BEIJING, Feb. 20, 2012 /PRNewswire-Asia-FirstCall/ --
Q2 Financial Highlights
- Quarterly revenues of $80.3 million, representing an increase of 8.0% compared to $74.4 million year-over-year.
- Gross margin at 38.5%, as compared to 36.0% year-over-year, and 37.8% quarter-over-quarter
- Non-GAAP net income attributable to Hollysys of $20.4 million, as compared to $15.0 million and a 36.4% increase year-over-year.
- Non-GAAP Diluted EPS at $0.37 reported for the quarter, as compared to $0.27 year-over-year
- Record-high backlog of $332.1 million as of December 31, 2011, a 15.1% increase compared to $288.5 million year-over-year, and 10.7% increase compared to $300.1 million quarter-over-quarter.
- Inventory turn-over days of 54 days for this quarter compared to 60 days year-over-year.
- Generate record-breaking net cash provided by operating activities of $57.8 million for this quarter.
Hollysys Automation Technologies, Ltd. (NASDAQ: HOLI) ("Hollysys" or the "Company"), a leading provider of automation and control technologies and applications in China, today announced its unaudited financial results for the fiscal year 2012 second quarter ended December 31, 2011 (see attached tables).
Dr. Changli Wang, Chairman and CEO of Hollysys, stated: "We are very pleased to report another quarter with solid financial and operational performance amid the unfavorable external economic conditions and feel excited about our achievements and breakthroughs in several sectors. Here I would like to take this opportunity to discuss some key events that took place in this quarter:
"Industrial automation business continues its strong growth momentum thanks to our strategy change of total solution proposition and sales force and sales network expansion. We are pleased that we won 6x660MW ultra-supercritical thermal power generating units in aggregate in 2011 in high-end thermal power automation and control market which has been pretty much dominated by multi-national corporations. We will continue to leverage on our proprietary technology and total solution approach to further penetrate into high-end segments of industrial automation and consolidate low-end to mid-end market through expanded sales and service network across the country.
"In our high-speed rail segment, we delivered satisfying financial results despite a mixed high-speed rail environment in China for this quarter, which demonstrates the strength and breadth of our high-speed rail business.We signed a contract of approximately $4.2 million to supply our 200-250km/h high-speed rail ATP equipment to Ministry of Railways of China ("MOR") while the new contract tender of China's high-speed rail was considered to be quiet at the time. Given the intense demand for high-speed rail build-out with China's large population transportation demand and limited land use resources together with approximately 15,000 km of high-speed rail tracks currently in construction in China which will require signaling system to be installed prior to commercial operation, we believe there is a huge market potential in high-speed rail signaling market for leading players like Hollysys to realize and capture. Besides, we have obtained European Safety Standard Certification Level 4 (SIL 4) for our proprietary signaling products, including Automatic Train Protection (ATP), Balise Transmission Module (BTM), Line-side Electronic Unit (LEU), Temporary Train Control System (TSRS), Vital Computer platform (HVC), Train Control Center (TCC) and interlocking system. With the whole product suite of our proprietary high-speed rail signaling systems development completed and received European Safety Standard certification, Hollysys is poised to explore the vast international railway market and achieve fruitful results to further create value for our shareholders.
"In our subway business segment, we're excitedfrom winning the competitive bid to supply our Main Control System (MCS) to Hong Kong MTR Corporation for the Hong Kong Section of the Guangzhou-Shenzhen-Hong Kong Express Rail Link (XRL) valued at approximately HK $65.6 million (approximately USD $8.4 million). This is the first international bid of our proprietary SCADA system with the MTR Corporation against other multinational companies, which is a strong validation of our proprietary technology and implementation capabilities and a remarkable milestone of distributing our footprint in the international subway arena. As we have achieved the breakthrough of international market and have laid a solid technology foundation and accumulated in-depth implementation knowledge and experiences, we are expecting more international contracts in pipeline. In addition to the Hong Kong MTR contract, we are also excitedfrom the contract win with Beijing Metro Construction and Administration Corporation to supply the integrated surveillance control and data acquisition system (SCADA) to Beijing Subway Line 14 at $18.8 million. We attribute this important record to our numerous successful applications, advanced technology and strong implementation capability, which has been able to stay ahead of our competition while developing along with the industry.
