BEIJING, Nov. 15, 2017 /PRNewswire/ -- Recon Technology,
Ltd. (NASDAQ: RCON), ("Recon" or the "Company"), a China-based independent solutions integrator
in the oilfield service, electric power and coal chemical
industries, today reported its financial
results for the first quarter and first three months of
fiscal year 2018, which ended September 30, 2017.
First Quarter FY2018 Financial Highlights (all comparable to
the prior year period):
- Total revenues for the first quarter of FY2018 increased by 56%
to RMB 12.2 million ($1.8 million);
- Gross profit for the first quarter of FY2018 was RMB 2.1 million ($0.3
million);
- Gross profit margin increased to 17.2%, largely due to
continued higher margin generated from automation business;
- Net loss attributable to Recon for the first quarter of FY2018
was RMB 6.7 million ($1.0 million), or RMB
0.97 ($0.15) per basic and
diluted share, compared to net loss attributable to Recon of
RMB 5.5 million, or RMB 0.92 per basic and diluted share, for the
same period of last fiscal year;
- Non-GAAP net loss attributable to common shareholders excluding
certain non-cash expenses was RMB 2.3
million ($341,093), or
RMB 0.33 ($0.05) per basic and diluted share, for the
first quarter of FY2018, compared to non-GAAP net loss attributable
to common shareholders of RMB 3.2
million, or RMB 0.54 per basic
and diluted share, for the same period last fiscal year.
Management Commentary
Mr. Shenping Yin, Chairman and
CEO of Recon stated, "Revenue of this quarter is mainly driven by
equipment and integration of automation business, the basic two
legs of Recon, as we stated in our open letter to shareholders
(Refer to the following link for more details:
http://recon.mediaroom.com/2017-06-12-Recon-Outlines-2017-Strategy-and-China-Oil-and-Gas-Market-Outlook-in-Open-Letter-to-Shareholders?pagetemplate=widgetpopup).
As most of our projects of waste water treatments are currently in
progress, we expect revenue of this business line will contribute
significantly to the overall revenues in the coming quarters. The
rally in crude prices helped generate positive sentiment and we did
see more investments in oil extraction by our clients and thus more
opportunities for Recon. Based on our current estimation, we remain
confident in our ability to achieve our goal of a minimum 30%
increase in revenues for this fiscal year. This estimation was also
mentioned by the open letter to shareholders as above."
Mr. Yin continued, "Our Gansu subsidiary construction projects,
focusing on oilfield sewage treatment and oily sludge disposal
treatment project with an annual processing capacity of 60,000 tons
of oily waste ("Project"), is also proceeding well (Refer to the
following link for more details:
http://recon.mediaroom.com/2017-11-07-Recon-Announces-Investment-to-Expand-Services-for-Oily-Sludge-Market-in-Yumen-Oilfield?pagetemplate=widgetpopup).
Total investment of this project is expected to about RMB100 million. Approximately RMB5.4 million, which mainly consisted of the
purchase of land use right and prepayment for equipments and
construction supplies, has been devoted into the first stage of
construction. We expect this project to be operational by
June 2018 and annual revenue to be
generated by the Project is estimated to be over RMB 50 million."
Results of Operations
The following unaudited condensed consolidated results of
operations which include the Company's wholly owned subsidiaries,
their variable interest entities ("VIEs") and VIE's subsidiaries.
The VIEs are Nanjing Recon Technology Co. Ltd ("Nanjing Recon"),
Beijing BHD Petroleum Technology Co, Ltd ("BHD"). BHD owns 100% of
the equity interest of Huang Hua BHD Petroleum Equipment
Manufacturing Co. LTD ("HH BHD") and 51% of the equity interest of
Gansu BHD Environmental Technology Ltd ("Gansu BHD").
On November 25, 2016, the Company
began reporting under Rule 3b-4 of the Securities Exchange Act of
1934 as a foreign private issuer, including the filing of annual
reports on Form 20-F and current reports on Form 6-K. By this
current report on Form 6-K, Recon has provided selected fiscal 2018
first quarter results, with greater detail on its first quarter
financial results.
The translation has been made at the rate of US$ 1.0: RMB 6.65,
the approximate exchange rate prevailing on September 30, 2017.
