Hollysys Automation Technologies Reports Unaudited Financial Results for the Fiscal Year 2012 Second Quarter Ended December 31, 2011

BEIJING, Feb. 20, 2012 /PRNewswire-Asia-FirstCall/ --

Q2 Financial Highlights

  • Quarterly revenues of $80.3 million, representing an increase of 8.0% compared to $74.4 million  year-over-year.
  • Gross margin at 38.5%, as compared to 36.0% year-over-year, and 37.8% quarter-over-quarter
  • Non-GAAP net income attributable to Hollysys of $20.4 million, as compared to $15.0 million and a 36.4% increase year-over-year.
  • Non-GAAP Diluted EPS at $0.37 reported for the quarter, as compared to $0.27 year-over-year
  • Record-high backlog of $332.1 million as of December 31, 2011, a 15.1% increase compared to $288.5 million year-over-year, and 10.7% increase compared to $300.1 million quarter-over-quarter.
  • Inventory turn-over days of 54 days for this quarter compared to 60 days year-over-year.
  • Generate record-breaking net cash provided by operating activities of $57.8 million for this quarter.

Hollysys Automation Technologies, Ltd.  (NASDAQ: HOLI) ("Hollysys" or the "Company"), a leading provider of automation and control technologies and applications in China, today announced its unaudited financial results for the fiscal year 2012 second quarter ended December 31, 2011 (see attached tables).

Dr. Changli Wang, Chairman and CEO of Hollysys, stated: "We are very pleased to report another quarter with solid financial and operational performance amid the unfavorable external economic conditions and feel excited about our achievements and breakthroughs in several sectors. Here I would like to take this opportunity to discuss some key events that took place in this quarter:

"Industrial automation business continues its strong growth momentum thanks to our strategy change of total solution proposition and sales force and sales network expansion. We are pleased that we won 6x660MW ultra-supercritical thermal power generating units in aggregate in 2011 in high-end thermal power automation and control market which has been pretty much dominated by multi-national corporations. We will continue to leverage on our proprietary technology and total solution approach to further penetrate into high-end segments of industrial automation and consolidate low-end to mid-end market through expanded sales and service network across the country.

"In our high-speed rail segment, we delivered satisfying financial results despite a mixed high-speed rail environment in China for this quarter, which demonstrates the strength and breadth of our high-speed rail business.We signed a contract of approximately $4.2 million to supply our 200-250km/h high-speed rail ATP equipment to Ministry of Railways of China ("MOR") while the new contract tender of China's high-speed rail was considered to be quiet at the time. Given the intense demand for high-speed rail build-out with China's large population transportation demand and limited land use resources together with approximately 15,000 km of high-speed rail tracks currently in construction in China which will require signaling system to be installed prior to commercial operation, we believe there is a huge market potential in high-speed rail signaling market for leading players like Hollysys to realize and capture. Besides, we have obtained European Safety Standard Certification Level 4 (SIL 4) for our proprietary signaling products, including Automatic Train Protection (ATP), Balise Transmission Module (BTM), Line-side Electronic Unit (LEU), Temporary Train Control System (TSRS), Vital Computer platform (HVC), Train Control Center (TCC) and interlocking system. With the whole product suite of our proprietary high-speed rail signaling systems development completed and received European Safety Standard certification, Hollysys is poised to explore the vast international railway market and achieve fruitful results to further create value for our shareholders.

"In our subway business segment, we're excited from winning the competitive bid to supply our Main Control System (MCS) to Hong Kong MTR Corporation for the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL) valued at approximately HK $65.6 million (approximately  USD $8.4 million). This is the first international bid of our proprietary SCADA system with the MTR Corporation against other multinational companies, which is a strong validation of our proprietary technology and implementation capabilities and a remarkable milestone of distributing our footprint in the international subway arena. As we have achieved the breakthrough of international market and have laid a solid technology foundation and accumulated in-depth implementation knowledge and experiences, we are expecting more international contracts in pipeline. In addition to the Hong Kong MTR contract, we are also excited from the contract win with Beijing Metro Construction and Administration Corporation to supply the integrated surveillance control and data acquisition system (SCADA) to Beijing Subway Line 14 at $18.8 million. We attribute this important record to our numerous successful applications, advanced technology and strong implementation capability, which has been able to stay ahead of our competition while developing along with the industry.