"We are also very pleased to see the smooth integration with our wholly owned subsidiary Concord Corporation Pte. Ltd ("Concord"). In this quarter, Concord successfully signed a contract with Sendan International Co., Ltd to provide electrical, instrumentation and control installation works for Rabigh Power Plant IIin Rabigh, Saudi Arabia at approximately $16.90 million. This is the first sizable contract win by Concord after the acquisition and we are glad to see that Concord is continuously winning new businesses, while its integration into Hollysys has been well underway in both new products development and business development. We believe the combination of Concord's customer base and industry know-how with Hollysys' proprietary technology and products will pave our way to a broader market space of rail and industrial automation sectors in Southeast Asia and the Middle East.
"Another major event took place in this quarter is that we announced CFO Departure and appointment of CFO's Replacement. We sincerely appreciate our former CFO, Mr. Peter Li for his contributions as Hollysys CFO and extend our best wishes to his new endeavors. Meanwhile, we are very pleased to see Ms. Herriet Qu, Financial Controller, is internally promoted to Chief Financial Officer of Hollysys overseeing the overall corporate financial management, who has been with the Company for more than four years with MBA degree from Oklahoma City University. After this smooth transition of CFO, together with the appointment of corporate senior executives COO, Mr. Jianfeng He, and Senior VP Business Development, Mr.Baiqing Shao, our senior management team will remain our strategic vision and continuously devote ourselves into Hollysys' future development and growth, to better serve our clients and shareholders' best interests."
The Second Quarter ended December 2011 Unaudited Financial Results Summary
To facilitate a clear understanding of Hollysys operational result, a summary of unaudited non-GAAP financial results is shown as below:
In USD thousands, except share numbers and EPS | ||||||||
Three months ended | Six months ended | |||||||
December 31, 2011 | December 31, 2010 | % | December 31, 2011 | December 31, 2010 | % | |||
Revenues | $ | 80,288 | 74,371 | 8.0% | 167,452 | 135,214 | 23.8% | |
Integrated Contract Revenue | $ | 75,902 | 71,198 | 6.6% | 159,384 | 128,572 | 24.0% | |
Products Sales | $ | 4,386 | 3,173 | 38.2% | 8,069 | 6,642 | 21.5% | |
Cost of Revenues | $ | 49,412 | 47,595 | 3.8% | 103,629 | 87,257 | 18.8% | |
Gross Profit | $ | 30,877 | 26,776 | 15.3% | 63,824 | 47,956 | 33.1% | |
Total Operating Expenses | $ | 8,871 | 11,358 | (21.9)% | 26,385 | 21,043 | 25.4% | |
Selling | $ | 8,060 | 5,384 | 49.7% | 15,042 | 8,954 | 68.0% | |
General and Administrative | $ | 7,385 | 4,713 | 56.7% | 12,243 | 8,485 | 44.3% | |
Research and Development | $ | 6,881 | 6,448 | 6.7% | 12,950 | 10,774 | 20.2% | |
VAT refunds and government subsidy | $ | (13,456) | (5,187) | 159.4% | (13,851) | (7,171) | 93.2% | |
Income from operations | $ | 22,007 | 15,418 | 42.7% | 37,439 | 26,913 | 39.1% | |
Other income (expense), net | $ | 74 | (595) | (112.5)% | 262 | 875 | (70.0)% | |
Gains (Losses) on disposal of long term investment | $ | (3) | 66 | (104.6)% | (3) | 1,428 | (100.2)% | |
