Hollysys Automation Technologies Reports Unaudited Financial Results for Fiscal Year 2011 Second Quarter Ended December 31, 2010

PR Newswire
BEIJING
Feb 16, 2011

BEIJING, Feb. 16, 2011 /PRNewswire-Asia-FirstCall/ --

Financial Highlights

  • Record-breaking quarterly revenues of $74.4 million, representing an increase of 61.1% compared to $46.2 million year-over-year
  • Gross margin at 36.0%, as compared to 31.2% year-over-year, and 34.8% quarter-over-quarter
  • Non-GAAP net income attributable to Hollysys of $15.0 million, as compared to $8.1 million and a 85.4% increase year-over-year
  • Diluted EPS at $0.27 reported for the quarter
  • Record-breaking backlog balance at $288.5 million as of December 31, 2010, a 31.4% increase compared to $219.6 million year-over-year
  • Quarterly DSO of 104 days, as compared to 137 days year-over-year and 111 days quarter-over-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 its fiscal 2011 second quarter ended December 31, 2010 (see attached tables).

Dr. Changli Wang, Chairman and CEO of Hollysys, stated: "We are very pleased to report another stellar quarter with solid financial and operational performance. Our financials were significantly improved on a year-on-year basis, and our operational status and backlog continued its upward trend. I would like to discuss some of the key events that took place during this quarter."

"In this quarter, amid robust growth from all business lines, our high-speed rail business set another quarterly high from not only revenue but also backlog perspective. Specifically, I like to mention two of our significant contract wins in this quarter. Hollysys signed a $30.45 million 300-350km/h ATPs contract during the quarter, which will be installed on any type of 300-350km/h high-speed trains for any 300-350 km/h high-speed lines in China. This contract win is a testament that Hollysys will continue to play a leading role in China's 300-350km/h high-speed rail market, following our great success in 200-250km/h segment.

Also in this quarter, we signed another $33.63 million TCC contract to supply ground-based signaling system to Beijing-Shijiazhuang-Wuhan high-speed rail line with a designed traveling speed of 350km/h and 1,200km in total length. This line is the northern portion of Beijing-Guangzhou high speed rail line, one of the main arteries of China's national high-speed rail network. This significant contract win further strengthens our key position in China's high-speed rail signaling market.

Furthermore, Hollysys showcased its proprietary ATP and TCC products on the world stage at the 7th World Conference on High-speed Rail held in Beijing in December. As many countries in the world having already formulated high-speed rail build out plans, Hollysys will leverage on its expertise and technology accumulated in this round of China's high-speed rail build-out to enter international market."

Fiscal Year 2011 Second Quarter Unaudited Financial Results Summary

To facilitate a clear understanding of Hollysys operational results, 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, 2010

December
31, 2009

%
Change

 

December
31, 2010

December
31, 2009

%
Change

 
                   

Revenues

$

74,371

46,163

61.1%

$

135,214

84,357

60.3%

 

  Integrated Contract Revenue

$

71,198

43,970

61.9%

$

128,572

79,840

61.0%

 

  Products Sales

$

3,173

2,193

44.7%

$

6,642

4,516

47.1%

 

Cost of Revenues

$

47,595

31,770

49.8%

$

87,257

55,753

56.5%

 

Gross Profit

$

26,776

14,393

86.0%

$

47,956

28,603

67.7%

 

Total Operating Expenses

$

11,358

5,365

111.7%

$

21,043

11,229

87.4%

 

Selling

$

5,384

3,573

50.7%

$

8,954

6,299

42.2%

 

General and Administrative

$

4,713

4,014

17.4%

$

8,485

6,441

31.7%

 

   Research and Development

$

6,448

3,395

89.9%

$

10,774

6,249

72.4%

 

   VAT refunds and government subsidy

$

(5,187)

(5,618)

-7.7%

$

(7,171)

(7,760)

-7.6%

 

