Click here to close now.

SYS-CON MEDIA Authors: Esmeralda Swartz, Andy Jonak, Carmen Gonzalez, John Wetherill, Lori MacVittie

News Feed Item

Recon Technology Reports Second Quarter 2013 Financial Results

Revenue Increases 49%, Net Profit Up 278%

BEIJING, Feb. 13, 2013 /PRNewswire-FirstCall/ -- Recon Technology, Ltd. (Nasdaq: RCON) ("Recon" or the "Company"), a Chinese non-state-owned oilfield services provider to oil and gas companies and their affiliates, today reported results for its second quarter of fiscal 2013 ended December 31, 2012.

Q2 FY2013 Highlights


For the Three Months Ended




December 31,




2011


2012


% Change

Revenues

 RMB30,844,229


 RMB45,980,600


49.07%

Net income attributable to ordinary shareholders

1,395,926


5,288,361


278.84%

Earnings per share

0.35


1.34


278.84%

  • Total revenues for the second quarter of FY2013 were approximately RMB46.0 million ($7.3 million), an increase of 49.1% from the same period of FY2012.
  • Net income attributable to ordinary shareholders for the second quarter of FY2013 was RMB5.3 million ($0.8 million), or RMB1.34 ($0.21) per diluted share. Net income attributable to ordinary shareholders for the same period of FY2012 was RMB1.4 million, or RMB0.35 ($0.06) per diluted share.

"Recon recorded both strong top-line and bottom-line growth in the second quarter of fiscal 2013. We are very pleased with our progress over the past several quarters and expect the trend to continue in 2013." said Mr. Yin Shenping, Chairman and CEO of Recon. "For the six-month period, our business benefited mainly from our recently developed fracturing service business. It also benefited from our integrated product-service strategies. To further strengthen our competitive advantage, protect our leading market position, and maintain our strong growth momentum, we will continue to expand our portfolio of products and services and focus our growth strategies on high growth, high-margin areas." 

Q2 FY2013 Financial Results

Total revenues for the second quarter of FY2013 increased by 49.1% to RMB46.0 million ($7.3 million) from RMB30.8 million for the same period in FY2012. Service revenues were particularly strong, increasing 476.5% year over year. The overall increase of service revenue consisted mainly of fracturing services and minor maintenance services. During FY2012, Recon BHD signed several fracturing service contracts with an aggregate contract value of RMB30 million with Sinopec Zhongyuan oilfield. As of December 31, 2012, we have completed most of the contracts and recognized corresponding revenues from the contracts. Our management intends to leverage our reputation and experience in the field to pursue new fracturing business contracts in the coming years.

Gross profit increased to RMB14.0 million ($2.2 million) for the second quarter of FY2013, up 53.8% from the same period of FY2012. Gross margin increased to 30.49% for the second quarter of FY2013 from 29.55% for the same period in FY2012. The improvement in overall gross margin was mainly due to service and software sales contributing to a higher portion of total revenues. Service and software sales historically carry higher gross margins than hardware sales.

Selling and distribution expenses increased by 14.1% from RMB1.4 million for the second quarter of FY2012 to RMB1.6 million ($0.3 million) for the second quarter of FY2013. This increase was primarily due to increased shipping charge and maintenance expenses. General and administrative expenses decreased by 32.3% from RMB3.2 million for the second quarter of FY2012 to RMB2.5 million ($0.4 million) for the same period of FY2013. Research and development expenses were RMB4.2 million ($0.7 million) for the second quarter of FY2013, up 72.5% from a year ago. Overall, operating expenses increased by 18.6% year over year to RMB8.3 million ($1.3 million) for the second quarter of FY2013.

Income from operations was RMB5.7 million ($0.9 million) for the second quarter of FY2013, compared to RMB2.1 million for the same period of FY2012. This increase in income from operations is mainly driven by top line growth as well as decrease in SG&A expenses as a percentage of total revenues.

Net income attributable to ordinary shareholders increased by 278.8% to RMB5.3 million ($0.8 million) for the second quarter of FY2013 from RMB1.4 million for the same period of FY2012. Diluted earnings per share was RMB1.34 ($0.21) for the second quarter of FY2013, compared to RMB0.35 ($0.06) for the same period of FY2012.

Adjusted EBITDA was RMB7.6 million ($1.2 million) for the second quarter of FY2013, up 249.9% compared to RMB2.2 million for the same period of FY2012.


For the Three Months Ended


December 31,

Reconciliation of Adjusted EBITDA

2011


2012


2012

 to Net Income (Loss)

RMB


RMB


USD







Net income (loss)

 RMB1,581,383


 RMB5,887,567


RMB932,153

Provision for income taxes

104,566


423,308


67,020

Interest expense

133,384


546,658


86,550

Stock compensation expense

261,483


452,348


71,618

Depreciation, amortization and accretion

77,434


242,778


38,438







Adjusted EBITDA

 RMB2,158,250


 RMB7,552,659


RMB1,195,779

As of December 31, 2012, cash and cash equivalents were RMB2.1 million ($0.3 million). Cash and cash equivalents consist of cash on hand, demand deposits and highly liquid short-term debt investments with stated maturities of no more than six months.

