eFuture Information Technology Inc. (Nasdaq:EFUT) (the "Company" or
"eFuture"), a leading software and solution provider and a mobile
business enabler to China's rapidly growing retail and consumer
goods industries, today announced its unaudited financial results
for the third quarter ended September 30, 2015.
Third Quarter
2015 Financial
and Operational Highlights
- Third quarter total revenue increased 6% year-over-year to
RMB36.1 million (US$5.7 million).
- Gross profit increased 7% year-over-year to RMB16.4 million
(US$ 2.6 million).
- Adjusted EBITDA was negative RMB0.8 million (US$0.01 million),
compared to negative RMB0.1 million in the third quarter 2014.
- Operating loss was RMB3.7 million (US$ 0.6 million), compared
to an operating loss of RMB1.8 million in the third quarter
2014.
- Net loss was RMB3.9 million (US$0.6 million), compared to a net
loss of RMB 1.8 million in the third quarter 2014.
- Backlog as of September 30, 2015 decreased 11% year-over-year
to RMB197.7 million (US$31.1 million).
"In the first half of 2015, we focused on the company's
management structure realignment to better serve our core
business--software and services. We also adjusted and more clearly
identified the direction of innovative businesses and selected a
few early-stage projects for incubation. In the third quarter of
2015, we fine-tuned the company's business strategy--build an open
and cooperative software and cloud service platform that forms the
omni-channel sales loop by connecting retailers, merchandises and
consumers and provides an O2O ("Online together with Offline")
matchmaker service to help internet platforms cooperate with
physical retailers in different real-world scenarios." Mr. David
Ren, Chief Executive Officer of eFuture, commented.
Ms. Ping Yu, Chief Financial Officer, further commented, "Due to
the continued reduction of physical retail business under the
current macro economy condition, our contract value and associated
backlog decreased in the third quarter of 2015. However, new
business opportunities in the O2O area should benefit both physical
retailers and internet players and help to create greater demand
for eFuture's services. We believe that we have the strongest
physical retail client base especially among top 100 chain
retailers. Looking ahead, we will continue to enhance our core
software business and invest in high-potential innovative
synergistic businesses. We remain confident in our repositioned
strategy and our ability to acquire new revenue streams for our
omni-channel cloud service platform over the long term."
THIRD QUARTER
2015 FINANCIAL
RESULTS
Revenue
Total revenue for the third quarter 2015 increased 6% to RMB36.1
million (US$5.7 million) from RMB34.0 million in the third quarter
2014.
Revenue Breakdown |
|
|
3Q14 |
3Q15 |
|
RMB '000 |
RMB '000 |
USD '000 |
Y-o-Y Change |
Software revenue |
13,497 |
13,337 |
2,099 |
-1% |
Hardware revenue |
597 |
605 |
95 |
1% |
Service fee revenue |
19,906 |
22,208 |
3,494 |
12% |
Total |
34,000 |
36,150 |
5,688 |
6% |
Software revenue for the third quarter 2015 decreased 1%
year-over-year to RMB13.3 million (US$2.1 million) from RMB13.5
million in the third quarter 2014.
Hardware revenue in the third quarter 2015 increased 1%
year-over-year to RMB0.6 million (US$0.1 million) from RMB0.6
million in the third quarter 2014.
Service fee revenue for the third quarter 2015 increased 12%
year-over-year to RMB22.2 million (US$3.5 million) from RMB19.9
million in the third quarter 2014. The increase was primarily
attributable to increased revenue recognized from customers in the
shopping mall industry in the third quarter 2015.
Cost of Revenue
Cost of revenue for the third quarter 2015 increased 6% to
RMB19.8 million (US$3.1 million) from RMB18.7 million in the third
quarter 2014. The primary reason was the increased amortization of
software costs associated with myStore development from previous
years.
Cost of Revenue Breakdown |
|
|
3Q14 |
3Q15 |
|
RMB '000 |
RMB '000 |
USD '000 |
Y-o-Y Change |
Cost of software revenue |
2,720 |
2,895 |
456 |
6% |
Cost of hardware revenue |
574 |
301 |
47 |
-48% |
Cost of service fee revenue |
14,482 |
13,762 |
2,166 |
-5% |
Amortization of software costs |
943 |
2,799 |
440 |
197% |
Total |
18,719 |
19,757 |
3,109 |
6% |
Gross Profit and Gross Margin
Gross profit increased by 7% year-over-year to RMB16.4million
(US$2.6 million) from RMB15.3 million in the third quarter 2014,
and consolidated gross margin for the third quarter 2015 and 2014
was 45%, consolidated gross margin remained stable.