Selected Financial
Highlights in RMB
(in 000s, except number of shares and per share data)
|
|
3 months ended
September 30, 2016
|
|
3 months ended
September 30, 2017
|
Sales
|
|
7,802
|
|
|
12,171
|
Cost of
Revenues
|
|
6,710
|
|
|
10,077
|
Gross
Profit
|
|
1,092
|
|
|
2,094
|
Gross Profit
Margin
|
|
14%
|
|
|
17%
|
|
|
|
|
|
|
Loss from
Operations
|
|
(5,484)
|
|
|
(6,868)
|
|
|
|
|
|
|
Net Loss Attributable
to Recon Technology, Ltd
|
|
(5,461)
|
|
|
(6,745)
|
Non U.S. GAAP Net
Loss attributable to common stockholders
|
|
(3,224)
|
|
|
(2,270)
|
Basic and Weighted
Average Number of Diluted Common Shares
Outstanding
|
|
5,957,733
|
|
|
6,919,001
|
Basic and Diluted
Loss per Share
|
|
(0.92)
|
|
|
(0.97)
|
Non U.S. GAAP
adjusted loss per basic and diluted share
|
|
(0.54)
|
|
|
(0.33)
|
3 MONTHS ENDED
SEPTEMBER 30, 2017 UNAUDITED FINANCIAL RESULTS
|
Revenue
|
|
|
For the Three
Months Ended
|
|
September
30,
|
|
|
|
|
|
|
|
Percentage
|
|
2016
|
|
2017
|
|
Increase
|
|
Change
|
Hardware and
software
|
¥
|
7,802,103
|
|
¥
|
12,170,614
|
|
¥
|
4,368,511
|
|
|
56.0%
|
Total
revenues
|
¥
|
7,802,103
|
|
¥
|
12,170,614
|
|
¥
|
4,368,511
|
|
|
56.0%
|
|
Total revenues for the three
months ended September 30, 2017 were approximately ¥12.2 million
($1.8 million),
representing an increase of approximately ¥4.4 million or 56.0%
from ¥7.8 million for the three months ended
September 30, 2016. The overall increase in revenue was
accomplished through Recon's expansion of new clients and
development of new business. See below for more details:
|
|
|
For the Three
Months Ended
|
|
September
30,
|
|
|
|
|
|
Increase
/
|
|
Percentage
|
|
2016
|
|
2017
|
|
(Decrease)
|
|
Change
|
Automation product
and software
|
¥
|
2,076,736
|
|
¥
|
5,513,331
|
|
¥
|
3,436,595
|
|
|
165.5%
|
Equipment and
accessories
|
|
3,803,918
|
|
|
6,462,925
|
|
|
2,659,007
|
|
|
69.9%
|
Waste water treatment
products
|
|
1,921,449
|
|
|
194,358
|
|
|
(1,727,091)
|
|
|
(89.9)%
|
Total revenue -
Hardware and software
|
¥
|
7,802,103
|
|
¥
|
12,170,614
|
|
¥
|
4,368,511
|
|
|
56.0%
|
|
(1) As shown above,
the overall increase in revenue was primarily from increased sales
of automation products
and software as well as equipment,
primarily more furnaces provided to Changqing Oilfield, a major
subsidiary of Petro China and the largest
producing oilfield of China.
|
(2) Revenue from
waste water treatment products decreased by ¥1.7 million or 89.9%
as most of Recon's
wastewater treatment projects were not
finished thus few revenue was recorded in the quarter.
|
|
|
Cost and
Margin
|
|
|
For the Three
Months Ended
|
|
September
30,
|
|
|
|
|
|
Increase
/
|
|
Percentage
|
|
2016
|
|
2017
|
|
(Decrease)
|
|
Change
|
Total
revenues
|
¥
|
7,802,103
|
|
¥
|
12,170,614
|
|
¥
|
4,368,511
|
|
|
56.0%
|
Cost of
revenues
|
|
6,709,778
|
|
|
10,077,045
|
|
|
3,367,267
|
|
|
50.2%
|
Gross
profit
|
¥
|
1,092,325
|
|
¥
|
2,093,569
|
|
¥
|
1,001,244
|
|
|
91.7%
|
Margin %
|
|
14.0%
|
|
|
17.2%
|
|
|
3.2%
|
|
|
-
|
Cost of Revenues. Recon's cost of revenues increased from
approximately ¥6.7 million for the three months ended September 30, 2016 to approximately ¥10.1 million
($1.5 million) for the same period in
2017, representing an increase of approximately ¥3.4 million
($0.5 million), or 50.2%. This
increase was mainly due to increased costs deriving from additional
revenue generated from automation products and equipment than the
same period of last year.
