted by
clients. For additional information please visit us at
www.recon.cn.
Safe Harbor
This news release contains forward-looking statements as
defined by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements that are other than
statements of historical facts. These statements are subject to
uncertainties and risks including, but not limited to, product and
service demand and acceptance, changes in technology, economic
conditions, the impact of competition and pricing, government
regulation, and other risks contained in reports filed by the
company with the Securities and Exchange Commission. All such
forward-looking statements, whether written or oral, and whether
made by or on behalf of the company, are expressly qualified by the
cautionary statements and any other cautionary statements which may
accompany the forward-looking statements. In addition, the company
disclaims any obligation to update any forward-looking statements
to reflect events or circumstances after the date hereof.
Company Contact
Liu Jia
Recon Technology, Ltd.
+86 (10) 84945799
info@recon.cn
RECON TECHNOLOGY,
LTD
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED)
|
|
|
As of
June 30,
|
|
As of
September 30,
|
|
As of
September 30,
|
2016
|
2016
|
2016
|
ASSETS
|
RMB
|
|
RMB
|
|
U.S.
Dollars
|
Current
assets
|
|
|
|
|
|
Cash
|
1,817,620
|
|
554,630
|
|
83,150
|
Notes
receivable
|
4,660,177
|
|
3,105,770
|
|
465,617
|
Trade accounts
receivable, net
|
38,097,626
|
|
37,267,708
|
|
5,587,178
|
Inventories,
net
|
6,313,070
|
|
6,339,234
|
|
950,379
|
Other receivables,
net
|
22,000,112
|
|
20,101,962
|
|
3,013,688
|
Purchase advances,
net
|
1,323,305
|
|
4,000,124
|
|
599,699
|
Prepaid
expenses
|
110,310
|
|
55,260
|
|
8,285
|
Total current
assets
|
74,322,220
|
|
71,424,688
|
|
10,707,996
|
Property and
equipment, net
|
2,907,762
|
|
2,723,363
|
|
408,287
|
Long-term trade
accounts receivable, net
|
2,220,332
|
|
2,220,332
|
|
332,872
|
Total
Assets
|
79,450,314
|
|
76,368,383
|
|
11,449,155
|
|
Current
liabilities
|
|
|
|
|
|
Trade accounts
payable
|
7,540,430
|
|
9,267,662
|
|
1,389,409
|
Other
payables
|
2,972,192
|
|
2,787,443
|
|
417,894
|
Other payable-
related parties
|
3,680,244
|
|
3,712,698
|
|
556,608
|
Deferred
revenue
|
406,681
|
|
231,187
|
|
34,660
|
Advances from
customers
|
200,600
|
|
200,100
|
|
29,999
|
Accrued payroll and
employees' welfare
|
381,109
|
|
499,155
|
|
74,833
|
Accrued
expenses
|
261,348
|
|
193,274
|
|
28,974
|
Taxes
payable
|
755,880
|
|
683,148
|
|
102,418
|
Short-term
borrowings
|
530,000
|
|
-
|
|
-
|
Short-term borrowings
- related parties
|
12,941,848
|
|
12,515,253
|
|
1,876,288
|
Deferred tax
liability
|
180,186
|
|
180,186
|
|
27,014
|
Total current
liabilities
|
29,850,518
|
|
30,270,106
|
|
4,538,097
|
Equity
|
|
|
|
|
|
Common stock, ($
0.0185 U.S. dollar par value, 100,000,000 shares authorized;
5,804,005 and 5,980,792 shares issued and outstanding as of June
30, 2016 and September 30, 2016, respectively)
|
|
|
|
|
|
|
|
|
|
|
|
741,467
|
763,340
|
114,440
|
Additional paid-in
capital
|
100,612,455
|
|
102,557,249
|
|
15,375,392
|
Statutory
reserve
|
4,148,929
|
|
4,148,929
|
|