Operating Expenses
Research and development ("R&D") expenses for the third
quarter 2015 increased 118% year-over-year to RMB2.8 million
(US$0.4 million), or 8% of total revenue, compared with RMB1.3
million, or 4% of total revenue in the third quarter 2014. The
increase in R&D expenses was primarily attributable to an
expenditure relating to a software project and myStore in the third
quarter 2015.
General and administrative expenses ("G&A") for the third
quarter 2015 increased 50% year-over-year to RMB8.7
million (US$1.4 million), representing 24% of total revenue,
compared with RMB5.8 million, or 17% of total revenue in the third
quarter 2014. The increase in G&A expenses was primarily
attributable to an increased bad debt provision resulting from a
trade receivable that had not been collected on schedule, as well
as higher rental costs and expenses resulting from moving into two
new offices in Beijing.
Selling and distribution ("S&D") expenses for the third
quarter 2015 decreased 14% year-over-year to RMB8.6 million (US$1.4
million), representing 24% of total revenue, compared with RMB10.0
million, or 29% of total revenue in the third quarter 2014. The
decrease in S&D expenses was primarily attributable to
decreased promotion expenses on streamlined innovative businesses,
as well as improved management efficiency.
Operating Loss
Operating loss in the third quarter 2015 was RMB3.7 million
(US$0.6 million), compared to operating loss of RMB1.8 million in
the third quarter 2014.
Net Loss/Adjusted Net Loss and
Loss Per Share/Adjusted
Loss Per Share
Third quarter 2015 net loss was RMB3.9 million (US$0.6 million),
compared with a net loss of RMB1.8 million in the third quarter
2014. Adjusted net loss for the third quarter 2015 was RMB0.7
million (US$0.1 million), compared with an adjusted net loss of
RMB0.5 million in the third quarter 2014.
Basic and diluted loss per share in the third quarter 2015 was
RMB0.81 (US$0.13), compared to basic and diluted loss per share of
RMB0.43 in the third quarter 2014. Adjusted diluted loss per share
was RMB0.15 (US$0.02), compared to adjusted diluted loss per share
of RMB0.13 in the third quarter 2014.
EBITDA
Adjusted EBITDA for the third quarter 2015 was negative RMB0.08
million (US$0.01 million), compared to negative RMB0.13 million in
the third quarter 2014.
Balance Sheet and Cash Flow
As of September 30, 2015, cash and cash equivalents were RMB48.4
million (US$7.6 million), a decrease of RMB16.2 million from
RMB64.6 million as of December 31, 2014, The decrease was primarily
attributable to the payment of annual bonuses and expenditures
incurred on customers' projects.
Total accounts receivable as of September 30, 2015 decreased 15%
to RMB34.8 million (US$5.5 million) from RMB40.9 million as of
December 31, 2014. We also strengthened the management of our
accounts receivable relative to 2014.
Inventory and work in process as of September 30, 2015 increased
204% to RMB44.2 million (US$7.0 million) from RMB14.6 million as of
December 31, 2014. The increase was primarily attributable to a
great number of on-going projects which had not reached the point
of revenue recognition.
For the quarter ended September 30, 2015, net cash provided by
operating activities was RMB10.3 million (US$1.6 million). Net cash
used in investing activities was RMB3.4 million (US$0.5 million).
Net cash used in financing activities was RMB3.0 million (US$0.5
million).
FOURTH QUARTER
2015
GUIDANCE
eFuture expects total revenue for the fourth quarter 2015 to be
in the range of RMB82 million (US$12.9 million) to RMB88 million
(US$13.8 million). Adjusted EBITDA for the fourth quarter 2015 is
expected to be in the range of RMB9 million (US$1.4 million) to
RMB13 million (US$2.0 million).