Gross Profit. Recon's gross profit increased to approximately
¥2.1 million ($0.3 million) for the
three months ended September 30, 2017
from approximately ¥1.1 million for the same period in 2016.
Recon's gross profit as a percentage of revenue increased to 17.2%
for the three months ended September 30,
2017 from 14.0% for the same period in 2016. This was mainly
due to higher margin automation projects and equipment business
during this period, which led to the increase in revenues more than
the increase in Recon's cost of revenues.
Operating Expenses
|
For the Three
Months Ended
|
|
September
30,
|
|
|
|
|
|
Increase
/
|
|
Percentage
|
|
2016
|
|
2017
|
|
(Decrease)
|
|
Change
|
Selling and
distribution expenses
|
¥
|
1,050,141
|
|
¥
|
1,086,200
|
|
¥
|
36,059
|
|
|
3.4%
|
% of
revenue
|
|
13.5%
|
|
|
8.9%
|
|
|
(4.6)%
|
|
|
-
|
General and
administrative expenses
|
|
4,899,328
|
|
|
7,022,780
|
|
|
2,123,452
|
|
|
43.3%
|
% of
revenue
|
|
62.8%
|
|
|
57.7%
|
|
|
(5.1)%
|
|
|
-
|
Provision for
doubtful accounts
|
|
8,026
|
|
|
297,571
|
|
|
289,545
|
|
|
3,607.6%
|
% of
revenue
|
|
0.1%
|
|
|
2.4%
|
|
|
2.3%
|
|
|
-
|
Research and
development expenses
|
|
618,674
|
|
|
554,782
|
|
|
(63,892)
|
|
|
(10.3)%
|
% of
revenue
|
|
7.9%
|
|
|
4.6%
|
|
|
(3.3)%
|
|
|
-
|
Operating
expenses
|
¥
|
6,576,169
|
|
¥
|
8,961,333
|
|
¥
|
2,385,164
|
|
|
36.3%
|
Selling and Distribution Expenses. Selling and distribution
expenses consist primarily of salaries and related expenditures of
Recon's sales and marketing organization, sales commissions, costs
of Recon's marketing programs including traveling charges,
advertising and trade shows, and rental expense, as well as
shipping charges. Selling expenses increased by approximately
¥36,100 (approximately $5,400) for
the three months ended September 30,
2017 compared to the same period in 2016. This increase was
primarily due to an increase in meal and entertainment expenses,
partly offset by a decreased traveling expense. Selling expenses
were 8.9% of total revenues for the three months ended September 30, 2017 and 13.5% of total revenues in
the same period of 2016.
General and Administrative Expenses. General and administrative
expenses consist primarily of costs in human resources, facilities
costs, depreciation expenses, professional advisor fees, audit
fees, stock based compensation expense and other miscellaneous
expenses incurred in connection with general operations. General
and administrative expenses increased by 43.3% or ¥2.1 million
(approximately $0.3 million), from
approximately ¥4.9 million in the three months ended September 30, 2016 to approximately ¥7.0 million
(approximately $1.1 million) in the
same period of 2017. The increase in general and administrative
expenses was mainly due to an increase in and performance-based
compensation issued to management with an amount of ¥1.2 million
(approximately $0.2 million) and
investor relationship ("IR") expenses. General and administrative
expenses accounted 57.7% of total revenues in the three months
ended September 30, 2017 and 62.8% of
total revenues in the same period of 2016.
Provision for doubtful accounts. Provision for doubtful accounts
is the estimated amount of bad debt that will arise as a result of
uncollectibility from accounts receivables, other receivables and
purchase advances. We recorded a provision for doubtful accounts of
¥8,000 for three months ended September 30,
2016 and ¥0.3 million (approximately $44,715) for the same period in 2017. Management
will make efforts to collect long outstanding receivables.
Research and development ("R&D") expenses. Research and
development expenses consist primarily of salaries and related
expenditures for Recon's research and development projects.
Research and development expenses decreased slightly from ¥619,000
for the three months ended September 30,
2016 to ¥555,000 (approximately $0.1
million) for the same period of 2017.