Year-to-Date FY2013 Financial Results

Total revenues for the six months ended December 31, 2012 increased by 53.8% to RMB55.0 million ($8.7 million) from RMB35.8 million for the same period of fiscal 2012, primarily driven by strong sales from fracturing service business.

Gross profit increased to RMB16.5 million ($2.6 million) for the six months ended December 31, 2012, up 42.0% from the same period of fiscal 2012. Gross margin decreased to 29.92% for the six months ended December 31, 2012 from 32.39% for the same period ended December 31, 2011. The decrease in gross margin was mainly related to furnace sales, which carry a lower margin than our other solutions.

Selling and distribution expenses increased by 28.2% from RMB2.3 million for the six months ended December 31, 2011 to RMB2.9 million ($0.5 million) for the same period in fiscal 2013. This increase was primarily due to increased shipping charge and maintenance expenses. General and administrative expenses decreased by 22.9% from RMB5.8 million for the six months ended December 31, 2011 to RMB4.5 million ($0.7 million) for the same period of fiscal 2013. Research and development expenses were RMB5.7 million ($0.9 million) for the six months ended December 31, 2012, up 23.1% from the same period of fiscal 2012. Overall, operating expenses were RMB13.1 million ($2.1 million) for the six months ended December 31, 2012, steady compared to same period of last year.

Income from operations was RMB3.3 million ($0.5 million) for the six months ended December 31, 2012, compared to a loss of RMB1.1 million for the same period ended December 31, 2011. This increase in income from operations can be attributed primarily to an increase in total revenues and decrease in operating expenses as a percentage of total revenues.

Net income attributable to ordinary shareholders increased by 246.5% to RMB2.9 million ($0.5 million) for the six months ended December 31, 2012, an improvement of RMB4.9 million compared to a loss of RMB2.0 million for the same period of fiscal 2012. Diluted earnings per share was RMB0.75 ($0.12) for the six months ended December 31, 2012, compared to diluted loss per share of RMB0.51 for the same period ended December 31, 2011.

Adjusted EBITDA was RMB6.1 million ($1.0 million) for the six months ended December 31, 2012, compared to a loss of RMB0.6 million for the same period of fiscal 2012, an improvement of 1,048.5%.


For the Six Months Ended


December 31,

Reconciliation of Adjusted EBITDA

2011


2012


2012

 to Net Income (Loss)

RMB


RMB


USD







Net income (loss)

 RMB-1,823,813


 RMB3,549,283


$561,942

Provision for income taxes

213,081


454,932


72,027

Interest expense

276,295


876,414


138,759

Stock compensation expense

524,847


907,153


143,626

Depreciation, amortization and accretion

166,157


315,157


49,897







Adjusted EBITDA

 RMB-643,433


 RMB6,102,939


$966,251

For the six months ended December 31, 2012, net cash provided by operating activities was RMB5.2 million ($0.8 million). This was an increase of RMB7.2 million ($1.1 million) compared to net cash used in operating activities of RMB2.0 million for the six months ended December 31, 2011.

Net cash used in financing activities amounted to RMB6.6 million ($1.0 million) for the six months ended December 31, 2012, compared to RMB0.2 million for the same period of fiscal 2012. During the fiscal 2013 six-month period, we paid back a prior RMB12 million ($1.9 million) commercial bank loan and received a RMB5 million ($0.8 million) loan from another bank, which was guaranteed by one of our shareholders.

Net cash used in investing activities was RMB0.4 million (approximately $0.1 million) for the six months ended December 31, 2012, an increase of RMB0.3 million from RMB0.1 million for the same period of fiscal 2012. The increase was related to the purchase a motor vehicle.

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 e-mail: [email protected].

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.

Contact:      

At the Company:
Recon Technology, Ltd.
Tel: +86-10-8494-5799
Email: [email protected]
Web: http://www.recon.cn

Investor Relations:
Tina Xiao
Weitian Group LLC
Email: [email protected]
Web: http://www.weitian-ir.com

SOURCE Recon Technology, Ltd.