Share of net income of equity investees | $ | 207 | 2,238 | (90.8)% | 152 | 526 | (71.1)% | |
Interest expense, net | $ | (441) | (445) | (0.9)% | (1,162) | (720) | 61.3% | |
Income tax Expenses | $ | 1,334 | 1,700 | (21.5)% | 3,201 | 3,643 | (12.1)% | |
Non-GAAP net income (loss) attributable to non-controlling interest | $ | 82 | 4 | 2143.0% | 223 | 12 | 1814.0% | |
Non-GAAP net income attributable to Hollysys Automation Technologies Ltd. | $ | 20,428 | 14,978 | 36.4% | 33,265 | 25,367 | 31.1% | |
Basic Non-GAAP EPS | $ | 0.37 | 0.28 | 33.3% | 0.60 | 0.47 | 29.0% | |
Diluted Non-GAAP EPS | $ | 0.37 | 0.27 | 34.1% | 0.60 | 0.46 | 29.5% | |
Stock-based Compensation Cost | $ | 157 | 131 | 20.1% | 315 | 262 | 20.1% | |
Net income attributable to Hollysys Automation Technologies Ltd.(GAAP) | $ | 20,271 | 14,847 | 36.5% | 32,950 | 25,105 | 31.3% | |
Basic GAAP EPS | $ | 0.36 | 0.27 | 33.5% | 0.60 | 0.46 | 29.1% | |
Diluted GAAP EPS | $ | 0.36 | 0.27 | 34.3% | 0.59 | 0.46 | 29.6% | |
Basic Weighted Average Common Shares Outstanding | 55,703,338 | 54,449,129 | 2.3% | 55,356,413 | 54,449,564 | 1.7% | ||
Diluted Weighted Average Common Shares Outstanding | 55,852,982 | 54,936,098 | 1.7% | 55,592,152 | 54,895,992 | 1.3% | ||
Operational Results Analysis for the Second quarter ended December 31, 2011
For the three months ended December 31, 2011, total revenues increased by 8.0% to $80.3 million, from $74.4 million in the prior fiscal year period.Among total revenues, revenue from integrated contracts increased by 6.6% to $75.9 million, as compared to $71.2 million for the same period of the prior year. The Company's integrated contract revenue by segment was shown as following:
(In USD million) | ||||||||||||
Three months ended December 31, | Six months ended December 31, | |||||||||||
2011 | 2010 | 2011 | 2010 | |||||||||
$ | % to Total Revenue | $ | % to Total Revenue | $ | % to Total Revenue | $ | % to Total Revenue | |||||
Industrial Automation | 44.5 | 58.6% | 35.5 | 50.3% | 97.5 | 61.2% | 67.7 | 52.9% | ||||
Rail Transportation | 24.3 | 32.0% | 35.1 | 49.7% | 49.7 | 31.2% | 60.4 | 47.1% | ||||
Overseas | 7.1 | 9.4% | - | - | 12.2 | 7.6% | - | - | ||||
Total | 75.9 | 100.0% | 70.6 | 100.0% | 159.4 | 100.0% | 128.1 | 100.0% | ||||
The industrial automation revenue of $44.5 million for the three months ended December 31, 2011 is consisted of industrial automation revenue of $41.5 million and nuclear revenue of $3.0 million in previous break-down categories. And the rail transportation revenue of $24.3 million for the three months ended December 31, 2011 is consisted of high-speed rail revenue of $17.5 million and subway automation revenue of $6.8 million.
As a percentage of total revenues, overall gross margin was 38.5% for the three months ended December 31, 2011, as compared to 36.0% for the same period of last year. The gross margin for integrated contracts and product sales were 36.4% and 73.4% for the three months ended December 31, 2011, as compared to 35.7% and 42.1% for the same period of last year respectively. The gross margin increase was mainly due to a few higher margin projects and portion of projects of high-speed rail being recognized in the quarter.