"We are also very pleased to see the smooth integration with our wholly owned subsidiary Concord Corporation Pte. Ltd ("Concord"). In this quarter, Concord successfully signed a contract with Sendan International Co., Ltd to provide electrical, instrumentation and control installation works for Rabigh Power Plant II in Rabigh, Saudi Arabia at approximately $16.90 million. This is the first sizable contract win by Concord after the acquisition and we are glad to see that Concord is continuously winning new businesses, while its integration into Hollysys has been well underway in both new products development and business development. We believe the combination of Concord's customer base and industry know-how with Hollysys' proprietary technology and products will pave our way to a broader market space of rail and industrial automation sectors in Southeast Asia and the Middle East.

"Another major event took place in this quarter is that we announced CFO Departure and appointment of CFO's Replacement. We sincerely appreciate our former CFO, Mr. Peter Li for his contributions as Hollysys CFO and extend our best wishes to his new endeavors. Meanwhile, we are very pleased to see Ms. Herriet Qu, Financial Controller, is internally promoted to Chief Financial Officer of Hollysys overseeing the overall corporate financial management, who has been with the Company for more than four years with MBA degree from Oklahoma City University. After this smooth transition of CFO, together with the appointment of corporate senior executives COO, Mr. Jianfeng He, and Senior VP Business Development, Mr.Baiqing Shao, our senior management team will remain our strategic vision and continuously devote ourselves into Hollysys' future development and growth, to better serve our clients and shareholders' best interests."

The Second Quarter ended December 2011 Unaudited Financial Results Summary

To facilitate a clear understanding of Hollysys operational result, a summary of unaudited non-GAAP financial results is shown as below:

In USD thousands, except share numbers and EPS

 

 

 

 

 

 

 

Three months ended

 

Six months ended

 

 

December 31, 2011

December 31, 2010

%
Change

 

December 31, 2011

December 31, 2010

%
Change

 

 

 

 

 

 

 

 

 

Revenues

$

80,288

74,371

8.0%

 

167,452

135,214

23.8%

    Integrated Contract Revenue

$

75,902

71,198

6.6%

 

159,384

128,572

24.0%

    Products Sales

$

4,386

3,173

38.2%

 

8,069

6,642

21.5%

Cost of Revenues

$

49,412

47,595

3.8%

 

103,629

87,257

18.8%

Gross Profit

$

30,877

26,776

15.3%

 

63,824

47,956

33.1%

Total Operating Expenses

$

8,871

11,358

(21.9)%

 

26,385

21,043

25.4%

    Selling

$

8,060

5,384

49.7%

 

15,042

8,954

68.0%

    General and Administrative

$

7,385

4,713

56.7%

 

12,243

8,485

44.3%

    Research and Development

$

6,881

6,448

6.7%

 

12,950

10,774

20.2%

    VAT refunds and government subsidy

$

(13,456)

(5,187)

159.4%

 

(13,851)

(7,171)

93.2%

Income from operations

$

22,007

15,418

42.7%

 

37,439

26,913

39.1%

Other income (expense), net

$

74

(595)

(112.5)%

 

262

875

(70.0)%

Gains (Losses) on disposal of long term investment

$

(3)

66

(104.6)%

 

(3)

1,428

(100.2)%

Share of net income of equity investees

$

207

2,238

(90.8)%

 

152

526

(71.1)%

Interest expense, net

$

(441)

(445)

(0.9)%

 

(1,162)

(720)

61.3%

Income tax Expenses

$

1,334

1,700

(21.5)%

 

3,201

3,643

(12.1)%

Non-GAAP net income (loss) attributable to non-controlling interest

$

82

4

2143.0%

 

223

12

1814.0%

Non-GAAP net income attributable to Hollysys Automation Technologies Ltd.