Income from Operations

$

15,418

9,028

70.8%

$

26,913

17,374

54.9%

 

Other income (expense), net

$

(595)

(104)

471.0%

$

(553)

45

-1333.9%

 

Gain on disposal of an equity investee

$

-

-

 

$

1,428

-

   

Share of net gains of equity investees

$

2,304

364

533.5%

$

1,953

600

225.6%

 

Interest expense, net

$

(445)

(243)

83.2%

$

(720)

(596)

21.0%

 

Income Tax Expenses

$

1,700

102

1569.7%

$

3,643

922

295.2%

 

Non-GAAP Net income attributable to non-controlling interest

$

4

864

-99.6%

$

12

1,794

-99.4%

 

Non-GAAP Net Income attributable to Hollysys Automation Technologies Ltd.

$

14,978

8,079

85.4%

$

25,367

14,707

72.5%

 

Basic Non-GAAP EPS

$

0.28

0.16

70.1%

$

0.47

0.29

58.2%

 

Diluted  Non-GAAP EPS

$

0.27

0.16

70.9%

$

0.46

0.29

58.6%

 
                   

Stock-based Compensation Cost for Options

$

131

131

-

$

262

262

-

 

Net income attributable to Hollysys Automation Technologies Ltd.(GAAP)

$

14,847

7,948

86.8%

$

25,105

14,445

73.8%

 

Basic GAAP EPS

$

0.27

0.16

71.3%

$

0.46

0.29

59.4%

 

Diluted GAAP EPS

$

0.27

0.16

72.2%

$

0.46

0.29

59.8%

 
                   

Basic Weighted Average Common Shares Outstanding

 

54,449,999

49,942,614

9.0%

 

54,449,564

49,942,614

9.0%

 

Diluted Weighted Average Common Shares Outstanding

 

54,936,098

50,653,381

8.5%

 

54,895,992

50,465,837

8.8%

 
                 

 

Operational Results Analysis for the three months ended December 31, 2010

For the three months ended December 31, 2010, total revenues increased by 61.1% to $74.4 million, from $46.2 million in the comparable prior fiscal year period.  Of the total revenues, revenue from integrated contracts increased by 61.9% to $71.2 million, compared to $44.0 million for the same period of the prior year.  The Company's integrated contract revenue by segment was as followings:

  • $34.4 million, or 48.3%, related to Industrial Automation & Control, representing a 16.3% segment revenue growth year-over-year;
  • Rail and Subway was $35.1 million, or 49.3%, representing a 229.2% increase year over year; of which $22.8 million, or 32.0%, was from Rail Signaling and Control projects, and $12.3 million, or 17.3%, was from Subway Automation and Control; and
  • $1.7 million, or 2.4%, related to Nuclear Plant Control projects and miscellaneous, compared to $3.7 million year-over-year.
 

As a percentage of total revenues, overall gross margin was 36.0% for the three months ended December 31, 2010, as compared to 31.2% for the same period of last year. The gross margin for integrated contracts and product sales were 35.7% and 42.1% for the three months ended December 31, 2010, as compared to 31.0% and 35.7% for the same period of last year respectively.

For the three months ended December 31, 2010, selling expenses were $5.4 million, compared to $3.6 million year over year, increased by $1.8 million, or 50.7%, which was mainly due to the Company's expanded sales network and increased selling staffs.  As a percentage of total revenues, selling expenses were 7.2% and 7.7% for the three months ended December 31, 2010 and 2009, respectively.

General and administrative expenses, excluding non-cash stock-based compensation expense, were $4.8 million for the quarter ended December 31, 2010, representing an increase of $0.7 million, or 16.9%, as compared to $4.1 million for the prior year period. As a percentage of total revenues, G&A expenses were 6.5% and 9.0% for the three months ended December 31, 2010 and 2009, respectively. Including the non-cash stock-based compensation cost of $131,019, general and administrative expenses were 5.0 million and 4.3 million for the quarter ended December 31, 2010 and 2009, respectively.