For the three months ended December 31, 2011, selling expenses were $8.1 million, compared to $7.0 million quarter-over-quarter, and $5.4 million year-over-year. The increase was mainly due to the Company's expanded sales network and increased selling staffs. As a percentage of total revenues, selling expenses were 10.0% compared to 8.0% quarter-over-quarter, and 7.2% year-over-year.
General and administrative expenses, excluding non-cash stock-based compensation expense, were $7.4 million for the quarter ended December 31, 2011, representing an increase of $2.7 million, or 56.7%, as compared to $4.7 million for the same period of prior year. The increase was mainly consisted of an increase of $1.9 million contributed by the newly acquired or set-up subsidiaries, and an increase of $0.5 million in allowance for doubtful accounts. As a percentage of total revenues, G&A expenses were 9.2% and 6.3% for the three months ended December 31, 2011 and 2010, respectively. Including the non-cash stock compensation cost recorded on a GAAP basis, G&A expenses were $7.5 million and $4.8 million for three months ended December 31, 2011 and 2010, respectively.
Research and development expenses were $6.8 million for the three months ended December 31, 2011, compared to $6.4 million for the same period of last year. As a percentage of total revenue, R&D expenses were 8.6% and 8.7% for three months ended December 31, 2011 and 2010, respectively.
The VAT refunds and government subsidy amounted to $13.5 million for three months ended December 31, 2011, as compared to $5.2 million for the comparative prior year period, representing an increase of $8.3 million, or 159.4%. According to the accounting policy, the Company only recognizes the VAT refunds upon the completion of the government approval process. In this quarter, the PRC government approved and granted total VAT refunds of $11.8 million to the Company, of which $5.3 million was related to sales during January to June 2011, and the remaining $6.5 million was related to sales during July to December 2011.
Income tax expenses were $1.3 million for the three months ended December 31, 2011, compared to $1.7 million for the prior year period. The effective tax rate was 6.2% and 10.3% for the quarter ended December 31, 2011, and 2010, respectively. The low rate for this quarter is mainly due to the large sum of VAT refunds recognized, which was a non-taxable income.
For the three months ended December 31, 2011, the non-GAAP net income to Hollysys excluding non-cash stock compensation cost was $20.4 million or $0.37 per diluted share based on 55 million shares outstanding. This represents an increase of $5.4 million, or 36.4%, over the $15.0 million, or $0.27 per share based on 54 million shares outstanding, reported in the prior year period. On a GAAP basis, net income attributable to Hollysys was $20.3 million, or $0.36 per diluted share representing an increase of $0.09, or 33.3%, over the $14.9 million, or $0.27 per share reported in the prior year period.
Backlog Highlights
Hollysys' backlog as of December 31, 2011 was $332.1 million, compared to $300.1 million on September 30, 2011, and $288.5 million on December 31, 2010. The detailed breakdown of the backlog by segment is as followings:
(In USD million) | |||||||||||||
Quarter-over-Quarter Analysis | Year-over-Year Analysis | ||||||||||||
2011-12-31 | 2011-9-30 | 2010-12-31 | |||||||||||
$ | % to Total Backlog | $ | % to Total Backlog | % | $ | % to Total Backlog | % | ||||||
Industrial Automation | 124.4 | 37.5% | 128.7 | 42.9% | (3.4%) | 95.2 | 33.0% | 30.6% | |||||
Rail Transportation | 170.4 | 51.3% | 157.2 | 52.4% | 8.4% | 193.3 | 67.0% | (11.8%) | |||||
Overseas | 37.3 | 11.2% | 14.2 | 4.7% | 162.4% | - | - | - | |||||
Total | 332.1 | 100.0% | 300.1 | 100.0% | 10.7% | 288.5 | 100.0% | 15.1% | |||||
Cash Flow Highlights
The net cash provided by operating activities was $57.8 million for the three months ended December 31, 2011, achieving the historic highest, mainly due to accounts receivable collection of $37.2 million and VAT refunds of $11.8 million received in this quarter. Including investing and financing activities, the total net cash inflow for this quarter was $54.4 million, mainly due to a cash outflow of $6.9 million for repayment of short-term loans and a cash inflow of $4.4 million for advance receipt of disposal of 10% equity interests in Beijing Techenergy.