622,008
|
Accumulated
deficits
|
(63,907,512)
|
|
(69,368,096)
|
|
(10,399,671)
|
Accumulated other
comprehensive loss
|
(219,040)
|
|
(226,642)
|
|
(33,978)
|
Total
shareholders' equity
|
41,376,299
|
|
37,874,780
|
|
5,678,191
|
Non-controlling
interest
|
8,223,497
|
|
8,223,497
|
|
1,232,867
|
Total
equity
|
49,599,796
|
|
46,098,277
|
|
6,911,058
|
Total Liabilities
and Equity
|
79,450,314
|
|
76,368,383
|
|
11,449,155
|
|
The accompanying
notes are an integral part of these unaudited condensed
consolidated financial statements
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
RECON TECHNOLOGY,
LTD
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
|
(UNAUDITED)
|
|
For the three
months ended
|
|
September
30,
|
|
2015
|
|
2016
|
|
2016
|
|
RMB
|
|
RMB
|
|
USD
|
Revenues
|
|
|
|
|
|
Hardware and
software
|
3,480,752
|
|
7,802,103
|
|
1,169,692
|
Service
|
113,208
|
|
-
|
|
-
|
Total
revenues
|
3,593,960
|
|
7,802,103
|
|
1,169,692
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
|
|
|
Hardware and
software
|
3,315,627
|
|
6,447,643
|
|
966,632
|
Provision for
(reversal of) slow moving inventories
|
(123,332)
|
|
262,135
|
|
39,299
|
Total cost of
revenues
|
3,192,295
|
|
6,709,778
|
|
1,005,931
|
Gross
profit
|
401,665
|
|
1,092,325
|
|
163,761
|
Selling and
distribution expenses
|
1,112,670
|
|
1,050,141
|
|
157,437
|
General and
administrative expenses
|
4,067,219
|
|
4,899,328
|
|
734,508
|
Provision for
doubtful accounts
|
2,109,926
|
|
8,026
|
|
1,203
|
Research and
development expenses
|
1,792,997
|
|
618,674
|
|
92,752
|
Operating
expenses
|
9,082,812
|
|
6,576,169
|
|
985,900
|
|
|
|
|
|
|
Loss from
operations
|
(8,681,147)
|
|
(5,483,844)
|
|
(822,139)
|
Other income
(expenses)
|
|
|
|
|
|
Subsidy
income
|
49,000
|
|
7,807
|
|
1,170
|
Interest
income
|
55,510
|
|
27,894
|
|
4,182
|
Interest
expense
|
(277,824)
|
|
(132,490)
|
|
(19,863)
|
Income (loss) from
foreign currency exchange
|
(938)
|
|
388
|
|
58
|
Other income
(expense)
|
(9,664)
|
|
99,518
|
|
14,920
|
Other income
(expense)
|
(183,916)
|
|
3,117
|
|
467
|
Loss before income
tax
|
(8,865,063)
|
|
(5,480,727)
|
|
(821,672)
|
Benefit for income
tax
|
(16,457)
|
|
(20,143)
|
|
(3,020)
|
Net
loss
|
(8,848,606)
|
|
(5,460,584)
|
|
(818,652)
|
Comprehensive
loss
|
|
|
|
|
|
Net loss
|
(8,848,606)
|
|
(5,460,584)
|
|
(818,652)
|
Foreign currency
translation adjustment
|
124,218
|
|
(7,602)
|
|
(1,140)
|
Comprehensive
loss
|
(8,724,388)
|
|
(5,468,186)
|
|
(819,792)
|
Less: Comprehensive
loss attributable to non-controlling interest
|
16,620
|
|
-
|
|
-
|
Comprehensive loss
attributable to Recon Technology, Ltd
|
(8,741,008)
|
|
(5,468,186)
|
|
(819,792)
|
|
|
|
|
|
|
Loss per common
share - basic and diluted
|
(1.63)
|
|
(0.92)
|
|
(0.14)
|
Weighted - average
shares -basic and diluted
|
5,438,763
|
|
5,957,733
|
|
5,957,733
|
|
|
|
The accompanying
notes are an integral part of these unaudited condensed
consolidated financial statements
|
|
|
|
|
|
|
|
|
|
|
|
|
RECON TECHNOLOGY,
LTD
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
For the three
months ended September
30,
|
|
2015
|
|
2016
|
|
2016
|
|
RMB
|
|
RMB
|
|
U.S.