$

20,428

14,978

36.4%

 

33,265

25,367

31.1%

Basic Non-GAAP EPS

$

0.37

0.28

33.3%

 

0.60

0.47

29.0%

Diluted  Non-GAAP EPS

$

0.37

0.27

34.1%

 

0.60

0.46

29.5%

 

 

 

 

 

 

 

 

 

Stock-based Compensation Cost

$

157

131

20.1%

 

315

262

20.1%

Net income attributable to Hollysys Automation Technologies Ltd.(GAAP)

$

20,271

14,847

36.5%

 

32,950

25,105

31.3%

Basic GAAP EPS

$

0.36

0.27

33.5%

 

0.60

0.46

29.1%

Diluted GAAP EPS

$

0.36

0.27

34.3%

 

0.59

0.46

29.6%

 

 

 

 

 

 

 

 

 

Basic Weighted Average Common Shares Outstanding

 

55,703,338

54,449,129

2.3%

 

55,356,413

54,449,564

1.7%

Diluted Weighted Average Common Shares Outstanding

 

55,852,982

54,936,098

1.7%

 

55,592,152

54,895,992

1.3%


Operational Results Analysis for the Second quarter ended December 31, 2011

For the three months ended December 31, 2011, total revenues increased by 8.0% to $80.3 million, from $74.4 million in the prior fiscal year period. Among total revenues, revenue from integrated contracts increased by 6.6% to $75.9 million, as compared to $71.2 million for the same period of the prior year. The Company's integrated contract revenue by segment was shown as following:

(In USD million)

 

 

 

 

 

 

 

Three months ended December 31,

 

Six months ended December 31,

 

 

2011

 

2010

 

2011

 

2010

 

 

$

% to Total Revenue

 

$

% to Total Revenue

 

$

% to Total Revenue

 

$

% to Total Revenue

Industrial Automation

 

44.5

58.6%

 

35.5

50.3%

 

97.5

61.2%

 

67.7

52.9%

Rail Transportation

 

24.3

32.0%

 

35.1

49.7%

 

49.7

31.2%

 

60.4

47.1%

Overseas

 

7.1

9.4%

 

-

-

 

12.2

7.6%

 

-

-

Total

 

75.9

100.0%

 

70.6

100.0%

 

159.4

100.0%

 

128.1

100.0%

The industrial automation revenue of $44.5 million for the three months ended December 31, 2011 is consisted of industrial automation revenue of $41.5 million and nuclear revenue of $3.0 million in previous break-down categories. And the rail transportation revenue of $24.3 million for the three months ended December 31, 2011 is consisted of high-speed rail revenue of $17.5 million and subway automation revenue of $6.8 million.

As a percentage of total revenues, overall gross margin was 38.5% for the three months ended December 31, 2011, as compared to 36.0% for the same period of last year. The gross margin for integrated contracts and product sales were 36.4% and 73.4% for the three months ended December 31, 2011, as compared to 35.7% and 42.1% for the same period of last year respectively. The gross margin increase was mainly due to a few higher margin projects and portion of projects of high-speed rail being recognized in the quarter.

For the three months ended December 31, 2011, selling expenses were $8.1 million, compared to $7.0 million quarter-over-quarter, and $5.4 million year-over-year. The increase was mainly due to the Company's expanded sales network and increased selling staffs. As a percentage of total revenues, selling expenses were 10.0% compared to 8.0% quarter-over-quarter, and 7.2% year-over-year.

General and administrative expenses, excluding non-cash stock-based compensation expense, were $7.4 million for the quarter ended December 31, 2011, representing an increase of $2.7 million, or 56.7%, as compared to $4.7 million for the same period of prior year. The increase was mainly consisted of an increase of $1.9 million contributed by the newly acquired or set-up subsidiaries, and an increase of $0.5 million in allowance for doubtful accounts. As a percentage of total revenues, G&A expenses were 9.2% and 6.3% for the three months ended December 31, 2011 and 2010, respectively. Including the non-cash stock compensation cost recorded on a GAAP basis, G&A expenses were $7.5 million and $4.8 million for three months ended December 31, 2011 and 2010, respectively.

Research and development expenses were $6.8 million for the three months ended December 31, 2011, compared to $6.4 million for the same period of last year. As a percentage of total revenue, R&D expenses were 8.6% and 8.7% for three months ended December 31, 2011 and 2010, respectively.

The VAT refunds and government subsidy amounted to $13.5 million for three months ended December 31, 2011, as compared to $5.2 million for the comparative prior year period, representing an increase of $8.3 million, or 159.4%. According to the accounting policy, the Company only recognizes the VAT refunds upon the completion of the government approval process. In this quarter, the PRC government approved and granted total VAT refunds of $11.8 million to the Company, of which $5.3 million was related to sales during January to June 2011, and the remaining $6.5 million was related to sales during July to December 2011.