Balance Sheet Highlights
As of December 31, 2011, Hollysys' cash and cash equivalents were $130.0 million, compared to $75.5 million on September 31, 2011. For the three months ended December 31, 2011, Days Sales Outstanding ("DSO") is 150 days, as compared to 104 days year-over-year and 138 days quarter-over-quarter; and inventory turnover was 54 days, as compared to 60 year-over-year and 51 days quarter-over-quarter.
Outlook for FY 2012
Dr. Wang concluded, "Given our strong backlog currently on-hand and sales pipeline, we are reiterating our annual guideline of revenue in the range between $354 million and $356 million and non-GAAP net income in the range between $57 million and $58 million on consolidated basis."
Conference Call
Management will discuss the current status of the Company's operations during a conference call at 8:30 AM ET/9:30 PM Beijing time on Tuesday, February 21, 2012. Interested parties may participate in the call by dialing the following numbers approximately 10 minutes before the call is scheduled to begin and ask to be connected to the Hollysys Automation Technologies conference call. The conference call identification number is 48678090.
1-866-519-4004 (USA)
800-930-346 (HK)
+852-2475-0994 (HK)
800-819-0121 (China Landline)
400-620-8038 (China Mobile)
+65-6723-9381 (International)
In addition, a recorded replay of the conference call will be accessible within 24 hours via Hollysys' website at:
http://www.hollysys.com.sg/home/index.php/investor-relations/events-a-webcast
About Hollysys Automation Technologies, Ltd.
Hollysys Automation Technologies is a leading provider of automation and control technologies and applications in China that enables its diversified industry and utility customers to improve operating safety, reliability, and efficiency. Founded in 1993, Hollysys has approximately 3,500 employees with nationwide presence in over 40 cities in China, with subsidiaries and offices in Singapore, Malaysia, Dubai, India, and serves over 2000 customers in the industrial, railway, subway & nuclear industries in China, south-east Asia, and the middle east. Its proprietary technologies are applied in its industrial automation solution suite including Distributed Control System (DCS), Programmable Logic Controller (PLC), RMIS, HAMS, OTS, and other products, high-speed railway signaling system of Train Control Center(TCC) and Automatic Train Protection (ATP), and other products, subway supervisory and control platform (SCADA), and nuclear conventional island automation and control systeM.
Safe Harbour
This release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical fact included herein are "forward-looking statements," including statements regarding: the ability of the Company to achieve its commercial objectives; the business strategy, plans and objectives of the Company and its subsidiaries; and any other statements of non-historical information. These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Such forward-looking statements, based upon the current beliefs and expectations of Hollysys' management, are subject to risks and uncertainties, which could cause actual results to differ from the forward looking statements. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company's reports that are filed with the Securities and Exchange Commission and available on its website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
For further information, please contact:
Hollysys Automation Technologies, Ltd.
