Recon Technology Announces Strong Revenue and Profit Gains as China Oil Services Business Rapidly Expands
February 11 2010 - 10:17AM
PR Newswire (US)
Six Months Revenue up 46% to $10.6M, Net Income up 47% to $1.9M
Conference Call Friday, February 12, 2010 at 10:00 AM ET BEIJING,
Feb. 11 /PRNewswire-Asia-FirstCall/ -- Recon Technology, Ltd.
(NASDAQ:RCON), a leading Chinese non-state-owned oil and gas
high-tech products and services provider, today reported financial
results for its FY '10 second quarter ended December 31, 2009. Q2
FY '10 Highlights -- Revenue for Q2 FY '10 increased 27% to $7.3
million from $5.8 million in Q2 FY '09 attributable to strong sales
of oil field furnaces, increasing demand of automation products and
high value-added oil-field services. -- Gross profit increased 44%
to $3.6 million for Q2 FY '10 from $2.5 million in Q2 FY '09. -- Q2
FY '10 gross margin increased to 49% from 43% in Q2 FY '09,
primarily due to Recon's focus on higher margins services such as
software and service solutions. -- Income from operations rose 34%
to $2.5 million compared with $1.9 million in Q2 FY '09. -- Net
income was $1.8 million, an increase of 31% over $1.4 million in Q2
FY '09. -- Earnings per diluted share were $0.45, compared to $0.62
per diluted share in Q2 FY '09, reflecting an increase in shares
issued associated with the company's 2009 IPO. -- Weighted average
number of diluted shares outstanding was 4.05 million, compared to
2.25 million in Q2 FY '09. First Six Months FY '10 Highlights --
Revenue was $10.6 million, an increase of 46% over $7.3 million for
the six months ended December 31, 2008. -- Gross profit increased
67% to $4.6 million vs. $2.7 million for the same period in 2008 --
Gross margin increased to 43% from 37% for the six months ended
December 31, 2008 -- Income from operations was $2.7 million, a
gain of 55% from $1.8 million for the same period in 2008 -- Net
income increased 47% to $1.9 million compared to $1.3million for
the first six months of FY '09. -- Earnings per diluted share were
$0.51 compared to $0.57 per diluted share for the first six months
of FY '09, reflecting an increase in shares issued associated with
the company's 2009 IPO. -- Weighted average number of diluted
shares outstanding was 3.70 million, compared to 2.25 million for
the six months ended December 31, 2008. Liquidity and Capital
Resources The company's cash balance on December 31, 2009 was
approximately $6.6 million. Recon had short-term debt of $829,000
and no long-term debt. Working capital was $15.9 million.
Stockholders' equity totaled $14.9 million. The current ratio was
2.78, up from 1.90 at June 30, 2009. Net cash provided in financing
activities totaled $8.7 million for the six months ended December
31, 2009, including payback of notes payable and proceeds from IPO
on July 30, 2009. Shenping Yin, Recon's Chief Executive Officer,
said, "We are happy to report sustained growth in our second fiscal
quarter. Our strong financial results reflect our ability to
optimize our product lines in expanding our business. We are
benefiting from robust demand from major oil companies for
high-tech solutions and new software systems. We believe that
operators of the Chinese oilfields have a growing need for new
computerized systems and production enhancing measures in maturing
oil and gas wells and thus have a strong ongoing need for our
proprietary technology." Conference Call Recon CEO Mr. Shenping Yin
and CFO Ms. Jia Liu will host a conference call at 10:00 AM Eastern
Time tomorrow on Friday February 12 (11:00 PM Beijing/Hong Kong
Time on February 12) to review the company's financial results and
respond to questions and comments. To participate, call U.S. Toll
Free Number 1-877-941-4775 approximately 10 minutes before the
call. International callers, please dial 1-480-629-9761. The
conference ID number is 4221464. An MP3 file will be available
after the call for 90 days via
http://www.hawkassociates.com/profile/rcon.cfm . About Recon
Technology, Ltd. Recon Technology, Ltd. has been providing leading
Chinese oil and gas companies with automation services that
increase efficiency and profitability in exploring, extracting,
producing, processing, refining and transporting petroleum products
for over 10 years. The company's proprietary computerized process
control system manages oil production in real-time to increase
extraction levels, reduce impurities in extracted petroleum and
lower production costs. In addition, as one of only two acoustic
system providers in the world, Recon's acoustic pipeline monitoring
system is widely used to prevent gas leakage in the transport
pipeline. Recon's technology is based on three software copyrights,
eight product patents and four pending patents. Recon Technology is
the first Chinese non-state-owned oil and gas service company to go
public in the U.S. More information may be found at
http://www.recon.cn/ or e-mail: . Recon's online investor kit,
including an investment profile, press releases, current price
quotes, stock charts and more is available at
http://www.hawkassociates.com/profile/rcon.cfm . To receive
notification of future releases via e-mail, subscribe at
http://www.hawkassociates.com/about/alert/ . 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. For more information, please
contact: Investor Contact: Hawk Associates Susan Zhou Tel:
+1-305-451-1888 Email: DATASOURCE: Recon Technology, Ltd. CONTACT:
Investor Contact: Susan Zhou, +1-305-451-1888, , of Hawk
Associates, for Recon Technology, Ltd. Web site:
http://www.hawkassociates.com/about/alert
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