Income tax expenses were $1.3 million for the three months ended December 31, 2011, compared to $1.7 million for the prior year period. The effective tax rate was 6.2% and 10.3% for the quarter ended December 31, 2011, and 2010, respectively. The low rate for this quarter is mainly due to the large sum of VAT refunds recognized, which was a non-taxable income.

For the three months ended December 31, 2011, the non-GAAP net income to Hollysys excluding non-cash stock compensation cost was $20.4 million or $0.37 per diluted share based on 55 million shares outstanding. This represents an increase of $5.4 million, or 36.4%, over the $15.0 million, or $0.27 per share based on 54 million shares outstanding, reported in the prior year period. On a GAAP basis, net income attributable to Hollysys was $20.3 million, or $0.36 per diluted share representing an increase of $0.09, or 33.3%, over the $14.9 million, or $0.27 per share reported in the prior year period.

Backlog Highlights

Hollysys' backlog as of December 31, 2011 was $332.1 million, compared to $300.1 million on September 30, 2011, and $288.5 million on December 31, 2010. The detailed breakdown of the backlog by segment is as followings:

(In USD million)

 

 

 

 

 

 

 

 

 

 

 

 

 

Quarter-over-Quarter Analysis

 

Year-over-Year Analysis

 

 

2011-12-31

 

2011-9-30

 

2010-12-31

 

 

$

% to Total Backlog

 

$

% to Total Backlog

 

%
Change

 

$

% to Total Backlog

 

%
Change

Industrial Automation

 

124.4

37.5%

 

128.7

42.9%

 

(3.4%)

 

95.2

33.0%

 

30.6%

Rail Transportation

 

170.4

51.3%

 

157.2

52.4%

 

8.4%

 

193.3

67.0%

 

(11.8%)

Overseas

 

37.3

11.2%

 

14.2

4.7%

 

162.4%

 

-

-

 

-

Total

 

332.1

100.0%

 

300.1

100.0%

 

10.7%

 

288.5

100.0%

 

15.1%

Cash Flow Highlights

The net cash provided by operating activities was $57.8 million for the three months ended December 31, 2011, achieving the historic highest, mainly due to accounts receivable collection of $37.2 million and VAT refunds of $11.8 million received in this quarter. Including investing and financing activities, the total net cash inflow for this quarter was $54.4 million, mainly due to a cash outflow of $6.9 million for repayment of short-term loans and a cash inflow of $4.4 million for advance receipt of disposal of 10% equity interests in Beijing Techenergy.

Balance Sheet Highlights

As of December 31, 2011, Hollysys' cash and cash equivalents were $130.0 million, compared to $75.5 million on September 31, 2011. For the three months ended December 31, 2011, Days Sales Outstanding ("DSO") is 150 days, as compared to 104 days year-over-year and 138 days quarter-over-quarter; and inventory turnover was 54 days, as compared to 60 year-over-year and 51 days quarter-over-quarter.

Outlook for FY 2012

Dr. Wang concluded, "Given our strong backlog currently on-hand and sales pipeline, we are reiterating our annual guideline of revenue in the range between $354 million and $356 million and non-GAAP net income in the range between $57 million and $58 million on consolidated basis."

Conference Call

Management will discuss the current status of the Company's operations during a conference call at 8:30 AM ET/9:30 PM Beijing time on Tuesday, February 21, 2012. Interested parties may participate in the call by dialing the following numbers approximately 10 minutes before the call is scheduled to begin and ask to be connected to the Hollysys Automation Technologies conference call. The conference call identification number is 48678090.

1-866-519-4004 (USA)
800-930-346 (HK)
+852-2475-0994 (HK)
800-819-0121 (China Landline)
400-620-8038 (China Mobile)
+65-6723-9381 (International)

In addition, a recorded replay of the conference call will be accessible within 24 hours via Hollysys' website at:

http://www.hollysys.com.sg/home/index.php/investor-relations/events-a-webcast

About Hollysys Automation Technologies, Ltd.

Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 3,500 employees with nationwide presence in over 40 cities in China, with subsidiaries and offices in Singapore, Malaysia, Dubai, India, and serves over 2000 customers in the industrial, railway, subway & nuclear industries in China, south-east Asia, and the middle east. Its proprietary technologies are applied in its industrial automation solution suite including Distributed Control System (DCS), Programmable Logic Controller (PLC), RMIS, HAMS, OTS, and other products, high-speed railway signaling system of Train Control Center(TCC) and Automatic Train Protection (ATP), and other products, subway supervisory and control platform (SCADA), and nuclear conventional island automation and control systeM.