Research and development expenses were $6.4 million for the three months ended December 31, 2010, compared to $3.4 million for the same period of last year, increased by $3.0 million, or 89.9%, mainly due to the Company's increased R&D activities. As a percentage of total revenue, R&D expenses were 8.7% and 7.4% for three months ended December 31, 2010 and 2009, respectively.

The share of net gains from equity investees were $2.3 million for the three months ended December 31, 2010, of which, $2.1 million was from Beijing Techenergy Ltd., the 50/50 joint venture between Hollysys and China Guangdong Nuclear Power Corp., that mainly engages in providing automation and control products and services to China's nuclear industry.

The income tax expenses were $1.7 million the three months ended December 31, 2010, compared to $0.1 million for the prior year period. The effective tax rate was 10.3% and 1.1% for the three months ended December 31, 2010, and 2009, respectively. The large increase of tax expenses was mainly due to lower than normal tax expenses for the same period last year, caused by tax expense claw-back upon successful obtaining "High Technology Enterprise" tax certificate by our Hangzhou subsidiary, Hangzhou Hollysys Automation Co., Ltd.

For the three months ended December 31, 2010, the non-GAAP net income excluding non-cash stock compensation cost was $15.0 million or $0.27 per diluted share based on 55 million shares outstanding. This represents an increase of $6.9 million, or 85.4%, over the $8.1 million, or $0.16 per share based on 51 million shares outstanding, reported in the prior year period. On a GAAP basis, net income attributable to Hollysys was $14.8 million, or $0.27 per diluted share representing an increase of $6.9 million, or 86.8%, over the $7.9 million, or $0.16 per share reported in the prior year period.

Backlog Highlights

Hollysys' backlog as of December 31, 2010 was $288.5 million, compared to $255.3 million on September 30, 2010, and $219.6 million on December 31, 2009. The detailed breakdown of the backlog by segment is as followings:

(In USD million)

 
         

Quarter-over-Quarter Analysis

 

Year-over-Year Analysis

 
   

2010-12-31

 

2010-9-30

     

2009-12-31

     
   

$

% to
Total
Backlog

 

$

% to
Total
Backlog

 

%
Change

 

$

% to
Total
Backlog

 

%
Change

 

Industrial Automation & Control

 

81.6

28.3%

 

85.3

33.4%

 

-4.3%

 

53.0

24.1%

 

54.0%

 

Rail Automation & Control

 

112.3

38.9%

 

62.9

24.6%

 

78.6%

 

53.9

24.5%

 

108.4%

 

Subway Automation & Control

 

81.0

28.1%

 

93.2

36.5%

 

-13.2%

 

107.6

49.0%

 

-24.7%

 

Nuclear automation and control and miscellaneous

 

13.6

4.7%

 

13.9

5.4%

 

-1.9%

 

5.2

2.4%

 

162.9%

 

Total

 

288.5

100.0%

 

255.3

100.0%

 

13.0%

 

219.6

100.0%

 

31.4%

 
   
                           

 

Cash Flow Highlights

The net cash used in operating activities was $3.5 million for the three months ended December 31, 2010, mainly due to increased accounts receivables. Including investing and financing activities, the total net cash outflow for this quarter was $15.3 million, mainly due to the usage of $12.1 million to repay the three-year period bonds.

Balance Sheet Highlights

As of December 31, 2010, Hollysys' cash and cash equivalents were $95.0 million, compared to $110.2 million on September 30, 2010. Days Sales Outstanding ("DSO") for this quarter is 104 days, as compared to 137 days year-over-year and 111 days quarter-over-quarter. Inventory turnover is 60 days for the three months ended December 31, 2010, as compared to 58 days for the prior year period.

