Recon Reports Q1 Fiscal Year 2013 Financial Results

Q1 FY '2013 Revenue Up 83%, Net Loss Decreases by 31%

15 Nov, 2012, 07:03 ET from Recon Technology, Ltd.

BEIJING, Nov. 15, 2012 /PRNewswire-FirstCall/ -- Recon Technology, Ltd (Nasdaq: RCON), an oilfield services provider that operates primarily in the People's Republic of China (the "Company"), today announced its financial results for first quarter fiscal year 2013 ended September 30, 2012.

Q1 FY '13 Highlights

  • Total revenues for Q1 FY '13 increased by 83.19% to RMB 9.05 million ($1.49 million), due mainly to increased demands of furnaces.
  • Gross profits for Q1 FY '13 were RMB2.45 million ($386 thousand),compared to RMB 2.48 million of Q1 FY '12.
  • Comprehensive loss attributable to ordinary shareholders for Q1 FY '13 was RMB2.34 million ($370 thousand), a 31.16% decrease from Q1 FY '12. Diluted losses per share attributable to ordinary shareholders for Q1 FY '13 was RMB0.59 ($0.09), an improvement of 31.39% from diluted losses per share of RMB0.86 in Q1 FY '12.
  • Adjust EBITDA in Q1 FY '13 was a loss of RMB1.45 million ($229 thousand), an improvement of 48.26% from Q1 FY '12.

The company's quarterly report on Form 10-Q is available for public viewing at http://www.sec.gov.

"Our first quarter is usually a slow quarter for our business, but this year revenues have grown early," said Mr. Yin. Shenping, Recon's Chief Executive Officer, "Benefited from our good reputation and long-term cooperation with our clients, we achieved more orders from our clients when they launched a new round replacement of furnaces and related accessories. We will continue our R&D activities to maintain stronger competitiveness and higher margin to secure our business. Besides, our other businesses like automation business and fracturing services, are all progressing smoothly. We will continue to make full use of our advantages and professional experience on oilfield automation and production stimulation-related services to achieve better and faster development".

About Recon Technology, Ltd.

Recon Technology, Ltd. is a non-state-owned oil field service company in China. The company has been providing software, equipment and services designed to increase the efficiency and automation in oil and gas exploration, extraction, production and refinery for Chinese oil and gas fields for more than 10 years. More information may be found at http://www.recon.cn or via e-mail at info@recon.cn.

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.

Investor Contact: Recon Technology, Ltd. Tel: +86-10-8494-5799

RECON TECHNOLOGY, LTD

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

As of June 30,

As of September 30,

As of September 30,

2012

2012

2012

ASSETS

RMB

RMB

U.S. Dollars

Current assets

Cash and cash equivalents

RMB

3,533,283

RMB

2,254,327

$

355,909

Trade accounts receivable, net

61,993,942

57,469,336

9,073,151

Trade accounts receivable- related parties, net

20,394,749

19,856,249

3,134,867

Inventories, net

24,281,300

24,097,816

3,804,518

Other receivables, net

8,074,096

10,816,095

1,707,625

Other receivables- related parties

17,729

445,494

70,334

Purchase advances, net

16,250,616

16,855,838

2,661,168

Purchase advances- related parties

1,093,534

993,534

156,857

Tax recoverable

2,790,722

1,572,640

248,286

Prepaid expenses

535,336

923,407

145,786

Deferred tax asset

1,106,801

1,075,177

169,747

Total current assets

140,072,108

136,359,913

21,528,248

Property and equipment, net

1,774,820

2,083,848

328,994

Long-term other receivable

10,302,349

8,627,720

1,362,128

Total Assets

RMB

152,149,277

RMB

147,071,481

$

23,219,370

LIABILITIES AND EQUITY

Current liabilities

Short-term bank loan

RMB

23,000,000

RMB

23,000,000

$

3,631,197

Trade accounts payable

11,905,560

9,093,488

1,435,663

Trade accounts payable- related parties

5,339,231

7,026,028

1,109,256

Other payables

2,341,826

1,659,640

262,021

Other payable- related parties

1,099,259

923,186

145,751

Deferred revenue

3,291,073

3,391,628

535,464

Advances from customers

936,124

1,286,993

203,188

Advances from customers- related parties

-

600,000

94,727

Accrued payroll and employees' welfare

949,579

1,017,375

160,621

Accrued expenses

476,416

539,742

85,213

Taxes payable

9,681,620

8,421,610

1,329,588

Short-term borrowings

2,767,066

1,817,883

287,004

Short-term borrowings- related parties

4,123,306

920,872

145,386

Total current liabilities

65,911,060

59,698,445

9,425,079

Long-term borrowings-related party

-

3,007,675

474,846

Total Liabilities

65,911,060

62,706,120

9,899,925

Commitments and Contingency

Equity

Common shares, ($ 0.0185 U.S. dollar par value, 25,000,000 shares authorized; 3,951,811 shares issued and outstanding as of June 30, 2012 and September 30, 2012)

529,979

529,979

83,672

Additional paid-in capital

67,643,791

68,126,955

10,755,755

Appropriated retained earnings

2,378,961

2,378,961

375,586

Unappropriated retained earnings

9,354,535

7,016,251

1,107,713

Accumulated other comprehensive loss

(290,496)