Dollars
|
Cash flows from
operating activities:
|
|
|
|
|
|
Net
loss
|
(8,848,606)
|
|
(5,460,584)
|
|
(818,652)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
Depreciation
|
259,768
|
|
205,580
|
|
30,821
|
Gain from disposal of
equipment
|
-
|
|
(35,919)
|
|
(5,385)
|
Provision for
doubtful accounts
|
2,109,926
|
|
8,026
|
|
1,203
|
Provision for
(reversal of) slow moving inventories
|
(123,332)
|
|
262,135
|
|
39,299
|
Share based
compensation
|
1,126,552
|
|
1,966,670
|
|
294,843
|
Deferred tax
benefit
|
(16,458)
|
|
-
|
|
-
|
Restricted shares
issued for services
|
202,475
|
|
-
|
|
-
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
Notes
receivable
|
977,950
|
|
1,554,407
|
|
233,037
|
Trade accounts
receivable
|
1,685,745
|
|
1,035,863
|
|
155,297
|
Trade accounts
receivable-related parties
|
4,569,800
|
|
-
|
|
-
|
Inventories
|
(908,544)
|
|
(288,299)
|
|
(43,222)
|
Other receivable,
net
|
(419,821)
|
|
1,866,616
|
|
279,843
|
Other
receivables-related parties, net
|
91,021
|
|
-
|
|
-
|
Purchase advance,
net
|
(847,071)
|
|
(2,873,141)
|
|
(430,742)
|
Purchase
advance-related parties, net
|
394,034
|
|
-
|
|
-
|
Prepaid
expense
|
216,619
|
|
55,050
|
|
8,253
|
Prepaid expense -
related parties, net
|
210,000
|
|
-
|
|
-
|
Trade accounts
payable
|
(217,263)
|
|
1,727,232
|
|
258,947
|
Trade accounts
payable-related parties
|
(254,826)
|
|
-
|
|
-
|
Other
payables
|
(308,852)
|
|
(184,749)
|
|
(27,698)
|
Other
payables-related parties
|
(2,465,074)
|
|
32,454
|
|
4,866
|
Deferred
revenue
|
166,982
|
|
(175,494)
|
|
(26,310)
|
Advances from
customers
|
(158,716)
|
|
(500)
|
|
(75)
|
Accrued payroll and
employees' welfare
|
83,268
|
|
118,046
|
|
17,697
|
Accrued
expenses
|
(7,505)
|
|
(56,539)
|
|
(8,476)
|
Taxes
payable
|
1,507,434
|
|
(80,273)
|
|
(12,035)
|
Net cash used in
operating activities
|
(974,494)
|
|
(323,419)
|
|
(48,489)
|
Cash flows from
investing activities:
|
|
|
|
|
|
Purchase of property
and equipment
|
(470,265)
|
|
(29,621)
|
|
(4,441)
|
Proceeds from
disposal of equipment
|
-
|
|
51,900
|
|
7,781
|
Net cash provided
by (used in) investing activities
|
(470,265)
|
|
22,279
|
|
3,340
|
Cash flows from
financing activities:
|
|
|
|
|
|
Repayment of
short-term borrowings
|
-
|
|
(530,000)
|
|
(79,458)
|
Proceeds from
short-term borrowings-related parties
|
1,800,000
|
|
4,838,318
|
|
725,361
|
Repayment of
short-term borrowings-related parties
|
(9,100,000)
|
|
(5,276,448)
|
|
(791,046)
|
Proceeds from sale of
common stock, net of issuance costs
|
165,823
|
|
-
|
|
-
|
Net cash used in
financing activities
|
(7,134,177)
|
|
(968,130)
|
|
(145,143)
|
Effect of exchange
rate fluctuation on cash and cash equivalents
|
111,279
|
|
6,280
|
|
943
|
Net decrease in
cash
|
(8,467,657)
|
|
(1,262,990)
|
|
(189,349)
|
Cash at beginning
of period
|
12,344,929
|
|
1,817,620
|
|
272,498
|
Cash at end of
period
|
3,877,272
|
|
554,630
|
|
83,149
|
|
Supplemental cash
flow information
|
|
|
|
|
|
Cash paid during
the period for interest
|
277,824
|
|
167,403
|
|
25,097
|
Cash paid during
the period for taxes
|
72,217
|
|
-
|
|
-
|
Non-cash investing
and financing activities
|
|
|
|
|
|
AR and short-term
borrowings-related parties offset
|
200,000
|
|
-
|
|
-
|
|
|
|
The accompanying
notes are an integral part of these unaudited condensed
consolidated financial statements
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/recon-technology-ltd-reports-first-quarter-fiscal-year-2017-financial-results-300361973.html
SOURCE Recon Technology, Ltd.