Safe Harbour

This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.  All statements, other than statements of historical fact included herein are "forward-looking statements," including statements regarding: the ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties.  Such forward-looking statements, based upon the current beliefs and expectations of Hollysys' management, are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements.  Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

For further information, please contact:

Hollysys Automation Technologies, Ltd.
www.hollysys.com
+8610-58981386
+8610-58981326
investors@hollysys.com

 

HOLLYSYS AUTOMATION TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(In US Dollars)

 

 

 

 

 

 

 

 

 

 

 

Three months ended
December 31,

 

Six months ended
December 31,

 

 

2011

 

2010

 

2011

 

2010

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 (Unaudited)

Revenues

 

 

 

 

 

 

 

 

Integrated contract revenue

$

75,901,956

$

71,197,708

$

159,383,839

$

128,571,746

Products sales

 

4,386,448

 

3,173,063

 

8,068,638

 

6,641,867

Total revenues

 

80,288,404

 

74,370,771

 

167,452,477

 

135,213,613

 

 

 

 

 

 

 

 

 

Cost of integrated contracts

 

48,243,403

 

45,758,899

 

101,149,057

 

83,881,846

Cost of products sold

 

1,168,308

 

1,836,224

 

2,479,579

 

3,375,286

Gross profit

 

30,876,693

 

26,775,648

 

63,823,841

 

47,956,481

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Selling

 

8,059,951

 

5,383,553

 

15,041,782

 

8,954,422

General and administrative

 

7,542,441

 

4,844,166

 

12,557,924

 

8,747,305

Research and development

 

6,880,941

 

6,447,952

 

12,950,410

 

10,773,839

VAT refunds and government subsidies

 

(13,456,043)

 

(5,186,791)

 

(13,850,534)

 

(7,170,506)

Total operating expenses

 

9,027,290

 

11,488,880

 

26,699,582

 

21,305,060

 

 

 

 

 

 

 

 

 

Income from operations

 

21,849,403

 

15,286,768

 

37,124,259

 

26,651,421

 

 

 

 

 

 

 

 

 

Other income(expense), net

 

74,470

 

(595,396)

 

262,396

 

874,729

Gains (Losses) on disposal of long term investment

 

(3,027)

 

65,927

 

(3,027)

 

1,427,541

Share of net income of equity investees

 

206,872

 

2,237,943

 

151,697

 

525,786

Interest expense, net

 

(440,760)

 

(444,655)

 

(1,161,899)

 

(720,470)

Income before income taxes

 

21,686,958

 

16,550,587

 

36,373,426

 

28,759,007

 

 

 

 

 

 

 

 

 

Income taxes expenses

 

1,334,468

 

1,699,844

 

3,200,648

 

3,642,848

Net income

 

20,352,490

 

14,850,743

 

33,172,778

 

25,116,159

 

 

 

 

 

 

 

 

 

Less: Net income (loss) attributable to non-controlling interests

 

81,938

 

3,653

 

222,868

 

11,644

Net income attributable to Hollysys Automation Technologies Ltd.

$

20,270,552

$

14,847,090

$

32,949,910

$

25,104,515

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

55,703,338

 

54,449,129

 

55,356,413

 

54,449,564

 

 

 

 

 

 

 

 

 

Weighted average number of diluted common shares

 

55,852,982

 

54,936,098

 

55,592,152

 

54,895,992

 

 

 

 

 

 

 

 

 

Basic earnings per share attributable to Hollysys Automation Technologies Ltd.

 

0.36

 

0.27

 

0.60

 

0.46

 

 

 

 

 

 

 

 

 

Diluted earnings per share attributable to Hollysys Automation Technologies Ltd.

 

0.36

 

0.27

 

0.59

 

0.46

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

Net income

 

20,352,490

 

14,850,743

 

33,172,778

 

25,116,159

Translation adjustments

 

1,714,300

 

2,422,268

 

5,653,872

 

5,432,221

Comprehensive income

 

22,066,790

 

17,273,011

 

38,826,650

 

30,548,380

 

 

 

 

 

 

 

 

 

Less: Comprehensive income attributable to non-controlling interest

 

90,814

 

13,627

 

248,865

 

32,740

Comprehensive income attributable to Hollysys Automation Technologies Ltd.