(306,458)

(48,383)

Total controlling shareholders' equity

79,616,770

77,745,688

12,274,343

Non-controlling interest

6,621,447

6,619,673

1,045,102

Total equity

86,238,217

84,365,361

13,319,445

Total Liabilities and Equity

RMB

152,149,277

RMB

147,071,481

$

23,219,370

 

RECON TECHNOLOGY, LTD

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

For the three months ended September 30,

 2011

 2012

2012

 RMB

 RMB

U.S. Dollars

Revenues

Hardware

RMB

3,593,772

RMB

8,438,964

$

1,332,329

Service

-

83,177

13,132

Hardware - related parties

1,348,817

532,051

83,999

Total revenues

4,942,589

9,054,192

1,429,460

Cost of revenues

2,465,443

6,608,767

1,043,380

Gross profit

2,477,146

2,445,425

386,080

Selling and distribution expenses

832,797

1,268,798

200,316

General and administrative expenses

4,876,183

3,516,440

555,169

Operating expenses

5,708,980

4,785,238

755,485

Loss from operations

(3,231,834)

(2,339,813)

(369,405)

Other income (expenses)

Interest income

6,332

1,310

207

Interest expense

(142,911)

(329,756)

(52,061)

Gain from foerign currency exchange

-

266,460

42,068

Other income (expense)

71,732

95,139

15,020

Loss before income taxes

(3,296,681)

(2,306,660)

(364,171)

Provision for income taxes

(108,515)

(31,624)

(4,993)

Net loss

(3,405,196)

(2,338,284)

(369,164)

Less: Net income attributable to non-controlling interest

-

5,882

930

Net loss attributable to Recon Technology, Ltd

RMB

(3,405,196)

RMB

(2,344,166)

$

(370,094)

Comprehensive Loss

Net loss

(3,405,196)

(2,338,284)

(369,164)

Foreign currency translation adjustment

7,594

(15,962)

(2,520)

Comprehensive loss

(3,397,602)

(2,354,246)

(371,684)

Comprehensive income attributable to non-controlling interest

759

7,656

1,209

Comprehensive loss attributable to Recon Technology, Ltd

RMB

(3,398,361)

RMB

(2,361,902)

$

(372,893)

Loss per common share - basic and diluted

RMB

(0.86)

RMB

(0.59)

$

(0.09)

Weighted - average shares -basic and diluted

3,951,811

3,951,811

3,951,811

 

RECON TECHNOLOGY, LTD

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

For the three months ended September 30,

2011

2012

2012

RMB

RMB

U.S. Dollars

Cash flows from operating activities:

Net loss

RMB

(3,405,196)

RMB

(2,338,284)

$

(369,164)

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation

88,723

72,379

11,427

Recovery of doubtful accounts

-

(413,622)

(65,302)

Stock based payments

263,364

454,805

71,804

Deferred tax provision

-

31,624

4,993

Changes in operating assets and liabilities:

Trade accounts receivable

2,499,209

5,011,902

791,270

Trade accounts receivable-related parties

-

538,500

85,017

Notes receivbale

1,276,574

-

-

Other receivable, net

(1,756,733)

(1,139,779)

(179,946)

Other receivables related parties, net

-

(427,764)

(67,535)

Purchase advance, net

(539,485)

(606,488)

(95,751)

Purchase advance-related party, net

-

100,000

15,788

Tax recorvable

-

1,218,082

192,308

Prepaid expense

81,866

(388,071)

(61,268)

Inventories

(1,247,809)

183,484

28,968

Trade accounts payable

1,457,908

(2,812,072)

(443,965)

Trade accounts payable-related parties

-

1,686,797

266,308

Other payables

102,887

(682,186)

(107,702)

Other payables-related parties

-

(176,073)

(27,798)

Deferred income

(504,800)

100,555

15,875

Advances from customers

(77,395)

950,869

150,121

Accrued payroll and employees' welfare

9,389

67,796

10,704

Accrued expenses

105,933

63,324

9,997

Taxes payable

283,529

(1,260,010)

(198,928)

Net cash provided by (used in) operating activities

(1,362,036)

235,768

37,221

Cash flows from investing activities:

Purchase of property and equipment

(101,131)

(381,406)

(60,216)

Net cash used in investing activities

(101,131)

(381,406)

(60,216)

Cash flows from financing activities:

Proceeds from borrowings-related parties

-

7,675

1,212

Repayment of  short-term borrowings

-

(949,183)

(149,855)

Repayment of short-term borrowings-related parties

-

(202,434)

(31,960)

Net cash used in financing activities

-

(1,143,942)

(180,603)

Effect of exchange rate fluctuation on cash and cash equivalents

11,882

10,624

1,677

Net decrease in cash and cash equivalents

(1,451,285)

(1,278,956)

(201,921)

Cash and cash equivalents at beginning of period

3,485,944

3,533,283

557,830

Cash and cash equivalents at end of period

RMB

2,034,659

RMB

2,254,327

$

355,909

Supplemental cash flow information

Cash paid during the period for interest

RMB

134,637

RMB

407,215

$

64,290

Cash paid during the period for taxes

RMB

-

RMB

-

$

-

SOURCE Recon Technology, Ltd.



RELATED LINKS

http://www.recon.cn