Net Loss
|
For the Three
Months Ended
|
|
September
30,
|
|
|
|
|
|
Increase
/
|
|
Percentage
|
|
2016
|
|
2017
|
|
(Decrease)
|
|
Change
|
Loss from
operations
|
¥
|
(5,483,844)
|
|
¥
|
(6,867,764)
|
|
¥
|
(1,383,920)
|
|
|
(25.2)%
|
Other income,
net
|
|
3,117
|
|
|
74,086
|
|
|
70,969
|
|
|
2,276.8%
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(5,480,727)
|
|
|
(6,793,678)
|
|
|
(1,312,951)
|
|
|
24.0%
|
Income tax expenses
(benefits)
|
|
(20,143)
|
|
|
9,282
|
|
|
29,425
|
|
|
(146.1)%
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
(5,460,584)
|
|
|
(6,802,960)
|
|
|
(1,342,376)
|
|
|
24.6%
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Net loss
attributable to non-controlling
interest
|
|
-
|
|
|
(58,109)
|
|
|
(58,109)
|
|
|
100.0%
|
Net loss attributable
to Recon Technology, Ltd
|
¥
|
(5,460,584)
|
|
¥
|
(6,744,851)
|
|
¥
|
(1,284,267)
|
|
|
23.5%
|
Loss from operations. Loss from operations was ¥6.9 million
(approximately $1.0 million) for the
three months ended September 30,
2017, compared to a loss of ¥5.5 million for the same period
of 2016. This ¥1.4 million (approximately $0.2 million) increase in loss from operations
was primary due to higher meal & entertainment expenses, IR
expenses and performance-based compensation issued to
management.
Basic and diluted loss per share. Basic and diluted loss per
share attributable to common stockholders was RMB 0.97, as compared to RMB 0.92, for the three months ended September 30, 2016.
Non U.S. GAAP Net Loss
Non U.S. GAAP net loss attributable to common shareholders
excluding certain non-cash expenses (non-GAAP) such as restricted
shares issued for consulting services and non-cash stock
compensation expense was RMB
2,269,939 (approximately $341,093), or RMB
0.33 (approximately $0.05) per
diluted share, for the three months ended September 30, 2017, compared to non U.S. GAAP net
loss attributable to common shareholders of RMB 3,223,753, or RMB
0.54 per diluted share, for the same period last fiscal
year. Please see the note about non-GAAP measures and the
reconciliation table at the end of this press release.
LIQUIDITY AND CAPITAL RESOURCES
Selected Balance
Sheet Highlights in RMB
|
Conversion US$ 1.0:
RMB 6.65 at September 30, 2017
|
|
|
|
|
|
|
Percentage
|
|
9/30/2017
|
|
6/30/2017
|
|
Change
|
Cash
|
|
6,111,223
|
|
|
3,809,279
|
|
|
60.43%
|
Total Current
Assets
|
|
73,611,756
|
|
|
68,387,075
|
|
|
7.64%
|
Total
Assets
|
|
77,472,679
|
|
|
71,155,045
|
|
|
8.88%
|
Working
Capital
|
|
36,613,981
|
|
|
38,941,318
|
|
|
(5.98)%
|
Total Current
Liabilities
|
|
36,997,775
|
|
|
29,445,757
|
|
|
25.65%
|
Total Stockholders'
Equity
|
|
30,568,170
|
|
|
33,244,445
|
|
|
(8.05)%
|
Total Liabilities and
Stockholders' Equity
|
|
77,472,679
|
|
|
71,155,045
|
|
|
8.88%
|
Cash from Operating Activities. Net cash used in operating
activities was ¥1.7 million (approximately $0.3 million) for the three months ended
September 30, 2017. This was an
increase of ¥1.4 million (approximately $0.2
million) compared to net cash used in operating activities
of ¥0.3 million for the three months ended September 30, 2016. The increase in net cash used
in operating activities for the three months ended September 30, 2017 was primarily for purchases
for inventories of ¥2.3 million (approximately $0.3 million) and purchase advances of ¥3.9
million (approximately $0.6 million),
offset by amounts received from collection of both notes and trade
receivables.
Cash from Investing Activities. Net cash used in investing
activities was ¥1.3 million (approximately $0.2 million) for the three months ended
September 30, 2017, representing an
increase in cash used in investing activities of ¥1.3 million
(approximately $0.2 million) compared
to the same period in 2016. This increase was due to an increase in
the Company's prepayment for a land use right of 50 years.