TAX INSPECTION
The Beijing tax authority has recently conducted a tax
inspection on our wholly owned subsidiary, eFuture (Beijing)
Royalstone Information Technology Inc. ("eFuture Beijing") for the
period from 2004 to 2014. Due to the timing difference between
financial reporting and tax reporting regarding the realization of
income from revenue and advance payments from customers, the
Beijing tax authority has taken the position that eFuture Beijing
failed, under local tax regulations, to recognize income and,
therefore timely make tax payments. Based on our internal
estimates, eFuture Beijing may be required to pay the unpaid taxes
and possibly a fine and late payment fees, in the range between
RMB6.0 million (US$0.9millon) and RMB30.9 million
(US$4.9million). Since our previously filed US financial statements
have provided provisions for the unpaid taxes, our auditors have
concluded that a restatement of financial statements is not
required. Any unpaid tax, fine and late payment fees (if any) are
expected to be due within 2015 after they are issued by the Beijing
tax authority. The funds need to pay taxes, fines and late
payment fees will come from our working capital and we anticipate
that the expense will be booked in the fourth quarter in 2015.
eFuture Beijing has taken several corrective measures, including
personnel changes and staff training regarding Chinese tax law
compliance, so this does not occur again.
CURRENCY CONVENIENCE TRANSLATION
For the convenience of readers, certain RMB amounts have been
translated into US dollars at the rate of RMB6.3556 to US$1.00, the
noon buying rate for US dollars in effect on September 30, 2015 for
cable transfers of RMB per U.S. dollar as certified for customs
purposes by the Federal Reserve Bank of New York.
USE OF NON-GAAP FINANCIAL MEASURES
To supplement eFuture's unaudited consolidated financial results
presented in accordance with U.S. GAAP, eFuture uses the following
non-GAAP measures defined as non-GAAP financial measures by the
U.S. Securities and Exchange Commission: (i) adjusted EBITDA
excluding amortization of acquired software technology,
amortization of intangibles, impairment of intangible assets,
share-based compensation expenses and depreciation; (ii) adjusted
net income excluding amortization of acquired software technology,
amortization of intangibles, impairment of intangible assets,
share-based compensation expenses and accretion on convertible
notes; and (iii) adjusted basic and diluted earnings per share
excluding amortization of acquired software technology,
amortization of intangibles, share-based compensation expenses and
accretion on convertible notes.
The presentation of these non-GAAP financial measures is not
intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with
U.S. GAAP.
eFuture believes that these non-GAAP financial measures provide
meaningful supplemental information regarding its performance and
liquidity by excluding expenses that may not be indicative of its
operating performance from a cash perspective or be indicative of
its operating performance. eFuture believes that both management
and investors benefit from referring to these non-GAAP financial
measures in assessing the Company's performance and when planning
and forecasting future periods. These non-GAAP financial measures
also facilitate management's internal comparisons to eFuture's
historical performance and liquidity. eFuture computes its non-GAAP
financial measures using the same consistent method from quarter to
quarter. The Company believes these non-GAAP financial measures are
useful to investors in allowing for greater transparency with
respect to supplemental information used by management in its
financial and operational decision-making. The accompanying
paragraphs have more details on the reconciliations between GAAP
financial measures that are most directly comparable to non-GAAP
financial measures.
eFuture's management also believes that EBITDA, defined as
earnings before interest, income tax expense, depreciation and
amortization is a useful financial metric to assess its operating
and financial performance before the impact of investing and
financing transactions and income taxes. In addition, eFuture's
management believes that EBITDA is widely used by other companies
in the software industry and may be used by investors as a measure
of its financial performance. Given the significant investments
that eFuture has made in property, equipment, depreciation and
amortization expense comprises a meaningful portion of the
Company's cost structure. eFuture's management believes that EBITDA
will provide investors with a useful tool for comparability between
periods because it eliminates depreciation and amortization expense
attributable to capital expenditures. The presentation of EBITDA
should not be construed as an indication that the Company's future
results will be unaffected by other charges and gains eFuture
considers to be outside the ordinary course of its business.
The use of EBITDA and adjusted EBITDA has certain limitations.
Depreciation and amortization expense for various long-term assets,
income tax expense, interest expense and interest income have been
and will be incurred and are not reflected in the presentation of
EBITDA. Further, share-based compensation expenses have been and
will be incurred and are not reflected in the presentation of
adjusted EBITDA. Each of these items should also be considered in
the overall evaluation of eFuture's financial results. The term
EBITDA or adjusted EBITDA is not defined under U.S. GAAP, and
EBITDA or adjusted EBITDA is not a measure of net income, operating
income, operating performance or liquidity presented in accordance
with U.S. GAAP. When assessing eFuture's operating and financial
performance, you should not consider this data in isolation or as a
substitute for its net income, operating income or any other
operating performance measure that is calculated in accordance with
U.S. GAAP. In addition, the Company's EBITDA and adjusted EBITDA
may not be comparable to EBITDA or similarly titled measures
utilized by other companies since such other companies may not
calculate EBITDA in the same manner as eFuture does.