www.hollysys.com
+8610-58981386
+8610-58981326
investors@hollysys.com
HOLLYSYS AUTOMATION TECHNOLOGIES LTD. | ||||||||
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME | ||||||||
(In US Dollars) | ||||||||
Three months ended | Six months ended | |||||||
2011 | 2010 | 2011 | 2010 | |||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | |||||
Revenues | ||||||||
Integrated contract revenue | $ | 75,901,956 | $ | 71,197,708 | $ | 159,383,839 | $ | 128,571,746 |
Products sales | 4,386,448 | 3,173,063 | 8,068,638 | 6,641,867 | ||||
Total revenues | 80,288,404 | 74,370,771 | 167,452,477 | 135,213,613 | ||||
Cost of integrated contracts | 48,243,403 | 45,758,899 | 101,149,057 | 83,881,846 | ||||
Cost of products sold | 1,168,308 | 1,836,224 | 2,479,579 | 3,375,286 | ||||
Gross profit | 30,876,693 | 26,775,648 | 63,823,841 | 47,956,481 | ||||
Operating expenses | ||||||||
Selling | 8,059,951 | 5,383,553 | 15,041,782 | 8,954,422 | ||||
General and administrative | 7,542,441 | 4,844,166 | 12,557,924 | 8,747,305 | ||||
Research and development | 6,880,941 | 6,447,952 | 12,950,410 | 10,773,839 | ||||
VAT refunds and government subsidies | (13,456,043) | (5,186,791) | (13,850,534) | (7,170,506) | ||||
Total operating expenses | 9,027,290 | 11,488,880 | 26,699,582 | 21,305,060 | ||||
Income from operations | 21,849,403 | 15,286,768 | 37,124,259 | 26,651,421 | ||||
Other income(expense), net | 74,470 | (595,396) | 262,396 | 874,729 | ||||
Gains (Losses) on disposal of long term investment | (3,027) | 65,927 | (3,027) | 1,427,541 | ||||
Share of net income of equity investees | 206,872 | 2,237,943 | 151,697 | 525,786 | ||||
Interest expense, net | (440,760) | (444,655) | (1,161,899) | (720,470) | ||||
Income before income taxes | 21,686,958 | 16,550,587 | 36,373,426 | 28,759,007 | ||||
Income taxes expenses | 1,334,468 | 1,699,844 | 3,200,648 | 3,642,848 | ||||
Net income | 20,352,490 | 14,850,743 | 33,172,778 | 25,116,159 | ||||
Less: Net income (loss) attributable to non-controlling interests | 81,938 | 3,653 | 222,868 | 11,644 | ||||
Net income attributable to Hollysys Automation Technologies Ltd. | $ | 20,270,552 | $ | 14,847,090 | $ | 32,949,910 | $ | 25,104,515 |
Weighted average number of common shares | 55,703,338 | 54,449,129 | 55,356,413 | 54,449,564 | ||||
Weighted average number of diluted common shares | 55,852,982 | 54,936,098 | 55,592,152 | 54,895,992 | ||||
Basic earnings per share attributable to Hollysys Automation Technologies Ltd. | 0.36 | 0.27 | 0.60 | 0.46 | ||||
Diluted earnings per share attributable to Hollysys Automation Technologies Ltd. | 0.36 | 0.27 | 0.59 | 0.46 | ||||
Other comprehensive income | ||||||||
Net income | 20,352,490 | 14,850,743 | 33,172,778 | 25,116,159 | ||||
Translation adjustments | 1,714,300 | 2,422,268 | 5,653,872 | 5,432,221 | ||||
Comprehensive income | 22,066,790 | 17,273,011 | 38,826,650 | 30,548,380 | ||||
Less: Comprehensive income attributable to non-controlling interest | 90,814 | 13,627 | 248,865 | 32,740 | ||||
Comprehensive income attributable to Hollysys Automation Technologies Ltd. | $ | 21,975,976 | $ | 17,259,384 | $ | 38,577,785 | $ | 30,515,640 |
HOLLYSYS AUTOMATION TECHNOLOGIES LTD. | ||||||||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||||||||
(In US Dollars) | ||||||||||||||
December 31, | September 30, | |||||||||||||
|
| 2011 | 2011 | ||||||||||||
(Unaudited) | (Unaudited) | |||||||||||||
ASSETS | ||||||||||||||
Current Assets | ||||||||||||||