Cash from Financing Activities. Net cash provided by financing
activities amounted to ¥5.3 million (approximately $0.8 million) for the three months ended
September 30, 2017, as compared to
net cash used in financing activities of ¥1.0 million for the same
period in 2016. During the three months ended September 30, 2017, we repaid ¥11.82 million
(approximately $1.8 million) in
short-term borrowings to related parties, and we received ¥11.0
million (approximately $1.7 million)
from related parties and received ¥4.6 million (approximately
$0.7 million) in short-term
borrowings from third-parties, and we received ¥1.5 million
(approximately $0.2 million) capital
contribution by a non-controlling shareholder.
STATEMENT REGARDING UNAUDITED FINANCIAL INFORMATION
The unaudited financial information set forth above is subject
to adjustments that may be identified when audit work is performed
on the Company's year-end financial statements, which could result
in significant differences from this unaudited financial
information.
Use of Non-GAAP Financial Measures
To supplement Recon's unaudited condensed consolidated financial
information presented in accordance with U.S. generally accepted
accounting principles ("GAAP"), Recon uses the following non-GAAP
financial measures: certain non-cash expenses such as restricted
shares issued for consulting services and non-cash stock
compensation expense, basic and diluted earnings (losses) per
common share excludes non-cash expenses such as restricted shares
issued for consulting services and non-cash stock compensation
expense.
The presentation of these non-GAAP financial measures is not
intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with
GAAP. Recon believes these non-GAAP financial measures provide
meaningful supplemental information about its performance by
excluding non-cash items, which may not be indicative of its
operating performance.
About Recon Technology, Ltd. (NASDAQ: RCON)
Recon Technology, Ltd. is China's first listed non-state owned oil and
gas field service company on NASDAQ. Recon supplies China's largest oil exploration companies,
Sinopec (NYSE: SNP) 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.
Currency Conversion
The translation of RMB amounts into U.S. dollars are included
solely for the convenience of readers and have been made at the
rate of RMB 6.65 to US$ 1.00, the
noon buying rate as of September 30,
2017 as set forth in the H.10 statistical release of the
Federal Reserve Board. Prior period numbers have been recast into
the new reporting currency.
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 BALANCE
SHEETS
|
(UNAUDITED)
|
|
|
As of June
30,
|
|
As of September
30
|
|
As of September
30
|
|
2017
|
|
2017
|
|
2017
|
ASSETS
|
RMB
|
|
RMB
|
|
U.S.
Dollars
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash
|
¥
|
3,809,279
|
|
¥
|
6,111,223
|
|
$
|
918,304
|
Notes
receivable
|
|
6,112,960
|
|
|
3,475,000
|
|
|
522,172
|
Trade accounts
receivable, net
|
|
39,425,911
|
|
|
37,955,890
|
|
|
5,703,450
|
Inventories,
net
|
|
2,627,974
|
|
|
4,725,395
|
|
|
710,063
|
Other receivables,
net
|
|
4,106,510
|
|
|
5,167,281
|
|
|
776,463
|
Purchase advances,
net
|
|
11,476,000
|
|
|
15,585,728
|
|
|
2,341,993
|
Prepaid
expenses
|
|
828,441
|
|
|