STATEMENT REGARDING UNAUDITED FINANCIAL
INFORMATION
The unaudited financial information set forth above is subject
to adjustments that may be identified when audit work is performed
on the Company's year-end financial statements, which could result
in significant differences from this unaudited financial
information.
ABOUT EFUTURE INFORMATION TECHNOLOGY INC.
eFuture Information Technology Inc. (Nasdaq:EFUT) is a leading
software and solution provider and a mobile business enabler to
China's rapidly growing retail and consumer goods industries.
eFuture's clients include over 1,000 active retailers with more
than 50,000 physical stores across China, of which approximately
45% were ranked among the top 100 chain retailers during 2014. For
more information about eFuture, please visit
http://www.e-future.com.cn.
SAFE HARBOR
This announcement contains forward-looking statements. These
statements are made under the "safe harbor" provisions of the U.S.
Private Securities Litigation Reform Act of 1995. These
forward-looking statements can be identified by terminology such as
"will," "expects," "anticipates," "future," "intends," "plans,"
"believes," "estimates" and similar statements. Among other things,
2013 financial outlook and quotations from management in this
announcement, as well as strategic and operational plans, contain
forward-looking statements. eFuture may also make written or oral
forward-looking statements in periodic reports to the Securities
and Exchange Commission (the "SEC"), in its annual report to
shareholders, in press releases and other written materials and in
oral statements made by its officers, directors or employees to
second parties. Statements that are not historical facts, including
statements about the Company's beliefs and expectations, are
forward-looking statements. Forward-looking statements involve
inherent risks and uncertainties. A number of factors could cause
actual results to differ materially from those contained in any
forward-looking statement, including but not limited to the
following: eFuture's anticipated growth strategies; eFuture's
future business development, results of operations and financial
condition; expected changes in the Company's revenue and certain
cost or expense items; eFuture's ability to attract clients and
leverage its brand; trends and competition in the software
industry; the Company's ability to control expenses and maintain
profit margins; the Company's ability to hire, train and retain
qualified managerial and other employees; the Company's ability to
develop new software and pilot new business models at desirable
locations in a timely and cost-effective manner; the performance of
third parties under contracts with the Company; the expected growth
of the Chinese economy software market in retail and consumer goods
industries; and Chinese governmental policies relating to private
managers and operators of software and applicable tax rates.
Further information regarding these and other risks will be
included in eFuture's annual report on Form 20-F and other
documents filed with the SEC. All information provided in this
press release and in the attachments is as of November 20, 2015,
and the Company undertakes no duty to update such information or
any other forward-looking information, except as required under
applicable law.
– FINANCIAL TABLES TO FOLLOW –
EFUTURE INFORMATION
TECHNOLOGY INC. AND SUBSIDIARIES |
Exchange rate |
6.3556 |
CONDENSED CONSOLIDATED
BALANCE SHEETS |
|
|
|
|
|
Chinese Yuan (Renminbi) |
U.S.