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
While not quite mainstream yet, WebRTC is starting to gain ground with Carriers, Enterprises and Independent Software Vendors (ISV’s) alike. WebRTC makes it easy for developers to add audio and video communications into their applications by using Web browsers as their platform. But like any market, every customer engagement has unique requirements, as well as constraints. And of course, one size does not fit all. In her session at WebRTC Summit, Dr. Natasha Tamaskar, Vice President, Head of C...
Sematext is a globally distributed organization that builds innovative Cloud and On Premises solutions for performance monitoring, alerting and anomaly detection (SPM), log management and analytics (Logsene), and search analytics (SSA). We also provide Search and Big Data consulting services and offer 24/7 production support for Solr and Elasticsearch.
SYS-CON Events announced today that Emcien will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Emcien’s vision is to let anyone use data to know the future. Emcien has built an automated, predictive analysis product that improves the lives of real people. Emcien allows people to automate their data analysis so they can build a better future.
The speed of software changes in growing and large scale rapid-paced DevOps environments presents a challenge for continuous testing. Many organizations struggle to get this right. Practices that work for small scale continuous testing may not be sufficient as the requirements grow. In his session at DevOps Summit, Marc Hornbeek, Sr. Solutions Architect of DevOps continuous test solutions at Spirent Communications, will explain the best practices of continuous testing at high scale, which is r...
DevOps is all the rage these days and with good reason as it promises to reduce the time-to-market for new applications. It also promises to improve change management, allowing teams to deploy changes to their applications quickly and efficiently. However, DevOps isn’t something you buy, install, or implement; rather it is the symptom of an appropriate organizational system. In his session at DevOps Summit, Mark Thiele, EVP, Data Center Technologies at SUPERNAP International, will discuss how ...
Hosted PaaS providers have given independent developers and startups huge advantages in efficiency and reduced time-to-market over their more process-bound counterparts in enterprises. Software frameworks are now available that allow enterprise IT departments to provide these same advantages for developers in their own organization. In his workshop session at DevOps Summit, Troy Topnik, ActiveState’s Technical Product Manager, will show how on-prem or cloud-hosted Private PaaS can enable organ...
SYS-CON Events announced today that Litmus Automation will exhibit at SYS-CON's 16th International Cloud Expo®, which will take place on June 9-11, 2015, at the Javits Center in New York City, NY. Litmus Automation’s vision is to provide a solution for companies that are in a rush to embrace the disruptive Internet of Things technology and leverage it for real business challenges. Litmus Automation simplifies the complexity of connected devices applications with Loop, a secure and scalable clou...
The world's leading Cloud event, Cloud Expo has launched Microservices Journal on the SYS-CON.com portal, featuring over 19,000 original articles, news stories, features, and blog entries. DevOps Journal is focused on this critical enterprise IT topic in the world of cloud computing. Microservices Journal offers top articles, news stories, and blog posts from the world's well-known experts and guarantees better exposure for its authors than any other publication. Follow new article posts on T...
Internet of Things (IoT) will be a hybrid ecosystem of diverse devices and sensors collaborating with operational and enterprise systems to create the next big application. In their session at @ThingsExpo, Bramh Gupta, founder and CEO of robomq.io, and Fred Yatzeck, principal architect leading product development at robomq.io, will discuss how choosing the right middleware and integration strategy from the get-go will enable IoT solution developers to adapt and grow with the industry, while at...
SYS-CON Events announced today the IoT Bootcamp – Jumpstart Your IoT Strategy, being held June 9–10, 2015, in conjunction with 16th Cloud Expo and Internet of @ThingsExpo at the Javits Center in New York City. This is your chance to jumpstart your IoT strategy. Combined with real-world scenarios and use cases, the IoT Bootcamp is not just based on presentations but includes hands-on demos and walkthroughs. We will introduce you to a variety of Do-It-Yourself IoT platforms including Arduino, Ras...
Even though it’s now Microservices Journal, long-time fans of SOA World Magazine can take comfort in the fact that the URL – soa.sys-con.com – remains unchanged. And that’s no mistake, as microservices are really nothing more than a new and improved take on the Service-Oriented Architecture (SOA) best practices we struggled to hammer out over the last decade. Skeptics, however, might say that this change is nothing more than an exercise in buzzword-hopping. SOA is passé, and now that people are ...
With the arrival of the Big Data revolution, a data professional is expected to master a broad spectrum of complex domains including data processing, mathematics, programming languages, machine learning techniques, and business knowledge. While this mastery is undoubtedly important, this narrow focus on tool usage has divorced many from the imagination required to solve real-world problems. As the demand for analysis increases, the data science community must transform from tool experts to "data...
SYS-CON Events announced today that the DevOps Institute has been named “Association Sponsor” of SYS-CON's DevOps Summit, which will take place on June 9–11, 2015, at the Javits Center in New York City, NY. The DevOps Institute provides enterprise level training and certification. Working with thought leaders from the DevOps community, the IT Service Management field and the IT training market, the DevOps Institute is setting the standard in quality for DevOps education and training.
SYS-CON Events announced today the DevOps Foundation Certification Course, being held June ?, 2015, in conjunction with DevOps Summit and 16th Cloud Expo at the Javits Center in New York City, NY. This sixteen (16) hour course provides an introduction to DevOps – the cultural and professional movement that stresses communication, collaboration, integration and automation in order to improve the flow of work between software developers and IT operations professionals. Improved workflows will res...
Containers and microservices have become topics of intense interest throughout the cloud developer and enterprise IT communities. Accordingly, attendees at the upcoming 16th Cloud Expo at the Javits Center in New York June 9-11 will find fresh new content in a new track called PaaS | Containers & Microservices Containers are not being considered for the first time by the cloud community, but a current era of re-consideration has pushed them to the top of the cloud agenda. With the launch ...