591,239
|
|
|
88,842
|
Total current
assets
|
|
68,387,075
|
|
|
73,611,756
|
|
|
11,061,287
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
2,767,970
|
|
|
2,538,623
|
|
|
381,467
|
Acquired intangible
assets - land use right, net
|
|
-
|
|
|
1,322,300
|
|
|
198,696
|
Total
Assets
|
¥
|
71,155,045
|
|
¥
|
77,472,679
|
|
$
|
11,641,450
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Short-term bank
loan
|
¥
|
-
|
|
¥
|
45,000
|
|
$
|
6,762
|
Trade accounts
payable
|
|
8,352,870
|
|
|
10,932,894
|
|
|
1,642,834
|
Other
payables
|
|
3,351,900
|
|
|
3,810,056
|
|
|
572,519
|
Other payable-
related parties
|
|
3,314,019
|
|
|
3,500,978
|
|
|
526,075
|
Deferred
revenue
|
|
1,259,725
|
|
|
1,279,744
|
|
|
192,301
|
Accrued payroll and
employees' welfare
|
|
2,014,514
|
|
|
2,286,703
|
|
|
343,612
|
Taxes
payable
|
|
684,721
|
|
|
904,082
|
|
|
135,852
|
Short-term
borrowings
|
|
300,000
|
|
|
4,900,000
|
|
|
736,299
|
Short-term borrowings
- related parties
|
|
10,168,008
|
|
|
9,338,318
|
|
|
1,403,224
|
Total Current
Liabilities
|
|
29,445,757
|
|
|
36,997,775
|
|
|
5,559,478
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Common stock, ($
0.0185 U.S. dollar par value,
100,000,000 shares authorized; 9,902,914 shares issued
and outstanding as of September 30, 2017 and June 30,
2017)
|
|
1,261,288
|
|
|
1,261,288
|
|
|
189,528
|
Additional paid-in
capital
|
|
123,436,043
|
|
|
127,449,079
|
|
|
19,151,165
|
Statutory
reserve
|
|
4,148,929
|
|
|
4,148,929
|
|
|
623,440
|
Accumulated
deficit
|
|
(95,352,659)
|
|
|
(102,097,510)
|
|
|
(15,341,705)
|
Accumulated other
comprehensive loss
|
|
(249,156)
|
|
|
(193,616)
|
|
|
(29,094)
|
Total
stockholders' equity
|
|
33,244,445
|
|
|
30,568,170
|
|
|
4,593,334
|
Non-controlling
interests
|
|
8,464,843
|
|
|
9,906,734
|
|
|
1,488,638
|
Total
equity
|
|
41,709,288
|
|
|
40,474,904
|
|
|
6,081,972
|
Total Liabilities
and Equity
|
¥
|
71,155,045
|
|
¥
|
77,472,679
|
|
$
|
11,641,450
|
RECON TECHNOLOGY,
LTD
|
CONDENSED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
(UNAUDITED)
|
|
|
For the three
months ended
|
|
September
30,
|
|
2016
|
|
2017
|
|
2017
|
|
RMB
|
|
RMB
|
|
USD
|
|
|
|
|
|
|
Revenues
|
|
|
|
|
|
|
|
|
Hardware and
software
|
|
7,802,103
|
|
¥
|
12,170,614
|
|
$
|
1,828,820
|
Total
revenues
|
|
7,802,103
|
|
|
12,170,614
|
|
|
1,828,820
|
|
|
|
|
|
|
|
|
|
Cost of
revenues
|
|
|
|
|
|
|
|
|
Hardware and
software
|
|
6,709,778
|
|
|
10,077,045
|
|
|
1,514,230
|
Total cost of
revenues
|
|
6,709,778
|
|
|
10,077,045
|
|
|
1,514,230
|
Gross
profit
|
|
1,092,325
|
|
|
2,093,569
|
|
|
314,590
|
|
|
|
|
|
|
|
|
|
Selling and
distribution expenses
|
|
1,050,141
|
|
|
1,086,200
|
|
|
163,218
|
General and
administrative expenses
|
|
4,899,328
|
|
|
7,022,780
|
|
|
1,055,280
|
Provision for
doubtful accounts
|
|
8,026
|
|
|
297,571
|
|
|
44,715
|
Research and
development expenses
|
|
618,674
|
|
|
554,782
|
|
|
83,364
|
Operating
expenses
|
|
6,576,169
|
|
|
8,961,333
|
|
|
1,346,577
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(5,483,844)
|
|
|
(6,867,764)
|
|
|
(1,031,987)
|
|
|
|
|
|
|
|
|
|
Other income
(expenses)
|
|
|
|
|
|
|
|
|
Subsidy
income
|
|
7,807
|
|
|
212,005
|
|
|
31,857
|
Interest
income
|
|
27,894
|
|
|
2,004
|
|
|
301
|
Interest
expense
|
|