Dollars |
|
December 31, |
September 30, |
September 30, |
|
2014 |
2015 |
2015 |
|
(Audited) |
(Unaudited) |
(Unaudited) |
ASSETS |
|
|
|
Current assets |
|
|
|
Cash and cash equivalents |
64,558,916 |
48,378,950 |
7,612,019 |
Trade receivables,net of allowance for
doubtful accounts of ¥4,502,766 and ¥7,220,496($1,136,084),
respectively |
40,889,759 |
34,833,964 |
5,480,830 |
Refundable value added tax |
6,765,916 |
3,178,803 |
500,158 |
Advances to employees |
1,117,272 |
996,375 |
156,771 |
Other receivables |
2,474,076 |
2,520,063 |
396,511 |
Prepaid expenses |
1,554,052 |
1,578,871 |
248,422 |
Inventory and work in process,net of
inventory provision of ¥4,356,091 and ¥1,962,802($308,830),
respectively |
14,560,195 |
44,241,606 |
6,961,043 |
Deferred tax assets, current portion |
7,046,782 |
7,012,586 |
1,103,371 |
Total current assets |
138,966,968 |
142,741,218 |
22,459,125 |
Non-current assets |
|
|
|
Long-term investments,net of impairment of
¥240,000 and ¥240,000($37,762), respectively |
-- |
-- |
-- |
Property and equipment, net of accumulated
depreciation of ¥9,515,986 and ¥10,556,401($1,660,961),
respectively |
3,279,483 |
3,967,689 |
624,282 |
Intangible assets, net of accumulated
amortization of ¥80,190,029 and ¥85,734,817($13,489,650),
respectively |
40,294,260 |
39,145,579 |
6,159,226 |
Goodwill |
80,625,667 |
80,625,667 |
12,685,768 |
Deferred tax assets |
919,637 |
983,709 |
154,778 |
Total non-current
assets |
125,119,047 |
124,722,644 |
19,624,054 |
Total assets |
264,086,015 |
267,463,862 |
42,083,179 |
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
Current liabilities |
|
|
|
Short-term loans |
10,692,003 |
10,000,000 |
1,573,416 |
Trade payables |
12,509,613 |
11,835,505 |
1,862,217 |
Other payables |
17,978,021 |
13,596,533 |
2,139,300 |
Accrued expenses |
24,685,555 |
7,849,899 |
1,235,115 |
Taxes payable |
16,128,358 |
8,969,722 |
1,411,310 |
Advances from customers |
51,661,078 |
78,425,769 |
12,339,633 |
Total current
liabilities |
133,654,628 |
130,677,428 |
20,560,991 |
|
|
|
|
Equity |
|
|
|
Ordinary shares $0.0756 U.S. dollars par
value; 6,613,756 shares, authorized;3,989,626 shares and
4,858,651 shares issued and outstanding, respectively |
2,357,978 |
2,762,195 |
434,608 |
Additional paid-in capital |
234,405,541 |
255,567,492 |
40,211,387 |
Statutory reserves |
8,574,634 |
8,574,634 |
1,349,146 |
Accumulated deficits |
(114,906,766) |
(130,117,887) |
(20,472,951) |
Total equity |
130,431,387 |
136,786,434 |
21,522,190 |
Total liabilities and
equity |
264,086,015 |
267,463,862 |
42,083,181 |
|
|
|
|
|
|
|
EFUTURE INFORMATION
TECHNOLOGY INC. AND SUBSIDIARIES |
Exchange rate |
6.3556 |
CONDENSED CONSOLIDATED
INCOME STATEMENTS |
|
|
|
|
|
|
|
|
|
|
Nine
months ended |
Three
months ended |
|
Chinese Yuan (Renminbi) |
U.S.
Dollars |
|
Chinese Yuan (Renminbi) |
U.S.
Dollars |
|
|
September 30, |
September 30, |
September 30, |
|
September 30, |
September 30, |
September 30, |
|
|
2014 |
2015 |
2015 |
Y-o-Y Change |
2014 |
2015 |
2015 |
Y-o-Y Change |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
% |
(Unaudited) |
(Unaudited) |
(Unaudited) |
% |
Revenues |
|
|
|
|
|
|
|
|
Software revenue |
28,764,116 |
