Recon Technology, Ltd. Reports Fiscal Year 2016 Second Quarter Financial Results

16 Feb, 2016, 06:30 ET from Recon Technology, Ltd.

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

 

SOURCE Recon Technology, Ltd.



RELATED LINKS

http://www.recon.cn