(132,490)
|
|
|
(129,208)
|
|
|
(19,415)
|
Income (loss) from
foreign currency exchange
|
|
388
|
|
|
(1,158)
|
|
|
(174)
|
Other income
(expense)
|
|
99,518
|
|
|
(9,557)
|
|
|
(1,436)
|
Other income,
net
|
|
3,117
|
|
|
74,086
|
|
|
11,133
|
Loss before income
tax
|
|
(5,480,727)
|
|
|
(6,793,678)
|
|
|
(1,020,854)
|
Income tax expenses
(benefits)
|
|
(20,143)
|
|
|
9,282
|
|
|
1,395
|
Net
loss
|
|
(5,460,584)
|
|
|
(6,802,960)
|
|
|
(1,022,249)
|
|
|
|
|
|
|
|
|
|
Less: Net loss
attributable to non-controlling interests
|
|
-
|
|
|
(58,109)
|
|
|
(8,732)
|
Net loss
attributable to Recon Technology, Ltd
|
|
(5,460,584)
|
|
¥
|
(6,744,851)
|
|
$
|
(1,013,517)
|
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
|
|
|
|
|
|
|
|
Net loss
|
|
(5,460,584)
|
|
|
(6,802,960)
|
|
|
(1,022,249)
|
Foreign currency
translation adjustment
|
|
(7,602)
|
|
|
55,540
|
|
|
8,346
|
Comprehensive
loss
|
|
(5,468,186)
|
|
|
(6,747,420)
|
|
|
(1,013,903)
|
Less: Comprehensive
loss attributable to non-controlling interests
|
|
-
|
|
|
(58,109)
|
|
|
(8,732)
|
Comprehensive loss
attributable to Recon Technology, Ltd
|
|
(5,468,186)
|
|
¥
|
(6,689,311)
|
|
$
|
(1,005,171)
|
|
|
|
|
|
|
|
|
|
Loss per common
share - basic and diluted
|
|
(0.92)
|
|
¥
|
(0.97)
|
|
$
|
(0.15)
|
Weighted - average
shares - basic and diluted
|
|
5,957,733
|
|
|
6,919,001
|
|
|
6,919,001
|
RECON TECHNOLOGY,
LTD
|
CONDENSED
STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
For the three
months ended September 30,
|
|
2016
|
|
2017
|
|
2017
|
|
RMB
|
|
RMB
|
|
U.S.
Dollars
|
|
|
|
|
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net
loss
|
¥
|
(5,460,584)
|
|
¥
|
(6,802,960)
|
|
$
|
(1,022,249)
|
Adjustments to
reconcile net loss to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
205,580
|
|
|
233,535
|
|
|
35,092
|
Gain from disposal
of equipment
|
|
(35,919)
|
|
|
-
|
|
|
-
|
Provision for
doubtful accounts
|
|
8,026
|
|
|
297,571
|
|
|
44,715
|
Provision for slow
moving inventories
|
|
262,135
|
|
|
164,305
|
|
|
24,689
|
Share based
compensation
|
|
1,966,670
|
|
|
1,569,172
|
|
|
235,792
|
Restricted shares
issued for management
|
|
-
|
|
|
1,398,492
|
|
|
210,145
|
Restricted shares
issued for services
|
|
-
|
|
|
1,045,372
|
|
|
157,083
|
Changes in
operating assets and liabilities:
|
|
|
|
|
|
|
|
|
Notes
receivable
|
|
1,554,407
|
|
|
2,637,960
|
|
|
396,394
|
Trade accounts
receivable, net
|
|
1,035,863
|
|
|
905,556
|
|
|
136,074
|
Inventories,
net
|
|
(288,299)
|
|
|
(2,261,726)
|
|
|
(339,859)
|
Other receivable,
net
|
|
1,866,616
|
|
|
(962,778)
|
|
|
(144,672)
|
Purchase advance,
net
|
|
(2,873,141)
|
|
|
(3,940,827)
|
|
|
(592,169)
|
Prepaid
expense
|
|
55,050
|
|
|
237,202
|
|
|
35,643
|
Trade accounts
payable
|
|
1,727,232
|
|
|
2,580,024
|
|
|
387,688
|
Other
payables
|
|
(241,788)
|
|
|
458,156
|
|
|
68,845
|
Other
payables-related parties
|
|
32,454
|
|
|
186,959
|
|
|
28,093
|
Deferred
revenue
|
|
(175,494)
|
|
|
20,019
|
|
|
3,008
|
Accrued payroll and
employees' welfare
|
|
118,046
|
|
|
272,189
|
|
|
40,901
|
Taxes
payable
|
|
(80,273)
|
|
|
219,361
|
|
|
32,962
|
Net cash used in
operating activities
|
|
(323,419)
|
|
|
(1,742,418)
|
|
|
(261,825)
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Purchases of property