31,743,786 |
4,994,617 |
10% |
13,497,500 |
13,336,840 |
2,098,439 |
-1% |
Hardware revenue |
2,440,437 |
6,231,569 |
980,485 |
155% |
596,737 |
605,285 |
95,236 |
1% |
Service fee revenue |
56,700,616 |
54,579,794 |
8,587,670 |
-4% |
19,905,857 |
22,207,540 |
3,494,169 |
12% |
Total revenues |
87,905,169 |
92,555,149 |
14,562,770 |
5% |
34,000,094 |
36,149,665 |
5,687,845 |
6% |
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
|
|
|
|
|
|
Cost of software revenue |
7,468,927 |
7,144,706 |
1,124,159 |
-4% |
2,720,186 |
2,894,822 |
455,476 |
6% |
Cost of hardware revenue |
2,304,670 |
5,325,887 |
837,983 |
131% |
574,264 |
300,869 |
47,339 |
-48% |
Cost of service fee revenue |
39,700,584 |
36,687,609 |
5,772,486 |
-8% |
14,481,585 |
13,762,134 |
2,165,356 |
-5% |
Amortization of software costs |
2,811,196 |
5,544,788 |
872,426 |
97% |
943,319 |
2,798,826 |
440,372 |
197% |
Total cost of revenues |
52,285,377 |
54,702,990 |
8,607,054 |
5% |
18,719,354 |
19,756,651 |
3,108,542 |
6% |
|
|
|
|
|
|
|
|
|
Gross profit |
35,619,792 |
37,852,159 |
5,955,716 |
6% |
15,280,740 |
16,393,014 |
2,579,302 |
7% |
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
Research and development expenses |
2,030,635 |
4,681,306 |
736,564 |
131% |
1,283,817 |
2,800,766 |
440,677 |
118% |
General and administrative expenses |
17,074,046 |
23,071,164 |
3,630,053 |
35% |
5,804,916 |
8,718,122 |
1,371,723 |
50% |
Selling and distribution expenses |
29,722,098 |
24,901,876 |
3,918,100 |
-16% |
9,988,986 |
8,606,659 |
1,354,185 |
-14% |
Total operating
expenses |
48,826,779 |
52,654,346 |
8,284,717 |
8% |
17,077,719 |
20,125,547 |
3,166,585 |
18% |
|
|
|
|
|
|
|
|
|
Loss from operations |
(13,206,987) |
(14,802,187) |
(2,329,001) |
|
(1,796,979) |
(3,732,533) |
(587,283) |
|
|
|
|
|
|
|
|
|
|
Other income (expenses) |
|
|
|
|
|
|
|
|
Interest income |
481,260 |
237,051 |
37,298 |
|
70,717 |
54,850 |
8,630 |
|
Interest expenses |
(25,025) |
(708,758) |
(111,517) |
|
(25,025) |
(222,530) |
(35,013) |
|
Other income |
564,481 |
302,154 |
47,541 |
|
429,509 |
293,351 |
46,156 |
|
Foreign currency exchange
gain |
19,015 |
130,743 |
20,571 |
|
341 |
189,786 |
29,861 |
|
Loss before income tax |
(12,167,256) |
(14,840,997) |
(2,335,106) |
|
(1,321,437) |
(3,417,076) |
(537,648) |
|
Less: Income tax expense (benefit) |
(827,921) |
370,124 |
58,236 |
|
477,562 |
478,126 |
75,229 |
|
Net loss |
(11,339,335) |
(15,211,121) |
(2,393,342) |
|
(1,798,999) |
(3,895,202) |
(612,877) |
|
Loss per share |
|
|
|
|
|
|
|
|
Basic |
(2.69) |
(3.36) |
(0.53) |
|
(0.43) |
(0.81) |
(0.13) |
|
Diluted |
(2.69) |
(3.36) |
(0.53) |
|
(0.43) |
(0.81) |
(0.13) |
|
Basic weighted average shares
outstanding |
4,217,184 |
4,527,425 |
4,527,425 |
|
4,217,426 |
4,835,636 |
4,835,636 |
|
Fully diluted weighted average shares
outstanding |
4,217,184 |
4,594,382 |
4,594,382 |
|
4,217,426 |
4,925,815 |
4,925,815 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EFUTURE INFORMATION
TECHNOLOGY INC. AND SUBSIDIARIES |
Exchange rate |
6.3556 |
NON-GAAP MEASURES OF
PERFORMANCE |
|
|
|
|
|
|
|
|
Nine
months ended |
Three
months ended |
|
Chinese Yuan (Renminbi) |
U.S.
Dollars |
Chinese Yuan (Renminbi) |
U.S.