$

21,975,976

$

17,259,384

$

38,577,785

$

30,515,640


 

HOLLYSYS AUTOMATION TECHNOLOGIES LTD.

CONSOLIDATED BALANCE SHEETS

(In US Dollars)

 

 

 

 

 

 

 

 

 

 

 

  December 31,

 

September 30,

 

 

 

 

2011

 

2011

 

 

 

 

 (Unaudited)

 

(Unaudited)

ASSETS

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

Cash and cash equivalents

$

129,918,106

$

75,481,686

 

 

Contract commitment deposit in banks

 

2,698,087

 

5,181,347

 

 

Accounts receivable, net of allowance for doubtful accounts of $12,947,639 and $11,807,986

 

 

101,591,729

 

 

141,702,792

 

 

Cost and estimated earnings in excess of billings, net of allowance for doubtful accounts of $1,467,630 and $1,245,195

 

 

94,160,656

 

 

91,083,222

 

 

Other receivables, net of allowance for doubtful accounts of $335,697 and $287,941

 

 

9,813,354

 

 

10,142,615

 

 

Advances to suppliers

 

6,715,126

 

8,909,293

 

 

Amounts due from related parties

 

15,755,057

 

12,328,919

 

 

Inventories, net of provision of $2,542,564 and $1,878,520

 

26,606,991

 

28,648,382

 

 

Prepaid expenses

 

1,050,170

 

827,102

 

 

Income tax recoverable

 

572,804

 

-

 

 

Deferred tax assets

 

2,281,798

 

2,230,438

 

 

Assets held for sale

 

-

 

9,109,996

 

Total current assets

 

391,163,878

 

385,645,792

 

 

 

 

 

 

 

 

Property, plant and equipment, net

 

69,628,760

 

60,127,428

 

Long term investments

 

17,548,814

 

18,602,786

 

Goodwill

 

29,875,776

 

30,653,451

 

Deferred tax assets

 

1,196,892

 

1,592,503

 

 

 

 

 

 

 

 

Total assets

 

509,414,120

 

496,621,960

 

 

 

 

 

 

 

LIABILITIES AND STOCKHOLDERS' EQUITY

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Short-term bank loans

 

5,329,291

 

11,763,847

 

 

Current portion of long-term bank loans

 

7,935,374

 

6,687,753

 

 

Accounts payable

 

70,671,271

 

73,521,893

 

 

Construction cost payable

 

926,721

 

1,766,133

 

 

Deferred revenue

 

34,668,157

 

40,759,978

 

 

Accrued payroll and related expense

 

10,149,946

 

8,335,960

 

 

Income tax payable

 

4,537,854

 

4,171,832

 

 

Warranty liabilities

 

3,040,047

 

3,053,148

 

 

Other tax payables

 

11,086,248

 

12,870,295

 

 

Accrued liabilities

 

10,029,391

 

8,201,316

 

 

Amounts due to related parties

 

3,476,228

 

3,291,229

 

 

Advance receipt of disposal of equity interests in an equity investee

 

4,412,068

 

-

 

Total current liabilities

 

166,262,596

 

174,423,384

 

 

 

 

 

 

 

 

 

Long-term bank loans

 

28,716,050

 

30,291,586

 

Total liabilities

 

194,978,646

 

204,714,970

 

 

 

 

 

 

 

 

Commitments and contingencies

 

-

 

-

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

Common stock, par value $0.001 per share, 100,000,000 shares authorized, 55,834,782 and  55,698,917 shares issued and outstanding

 

 

55,835

 

 

55,700

 

 

Additional paid-in capital

 

150,112,992

 

149,651,434

 

 

Appropriated earnings

 

23,090,978

 

23,061,780

 

 

Retained earnings

 

107,662,499

 

87,421,146

 

 

Accumulated comprehensive income - translation adjustments

 

32,453,687

 

30,748,261

 

Total Hollysys Automation Technologies Ltd. stockholder's equity

 

313,375,991

 

290,938,321

 

 

 

 

 

 

 

 

 

Non-controlling interests

 

1,059,483

 

968,669

 

Total equity

 

314,435,474

 

291,906,990

 

 

 

 

 

 

 

 

Total liabilities and equity

$

509,414,120

$

496,621,960

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

HOLLYSYS AUTOMATION TECHNOLOGIES LTD.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In US Dollars)