and equipment
|
|
(29,621)
|
|
|
(4,188)
|
|
|
(629)
|
Proceeds from
disposal of equipment
|
|
51,900
|
|
|
-
|
|
|
-
|
Purchase of land use
right
|
|
-
|
|
|
(1,322,300)
|
|
|
(198,696)
|
Net cash provided
by (used in) investing activities
|
|
22,279
|
|
|
(1,326,488)
|
|
|
(199,325)
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Proceeds from
short-term bank loans
|
|
-
|
|
|
45,000
|
|
|
6,762
|
Proceeds from
short-term borrowings
|
|
-
|
|
|
4,600,000
|
|
|
691,220
|
Repayment of
short-term borrowings
|
|
(530,000)
|
|
|
-
|
|
|
-
|
Proceeds from
short-term borrowings-related parties
|
|
4,838,318
|
|
|
10,988,318
|
|
|
1,651,162
|
Repayment of
short-term borrowings-related parties
|
|
(5,276,448)
|
|
|
(11,818,008)
|
|
|
(1,775,836)
|
Capital contribution
by a noncontrolling shareholder
|
|
-
|
|
|
1,500,000
|
|
|
225,398
|
Net cash (used in)
provided by financing activities
|
|
(968,130)
|
|
|
5,315,310
|
|
|
798,706
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate fluctuation on cash
|
|
6,280
|
|
|
55,540
|
|
|
8,346
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash
|
|
(1,262,990)
|
|
|
2,301,944
|
|
|
345,902
|
Cash at beginning
of period
|
|
1,817,620
|
|
|
3,809,279
|
|
|
572,402
|
Cash at end of
period
|
¥
|
554,630
|
|
¥
|
6,111,223
|
|
$
|
918,304
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information
|
|
|
|
|
|
|
|
|
Cash paid during
the period for interest
|
¥
|
167,403
|
|
¥
|
153,498
|
|
$
|
23,065
|
Cash paid during
the period for taxes
|
¥
|
-
|
|
¥
|
9,282
|
|
$
|
1,395
|
Reconciliation of
Non-GAAP Financial Measures
|
|
|
For the three
months ended
|
|
September
30,
|
|
2016
|
|
2017
|
|
2017
|
|
RMB
|
|
RMB
|
|
USD
|
Reconciliation of
Net loss attributable to common shareholders
|
|
|
|
|
|
|
|
|
to Adjusted Net
loss attributable to common shareholders
|
|
|
|
|
|
|
|
|
Net loss attributable
to common shareholders
|
¥
|
(5,460,584)
|
|
¥
|
(6,744,851)
|
|
$
|
(1,013,517)
|
Special
items:
|
|
|
|
|
|
|
|
|
Restricted shares
issued for services
|
|
-
|
|
|
1,045,372
|
|
|
157,083
|
Provision for
doubtful accounts
|
|
8,026
|
|
|
297,571
|
|
|
44,715
|
Provision for slow
moving inventories
|
|
262,135
|
|
|
164,305
|
|
|
24,689
|
Stock compensation
expense
|
|
1,966,670
|
|
|
1,569,172
|
|
|
235,792
|
Restricted shares
issued for management
|
|
-
|
|
|
1,398,492
|
|
|
210,145
|
Adjusted net loss
attributable to common stockholders
|
¥
|
(3,223,753)
|
|
¥
|
(2,269,939)
|
|
$
|
(341,093)
|
|
|
|
|
|
|
|
|
|
Reconciliation of
U.S. GAAP Loss Per Share
|
|
|
|
|
|
|
|
|
to Non U.S. GAAP
Adjusted Loss Per Share
|
|
|
|
|
|
|
|
|
U.S. GAAP loss per
share
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
¥
|
(0.92)
|
|
¥
|
(0.97)
|
|
$
|
(0.15)
|
Impact of special
items on earnings per share
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
|
0.38
|
|
|
0.64
|
|
|
0.10
|
Non U.S. GAAP
adjusted loss per share
|
|
|
|
|
|
|
|
|
Basic and
diluted
|
¥
|
(0.54)
|
|
¥
|
(0.33)
|
|
$
|
(0.05)
|
Weighted - average
shares - basic and diluted
|
|
5,957,733
|
|
|
6,919,001
|
|
|
6,919,001
|
View original
content:http://www.prnewswire.com/news-releases/recon-technology-reports-fiscal-2018-first-quarter-and-first-three-months-financial-results-300556375.html
SOURCE Recon Technology, Ltd.