Dollars |
|
September 30, |
September 30, |
September 30, |
September 30, |
September 30, |
September 30, |
|
2014 |
2015 |
2015 |
2014 |
2015 |
2015 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
NON-GAAP OPERATING INCOME
(LOSS) AND ADJUSTED EBITDA |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss (GAAP
basis) |
(13,206,987) |
(14,802,187) |
(2,329,001) |
(1,796,979) |
(3,732,533) |
(587,283) |
|
|
|
|
|
|
|
Adjustments for non-GAAP measures of
performance: |
|
|
|
|
|
|
Add back amortization of
intangibles |
2,811,196 |
5,544,788 |
872,426 |
943,319 |
2,798,826 |
440,372 |
Add back
share-based compensation expenses |
901,508 |
1,637,076 |
257,580 |
300,901 |
369,582 |
58,151 |
Adjusted non-GAAP operating
loss |
(9,494,283) |
(7,620,323) |
(1,198,995) |
(552,759) |
(564,125) |
(88,760) |
Add back depreciation |
1,383,129 |
1,347,691 |
212,048 |
419,082 |
486,493 |
76,546 |
|
|
|
|
|
|
|
Adjusted EBITDA (Earnings
before interest, taxes, depreciation and
amortization) |
(8,111,154) |
(6,272,632) |
(986,947) |
(133,677) |
(77,632) |
(12,215) |
|
|
|
|
|
|
|
NON-GAAP OPERATING LOSS AND
ADJUSTED EBITDA, as a percentage of revenue |
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating loss (GAAP
BASIS) |
-15% |
-16% |
-16% |
-5% |
-10% |
-10% |
|
|
|
|
|
|
|
Adjustments for non-GAAP measures of
performance: |
|
|
|
|
|
|
Amortization of
intangibles |
3% |
6% |
6% |
3% |
8% |
8% |
Share-based
compensation expenses |
1% |
2% |
2% |
1% |
1% |
1% |
Adjusted non-GAAP operating
loss |
-11% |
-8% |
-8% |
-2% |
-2% |
-2% |
Depreciation |
2% |
1% |
1% |
1% |
1% |
1% |
|
|
|
|
|
|
|
Adjusted EBITDA (Earnings
before interest, taxes, depreciation and
amortization) |
-9% |
-7% |
-7% |
0% |
0% |
0% |
|
|
|
|
|
|
|
NON-GAAP EARNINGS PER
SHARE |
|
|
|
|
|
|
Net loss |
(11,339,335) |
(15,211,121) |
(2,393,342) |
(1,798,999) |
(3,895,202) |
(612,877) |
Amortization of
intangibles |
2,811,196 |
5,544,788 |
872,426 |
943,319 |
2,798,826 |
440,372 |
Share-based
compensation expenses |
901,508 |
1,637,076 |
257,580 |
300,901 |
369,582 |
58,151 |
Adjusted net loss |
(7,626,631) |
(8,029,257) |
(1,263,336) |
(554,779) |
(726,794) |
(114,355) |
|
|
|
|
|
|
|
Adjusted non-GAAP diluted loss
per share |
(1.81) |
(1.77) |
(0.28) |
(0.13) |
(0.15) |
(0.02) |
Shares used to compute non-GAAP diluted loss
per share |
4,217,184 |
4,527,425 |
4,527,425 |
4,217,426 |
4,835,636 |
4,835,636 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EFUTURE INFORMATION
TECHNOLOGY INC. AND SUBSIDIARIES |
Exchange rate |
6.3556 |
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
|
|
|
|
|
|
|
|
Nine
months ended |
Three
months ended |
|
Chinese Yuan (Renminbi) |
U.S.
Dollars |
Chinese Yuan (Renminbi) |
U.S.
Dollars |
|
September 30, |
September 30, |
September 30, |
September 30, |
September 30, |
September 30, |
|
2014 |
2015 |
2015 |
2014 |
2015 |
2015 |
|
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
(Unaudited) |
Cash flows from operating
activities: |
|
|
|
|
|
|
Net loss |
(11,339,335) |
(15,211,121) |
(2,393,342) |
(1,798,999) |
(3,895,202) |
(612,877) |
Adjustments to reconcile net loss to net cash
flows used in operating activities: |
|
|
|
|
|
|
Depreciation of property and equipment |
1,383,129 |
1,347,691 |
212,048 |
419,082 |
486,493 |
76,546 |
Amortization of intangible assets |
2,811,196 |
5,544,788 |
872,426 |
943,319 |
2,798,826 |
440,372 |
Loss on disposal of property and
equipment |
23,935 |
8,124 |
1,278 |
24,718 |
7,885 |
1,241 |
Allowance for doubtful accounts |
1,234,511 |
3,035,808 |
477,659 |
(210,564) |
1,377,155 |
216,684 |
Provision for loss in inventory and work in
process |
