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Recon Reports Third Quarter 2012 Financial Results

Stocks in this article: RCON

BEIJING, May 14, 2012 /PRNewswire-Asia-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 announced its financial results for the third fiscal quarter ended March 31, 2012.

Third Quarter 2012 Highlights

  • Total revenues in the three months ended March 31, 2012 increased significantly to RMB13.02 million ( $2.06 million) from RMB8.76 million in the three months ended March 31, 2011. New clients contributed to most of the increase. Total revenues in the nine months ended March 31, 2012 decreased to RMB48.81 million ( $7.72 million) from RMB62.74 million in the nine months ended March 31, 2011, mainly due to the deconsolidation of one variable interest entity ("VIE") in 2010.
  • Gross profit for the three months ended March 31, 2012 increased 332.69% to RMB6.23 million ( $0.99 million) from RMB1.44 million in the same period of 2011. This increase was mainly due to higher margin of our new products based on horizontal well fracturing technology.
  • Net income attributable to ordinary shareholders for the third quarter of fiscal year 2012 was RMB119,000 ($19,000), compared to a net loss attributable to ordinary shareholders of RMB2.01 million in the same quarter last year. Net loss attributable to ordinary shareholders improved from RMB21.85 million for the nine months ended March 31, 2011 to RMB1.89 million ( $0.3 million) for the nine months ended March 31, 2012.
  • Adjusted EBITDA was RMB989,000 ($156,000) for the three months ended March 31, 2012, up 142.78% compared to a loss of RMB2.31 million in the same quarter in 2011. Adjusted EBITDA was RMB320,000 ($51,000) for the nine months ended March 31, 2012, an increase of 103.32% compared to a loss of RMB9.65 million in the same period last year.
  • Diluted net income per share was RMB0.03 ($0.00) for the three months ended March 31, 2012 and diluted net loss per share was RMB0.48 ($0.08) for the nine months ended March 31, 2012, compared to diluted net loss per share of RMB0.51 and RMB5.53 for the three- and nine-month periods ended March 31, 2011.

"We believe that Recon should act as a professional integrator of products and services, rather than simply acting as an equipment supplier," said Mr. Yin Shenping, CEO of Recon, "To achieve this goal, we have dedicated time and resources to optimize our operations and to improve our business model. Recently, we have mainly focused on introducing the most suitable products and technologies from the U.S. and Canada to domestic oilfield companies. We have made tremendous progress in this aspect by cooperating with international industry leaders such as Emerson and Baker Hughes. There are also many smaller foreign companies that possess expertise in one product in certain segmented areas of the oilfield service industry. We are actively seeking opportunities to cooperate with these companies as well."

Mr. Yin continued, "We have also devoted substantial resources to R&D as part of our long term strategy. Through such investment, we have combined our years of experience with advanced technologies to provide the best solutions to our clients. These efforts promote our competitiveness and encourage long-term profitability. We believe our business will remain strong in the coming years."

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