Outlook for FY 2011

Dr. Wang concluded, "Given our strong financial performance to date and historical record-high backlog balance, we are revising our fiscal 2011 revenues and net income guidance from $233M to $237M and $38 million to $39 million to $243 million to $247 million and $39 million to 41 million respectively."

Conference Call

Management will discuss the current status of the Company's operations during a conference call at 8:00 AM ET/9:00 PM Beijing time on Thursday, February 17, 2011. 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 44189027.

1-866-519-4004 (USA)
800-930-346 (HK)
800-819-0121 (China Landline)
400-620-8038 (China Mobile)
+65-67239381 (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 3000 employees with nationwide Presence in 29 cities in China and serves over 1700 customers in the industrial, railway, subway & nuclear industries. Its proprietary technologies are applied in product lines including Distributed Control System (DCS) and Programmable Logic Controller (PLC) for industrial sector, high-speed railway signaling system of TCC (Train Control Center) and ATP (Automatic Train Protection), 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

 
   

Jennifer Zhang
Investor Relations
(8610) 5898-1386
investors@hollysys.com

 
   

Lily Yu
Investor Relations
(8610) 5898-1326/+1-646-593-8125
yuyiou@hollysys.com

 
 

 
   

HOLLYSYS AUTOMATION TECHNOLOGIES LTD.

 

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

 

(In US Dollars)

 
                   
   

Three months ended
December 31,

 

Six months ended
December 31,

 
   

2010

 

2009

 

2010

 

2009

 
   

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

Revenues

                 

Integrated contract revenue

$

71,197,708

$

43,969,826

$

128,571,746

$

79,840,377

 

Products sales

 

3,173,063

 

2,193,281

 

6,641,867

 

4,516,338

 

Total revenues

 

74,370,771

 

46,163,107

 

135,213,613

 

84,356,715

 
                   

Cost of integrated contracts

 

45,758,899

 

30,360,789

 

83,881,846

 

53,944,533

 

Cost of products sold

 

1,836,224

 

1,409,204

 

3,375,286

 

1,808,782

 

Gross profit

 

26,775,648

 

14,393,114

 

47,956,481

 

28,603,400

 
                   

Operating expenses

                 

Selling

 

5,383,553

 

3,573,479

 

8,954,422

 

6,299,120

 

General and administrative

 

4,844,166

 

4,145,028

 

8,747,305

 

6,703,341

 

Research and development

 

6,447,952

 

3,395,326

 

10,773,839

 

6,248,605

 

VAT refunds and government subsidy

 

(5,186,791)

 

(5,617,990)

 

(7,170,506)

 

(7,759,870)

 

Total operating expenses

 

11,488,880

 

5,495,843

 

21,305,060

 

11,491,196

 
                   

Income from operations

 

15,286,768

 

8,897,271

 

26,651,421

 

17,112,204

 
                   

Other income (expenses), net

 

(595,396)

 

(104,264)

 

(552,812)

 

44,801

 

Gain on disposal of equity interest of an equity investee

 

-

 

-

 

1,427,541

 

-

 

Share of net gains of equity investees

 

2,303,870

 

363,689

 

1,953,327

 

599,974

 

Interest expense, net

 

(444,655)

 

(242,729)

 

(720,470)

 

(595,532)

 

Income before income taxes

 

16,550,587

 

8,913,967

 

28,759,007

 

17,161,447

 
                   

Income taxes expenses

 

1,699,844

 

101,808

 

3,642,848

 

921,806

 

Net income

 

14,850,743

 

8,812,159

 

25,116,159

 

16,239,641

 
                   

Less: Net income attributable to non-controlling interest

 

3,653

 

864,370

 

11,644

 

1,794,294

 

Net income attributable to Hollysys Automation Technologies Ltd.

$

14,847,090

$

7,947,789

$

25,104,515

$

14,445,347

 
                   

Weighted average number of common shares

 

54,449,999

 

49,942,614

 

54,449,564

 

49,942,614

 
                   

Weighted average number of diluted common shares

 

54,936,098

 

50,653,381

 

54,895,992

 

50,465,837

 
                   

Basic earnings per share attributable to Hollysys Automation Technologies Ltd.