3,322,384 |
(2,393,289) |
(376,564) |
(931,114) |
(1,070,152) |
(168,379) |
Compensation expenses |
901,508 |
1,637,076 |
257,580 |
300,901 |
369,582 |
58,151 |
Deferred income taxes |
(827,921) |
(29,876) |
(4,701) |
477,562 |
478,127 |
75,229 |
Foreign exchange loss |
6,276 |
(130,743) |
(20,571) |
(195) |
(189,786) |
(29,861) |
Other noncash expense |
891,945 |
3,042,653 |
478,736 |
891,945 |
3,042,653 |
478,736 |
Changes in assets and liabilities: |
|
|
|
|
|
|
Trade receivables |
(882,236) |
2,364,987 |
372,111 |
(3,698,958) |
(12,211) |
(1,921) |
Refundable value added tax |
(2,583,766) |
3,587,113 |
564,402 |
(2,278,099) |
(645,016) |
(101,488) |
Advances to employees |
(89,589) |
120,897 |
19,022 |
130,631 |
200,570 |
31,558 |
Advances to suppliers |
(30,667) |
-- |
-- |
380,552 |
350,434 |
55,138 |
Other receivables |
111,005 |
609,013 |
95,823 |
153,053 |
780,106 |
122,743 |
Prepaid expenses |
(414,231) |
(24,819) |
(3,905) |
(718,028) |
802,797 |
126,313 |
Inventory and work in process |
(24,390,379) |
(27,288,122) |
(4,293,557) |
(6,483,221) |
(6,877,439) |
(1,082,107) |
Trade payables |
(4,088,019) |
(674,108) |
(106,065) |
(1,014,328) |
(1,345,174) |
(211,652) |
Other payables |
459,164 |
(4,381,488) |
(689,390) |
5,008,943 |
676,724 |
106,477 |
Accrued expenses |
(14,389,034) |
(16,835,656) |
(2,648,948) |
(1,985,044) |
(3,333,005) |
(524,420) |
Taxes payable |
(10,173,713) |
(7,102,555) |
(1,117,527) |
(1,997,338) |
(1,369,183) |
(215,429) |
Advances from customers |
41,054,969 |
26,764,691 |
4,211,197 |
32,148,853 |
17,678,739 |
2,781,600 |
Net cash provided by (used in)
operating activities |
(17,008,868) |
(26,008,936) |
(4,092,288) |
19,763,671 |
10,312,923 |
1,622,654 |
|
|
|
|
|
|
|
Cash flows from investing
activities: |
|
|
|
|
|
|
Purchases of property and equipment |
(1,544,660) |
(2,099,897) |
(330,401) |
(667,106) |
(761,610) |
(119,833) |
Payments for intangible assets |
(11,414,104) |
(7,438,759) |
(1,170,427) |
(2,458,874) |
(2,593,302) |
(408,034) |
Cash received from disposal of property and
equipment |
3,300 |
(206) |
(32) |
-- |
(256) |
(40) |
Net cash used in investing
activities |
(12,955,464) |
(9,538,862) |
(1,500,860) |
(3,125,980) |
(3,355,168) |
(527,907) |
|
|
|
|
|
|
|
Cash flows from financing
activities: |
|
|
|
|
|
|
Proceeds from short-term loans |
3,000,000 |
(692,003) |
(108,881) |
3,000,000 |
(3,000,000) |
(472,025) |
Proceeds from exercise of options by
employees |
55,805 |
178,880 |
28,145 |
-- |
-- |
-- |
Issurance of ordinary shares |
-- |
19,750,212 |
3,107,529 |
-- |
-- |
-- |
Net cash provided by (used in)
financing activities |
3,055,805 |
19,237,089 |
3,026,793 |
3,000,000 |
(3,000,000) |
(472,025) |
|
|
|
|
|
|
|
Effect of exchange rate changes on
cash and cash equivalents |
(6,276) |
130,743 |
20,571 |
195 |
189,786 |
29,861 |
|
|
|
|
|
|
|
Net increase (decrease) in cash
and cash equivalents |
(26,914,803) |
(16,179,966) |
(2,545,784) |
19,637,886 |
4,147,541 |
652,581 |
|
|
|
|
|
|
|
Cash and cash equivalents at
beginning of period |
62,620,652 |
64,558,916 |
10,157,800 |
16,067,963 |
44,231,409 |
6,959,439 |
Cash and cash equivalents at end of
period |
35,705,849 |
48,378,950 |
7,612,019 |
35,705,849 |
48,378,950 |
7,612,019 |
|
|
|
|
|
|
|
Supplemental cash flow
information |
|
|
|
|
|
|
Interest paid |
25,025 |
690,008 |
108,567 |
25,025 |
228,380 |
35,934 |
Income tax paid |
3,736,424 |
3,042,230 |
478,669 |
-- |
-- |
-- |
|
|
|
|
|
|
|
CONTACT: Investor Contact:
Troe Wen, Company Secretary
eFuture Information Technology Inc.
+86 10 50916128
ir@e-future.com.cn
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