Cash and cash equivalents | $ | 129,918,106 | $ | 75,481,686 | ||||||||||
Contract commitment deposit in banks | 2,698,087 | 5,181,347 | ||||||||||||
Accounts receivable, net of allowance for doubtful accounts of $12,947,639 and $11,807,986 | 101,591,729 | 141,702,792 | ||||||||||||
Cost and estimated earnings in excess of billings, net of allowance for doubtful accounts of $1,467,630 and $1,245,195 | 94,160,656 | 91,083,222 | ||||||||||||
Other receivables, net of allowance for doubtful accounts of $335,697 and $287,941 | 9,813,354 | 10,142,615 | ||||||||||||
Advances to suppliers | 6,715,126 | 8,909,293 | ||||||||||||
Amounts due from related parties | 15,755,057 | 12,328,919 | ||||||||||||
Inventories, net of provision of $2,542,564 and $1,878,520 | 26,606,991 | 28,648,382 | ||||||||||||
Prepaid expenses | 1,050,170 | 827,102 | ||||||||||||
Income tax recoverable | 572,804 | - | ||||||||||||
Deferred tax assets | 2,281,798 | 2,230,438 | ||||||||||||
Assets held for sale | - | 9,109,996 | ||||||||||||
Total current assets | 391,163,878 | 385,645,792 | ||||||||||||
Property, plant and equipment, net | 69,628,760 | 60,127,428 | ||||||||||||
Long term investments | 17,548,814 | 18,602,786 | ||||||||||||
Goodwill | 29,875,776 | 30,653,451 | ||||||||||||
Deferred tax assets | 1,196,892 | 1,592,503 | ||||||||||||
Total assets | 509,414,120 | 496,621,960 | ||||||||||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||||||||
Current liabilities | ||||||||||||||
Short-term bank loans | 5,329,291 | 11,763,847 | ||||||||||||
Current portion of long-term bank loans | 7,935,374 | 6,687,753 | ||||||||||||
Accounts payable | 70,671,271 | 73,521,893 | ||||||||||||
Construction cost payable | 926,721 | 1,766,133 | ||||||||||||
Deferred revenue | 34,668,157 | 40,759,978 | ||||||||||||
Accrued payroll and related expense | 10,149,946 | 8,335,960 | ||||||||||||
Income tax payable | 4,537,854 | 4,171,832 | ||||||||||||
Warranty liabilities | 3,040,047 | 3,053,148 | ||||||||||||
Other tax payables | 11,086,248 | 12,870,295 | ||||||||||||
Accrued liabilities | 10,029,391 | 8,201,316 | ||||||||||||
Amounts due to related parties | 3,476,228 | 3,291,229 | ||||||||||||
Advance receipt of disposal of equity interests in an equity investee | 4,412,068 | - | ||||||||||||
Total current liabilities | 166,262,596 | 174,423,384 | ||||||||||||
Long-term bank loans | 28,716,050 | 30,291,586 | ||||||||||||
Total liabilities | 194,978,646 | 204,714,970 | ||||||||||||
Commitments and contingencies | - | - | ||||||||||||
Equity | ||||||||||||||
Common stock, par value $0.001 per share, 100,000,000 shares authorized, 55,834,782 and 55,698,917 shares issued and outstanding | 55,835 | 55,700 | ||||||||||||
Additional paid-in capital | 150,112,992 | 149,651,434 | ||||||||||||
Appropriated earnings | 23,090,978 | 23,061,780 | ||||||||||||
Retained earnings | 107,662,499 | 87,421,146 | ||||||||||||
Accumulated comprehensive income - translation adjustments | 32,453,687 | 30,748,261 | ||||||||||||
Total Hollysys Automation Technologies Ltd. stockholder's equity | 313,375,991 | 290,938,321 | ||||||||||||
Non-controlling interests | 1,059,483 | 968,669 | ||||||||||||
Total equity | 314,435,474 | 291,906,990 | ||||||||||||
Total liabilities and equity | $ | 509,414,120 | $ | 496,621,960 | ||||||||||
HOLLYSYS AUTOMATION TECHNOLOGIES LTD. | ||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||
(In US Dollars) | ||||||
Three months ended | Six months ended | |||||
(Unaudited) | (Unaudited) | |||||