 

0.27

 

0.16

 

0.46

 

0.29

 
                   

Diluted earnings per share attributable to Hollysys Automation Technologies Ltd.

 

0.27

 

0.16

 

0.46

 

0.29

 
                   

Other comprehensive income

                 

Net income

 

14,850,743

 

8,812,159

 

25,116,159

 

16,239,641

 

Translation adjustments

 

2,422,268

 

(3,563)

 

5,432,221

 

117,899

 

Comprehensive income

 

17,273,011

 

8,808,596

 

30,548,380

 

16,357,540

 
                   

Less: Comprehensive income attributable to non-controlling interest

 

13,627

 

864,967

 

32,740

 

1,813,243

 

Comprehensive income attributable to Hollysys Automation Technologies Ltd.

$

17,259,384

$

7,943,629

$

30,515,640

$

14,544,297

 
   
                 

 
   

HOLLYSYS AUTOMATION TECHNOLOGIES LTD.

 

CONSOLIDATED BALANCE SHEETS

 

(In US Dollars)

 
               
       

December
31, 2010

 

September
30, 2010

 
       

(Unaudited)

 

(Unaudited)

 

ASSETS

         
 

Current Assets

         
   

Cash and cash equivalents

$

94,952,089

$

110,223,446

 
   

Contract commitment deposit in banks

 

6,194,005

 

5,104,740

 
   

Accounts receivable, net of allowance for doubtful accounts of $9,793,698 and $9,411,259

 

86,246,393

 

67,216,021

 
   

Cost and estimated earnings in excess of billings, net of allowance for doubtful accounts of $1,131,539 and $1,256,336

 

84,607,121

 

81,989,156

 
   

Other receivables, net of allowance for doubtful accounts of $153,043 and $197,927

 

3,708,422

 

5,336,728

 
   

Advances to suppliers

 

15,222,850

 

7,523,462

 
   

Amount due from related parties

 

11,783,932

 

11,537,861

 
   

Inventories, net of provision of $2,183,416 and $2,811,087

 

30,097,403

 

28,120,204

 
   

Prepaid expenses

 

964,330

 

889,870

 
   

Deferred tax assets

 

707,023

 

589,997

 
   

Assets held for sale

 

8,741,354

 

8,534,792

 
 

Total current assets

 

343,224,922

 

327,066,277

 
               
 

Property, plant and equipment, net

 

61,507,308

 

59,421,550

 
 

Long term investments

 

16,690,181

 

14,829,360

 
 

Deferred tax assets

 

730,260

 

710,540

 
               
 

Total assets

 

422,152,671

 

402,027,727

 
               

LIABILITIES AND STOCKHOLDERS' EQUITY

         
 

Current liabilities

         
   

Short-term bank loans

 

489,801

 

-

 
   

Current portion of long-term loans

 

3,019,825

 

2,238,438

 
   

Bonds payable

 

-

 

11,938,338

 
   

Accounts payable

 

61,646,943

 

48,695,645

 
   

Construction cost payable

 

6,817,059

 

8,468,957

 
   

Deferred revenue

 

35,679,412

 

34,341,675

 
   

Accrued payroll and related expense

 

6,440,471

 

4,681,590

 
   

Income tax payable

 

5,310,560

 

1,626,514

 
   

Warranty liabilities

 

2,298,221

 

2,028,962

 
   

Other tax payables

 

12,772,541

 

12,843,882

 
   

Accrued liabilities

 

4,329,403

 

4,673,989

 
   

Amounts due to related parties

 

3,743,103

 

3,489,366

 
   

Deferred tax liabilities

 

555,835

 

579,184

 
 

Total current liabilities

 

143,103,174

 