 

 

 

 

 

 

 

 

 

Three months ended
December 31, 2011

 

Six months ended
December 31, 2011

 

 

 

(Unaudited)

 

(Unaudited)

Cash flows from operating activities:

 

 

 

 

 

Net income

$

20,352,490

$

33,172,778

Adjustments to reconcile net income to net cash

 

 

 

 

provided by (used in) operating activities:

 

 

 

 

 

Depreciation and amortization

 

1,698,141

 

3,080,225

 

Allowance for doubtful accounts

 

1,299,127

 

2,290,014

 

Provision for inventories

 

648,874

 

757,290

 

Losses on disposal of property, plant and equipment

 

39,616

 

39,633

 

Losses on disposal of long-term investments

 

3,027

 

3,027

 

Share of net gains from equity investees

 

(206,872)

 

(151,697)

 

Stock-based compensation

 

157,356

 

314,712

 

Deferred tax assets (liabilities), net

 

370,493

 

(393,451)

Changes in operating assets and liabilities:

 

 

 

 

 

Accounts receivable

 

37,237,477

 

4,155,982

 

Cost and estimated earnings in excess of billings

 

349,123

 

12,769,178

 

Inventories 

 

1,636,494

 

1,872,789

 

Advance to suppliers

 

2,262,263

 

1,774,071

 

Other receivables 

 

775,796

 

1,700,525

 

Deposits and other assets

 

2,304,991

 

1,570,874

 

Due from related parties

 

(1,707,697)

 

(1,637,582)

 

Accounts payable

 

(3,402,657)

 

1,417,403

 

Deferred revenue

 

(6,468,619)

 

(10,363,137)

 

Accruals and other payable

 

2,380,000

 

6,764,655

 

Due to related parties

 

155,862

 

47,219

 

Tax payable

 

(2,114,086)

 

(4,008,158)

 

Net cash provided by operating activities

 

57,771,199

 

55,176,350

 

 

 

 

 

 

Cash flows from investing activities:

 

 

 

 

 

Purchase of property, plant and equipment

 

(1,216,399)

 

(2,089,211)

 

Proceeds from disposal of property, plant and equipment

 

454,333

 

3,221,569

 

Acquisition of a subsidiary, net of cash acquired

 

-

 

(5,410,486)

 

Advance receipt of disposal of equity interests in an equity investee

 

4,360,237

 

4,360,237

 

Net cash provided by investing activities

 

3,598,171

 

82,109

 

 

 

 

 

 

Cash flows from financing activities:

 

 

 

 

 

Proceeds from short-term loans

 

410,298

 

561,392

 

Repayments of short-term loans

 

(6,870,137)

 

(6,996,395)

 

Repayments of long-term loans

 

(639,911)

 

(2,029,215)

 

Proceeds from exercise of share options

 

304,338

 

304,338

 

Dividend paid to ex-shareholders of a subsidiary

 

-

 

(8,224,328)

 

Net cash used in financing activities

 

(6,795,412)

 

(16,384,208)

 

 

 

 

 

 

 

Effect of foreign exchange rate changes

 

(137,538)

 

374,796

 

Net decrease in cash and cash equivalents

$

54,436,420

$

39,249,047

 

 

 

 

 

 

 

Cash and cash equivalents, beginning of period

$

75,481,686

$

90,669,059

 

Cash and cash equivalents, end of period

 

129,918,106

 

129,918,106

 

 

 

 

 

 

 


RECONCILE GAAP NET INCOME TO NON-GAAP NET INCOME

The following table provides more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures.

 

 

 

 

 

 

 

 

 

Three months ended
December 31,

 

Six months ended
December 31,

 

 

 

2011

 

2010

 

2011

 

2010

 

 

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

Net income attributable to Hollysys Automation Technologies Ltd.

$

20,270,552

$

14,847,090

$

32,949,910

 

25,104,515

Adjustments:

 

 

 

 

 

 

 

 

 

Stock-based compensation cost

 

157,356

 

131,019

 

314,712

 

262,038

Non-Gaap Net Income attributable to Hollysys Automation Technologies Ltd.

$

20,427,908

$

14,978,109

$

33,264,622

 

25,366,553

SOURCE Hollysys Automation Technologies, Ltd.



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http://www.hollysys.com.sg/home/index.php/investor-relations/events-a-webcast

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