Cash flows from operating activities: | ||||||
Net income | $ | 20,352,490 | $ | 33,172,778 | ||
Adjustments to reconcile net income to net cash | ||||||
provided by (used in) operating activities: | ||||||
Depreciation and amortization | 1,698,141 | 3,080,225 | ||||
Allowance for doubtful accounts | 1,299,127 | 2,290,014 | ||||
Provision for inventories | 648,874 | 757,290 | ||||
Losses on disposal of property, plant and equipment | 39,616 | 39,633 | ||||
Losses on disposal of long-term investments | 3,027 | 3,027 | ||||
Share of net gains from equity investees | (206,872) | (151,697) | ||||
Stock-based compensation | 157,356 | 314,712 | ||||
Deferred tax assets (liabilities), net | 370,493 | (393,451) | ||||
Changes in operating assets and liabilities: | ||||||
Accounts receivable | 37,237,477 | 4,155,982 | ||||
Cost and estimated earnings in excess of billings | 349,123 | 12,769,178 | ||||
Inventories | 1,636,494 | 1,872,789 | ||||
Advance to suppliers | 2,262,263 | 1,774,071 | ||||
Other receivables | 775,796 | 1,700,525 | ||||
Deposits and other assets | 2,304,991 | 1,570,874 | ||||
Due from related parties | (1,707,697) | (1,637,582) | ||||
Accounts payable | (3,402,657) | 1,417,403 | ||||
Deferred revenue | (6,468,619) | (10,363,137) | ||||
Accruals and other payable | 2,380,000 | 6,764,655 | ||||
Due to related parties | 155,862 | 47,219 | ||||
Tax payable | (2,114,086) | (4,008,158) | ||||
Net cash provided by operating activities | 57,771,199 | 55,176,350 | ||||
Cash flows from investing activities: | ||||||
Purchase of property, plant and equipment | (1,216,399) | (2,089,211) | ||||
Proceeds from disposal of property, plant and equipment | 454,333 | 3,221,569 | ||||
Acquisition of a subsidiary, net of cash acquired | - | (5,410,486) | ||||
Advance receipt of disposal of equity interests in an equity investee | 4,360,237 | 4,360,237 | ||||
Net cash provided by investing activities | 3,598,171 | 82,109 | ||||
Cash flows from financing activities: | ||||||
Proceeds from short-term loans | 410,298 | 561,392 | ||||
Repayments of short-term loans | (6,870,137) | (6,996,395) | ||||
Repayments of long-term loans | (639,911) | (2,029,215) | ||||
Proceeds from exercise of share options | 304,338 | 304,338 | ||||
Dividend paid to ex-shareholders of a subsidiary | - | (8,224,328) | ||||
Net cash used in financing activities | (6,795,412) | (16,384,208) | ||||
Effect of foreign exchange rate changes | (137,538) | 374,796 | ||||
Net decrease in cash and cash equivalents | $ | 54,436,420 | $ | 39,249,047 | ||
Cash and cash equivalents, beginning of period | $ | 75,481,686 | $ | 90,669,059 | ||
Cash and cash equivalents, end of period | 129,918,106 | 129,918,106 | ||||
RECONCILE GAAP NET INCOME TO NON-GAAP NET INCOME | |||||||||
The following table provides more details on the reconciliations between GAAP financial measures that are most directly comparable to non-GAAP financial measures. | |||||||||
Three months ended | Six months ended | ||||||||
2011 | 2010 | 2011 | 2010 | ||||||
(Unaudited) | (Unaudited) | (Unaudited) | (Unaudited) | ||||||
Net income attributable to Hollysys Automation Technologies Ltd. | $ | 20,270,552 | $ | 14,847,090 | $ | 32,949,910 | 25,104,515 | ||
Adjustments: | |||||||||
Stock-based compensation cost | 157,356 | 131,019 | 314,712 | 262,038 | |||||
Non-Gaap Net Income attributable to Hollysys Automation Technologies Ltd. | $ | 20,427,908 | $ | 14,978,109 | $ | 33,264,622 | 25,366,553 | ||
SOURCE Hollysys Automation Technologies, Ltd.