135,606,540

 
               
   

Long-term bank loans

 

34,727,989

 

35,068,869

 
               
 

Total liabilities

 

177,831,163

 

170,675,409

 
               
 

Commitments and contingencies

         
               
 

Stockholder's equity

         
   

Common stock, par value $0.001 per share, 100,000,000 shares authorized, 54,454,129 and 54,449,129 shares issued and outstanding

 

54,455

 

54,450

 
   

Additional paid-in capital

 

139,052,695

 

138,882,181

 
   

Appropriated earnings

 

17,396,777

 

17,396,777

 
   

Retained earnings

 

64,041,307

 

53,648,616

 
   

Accumulated comprehensive income - translation adjustments

 

22,968,669

 

20,576,316

 
 

Total Hollysys Automation Technologies Ltd. stockholder's equity

 

243,513,903

 

230,558,340

 
               
   

Non-controlling interest

 

807,605

 

793,978

 
 

Total equity

 

244,321,508

 

231,352,318

 
               
 

Total liabilities and stockholders' equity

$

422,152,671

$

402,027,727

 
   
             

 

HOLLYSYS AUTOMATION TECHNOLOGIES LTD.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(In US Dollars)

 
             
     

Three months ended
December 31, 2010

 

Six months ended
December 31, 2010

 
     

(Unaudited)

 

(Unaudited)

 

Cash flows from operating activities:

         
 

Net income

$

14,850,743

$

25,116,159

 

Adjustments to reconcile net income to net cash

         

provided by (used in) operating activities:

         
 

Depreciation and amortization

 

1,213,210

 

2,161,287

 
 

Allowance for doubtful accounts

 

544,486

 

1,651,020

 
 

Impairment loss on long-term investment

 

150,991

 

150,991

 
 

Impairment loss on property, plant and equipment

 

23,441

 

23,441

 
 

Gain on disposal of property, plant and equipment

 

(93,601)

 

(77,086)

 
 

Gain on disposal of equity interest of an equity investee

 

-

 

(1,427,541)

 
 

Share of net gains from equity investees

 

(2,303,870)

 

(1,953,327)

 
 

Amortization of expenses accrued for bond payable

 

15,964

 

31,559

 
 

Stock-based compensation

 

131,019

 

262,038

 
 

Deferred tax assets (liabilities), net

 

(140,539)

 

794,367

 

Changes in operating assets and liabilities:

         
 

Accounts receivable

 

(16,159,335)

 

(20,384,630)

 
 

Cost and estimated earnings in excess of billings

 

(4,690,752)

 

(23,708,588)

 
 

Inventories  

 

(1,695,354)

 

(5,945,580)

 
 

Advance to suppliers

 

(7,571,639)

 

(4,275,857)

 
 

Other receivables  

 

1,724,845

 

564,965

 
 

Deposits and other assets

 

(2,161,585)

 

(1,646,263)

 
 

Due from related parties

 

136,906

 

(164,660)

 
 

Accounts payable

 

12,384,597

 

18,880,759

 
 

Deferred revenue

 

936,251

 

1,275,322

 
 

Accruals and other payable

 

76,382

 

1,157,477

 
 

Due to related parties

 

210,154

 

8,412

 
 

Tax payable

 

(1,107,304)

 

2,169,303

 
 

Net cash used in operating activities

 

(3,524,990)

 

(5,336,432)

 
             

Cash flows from investing activities:

         
 

Purchase of property, plant and equipment

 

(3,188,028)

 

(13,265,780)

 
 

Proceeds from disposal of property, plant and equipment

 

5,295

 

10,598

 
 

Repayment from related parties

 

-

 

27

 
 

Proceeds from disposal of equity interest of investees

 

1,236,923

 

3,678,970

 
 

Dividends from an equity investee

 

90,595

 

90,595

 
 

Net cash used in investing activities

 

(1,855,215)

 

(9,485,590)

 
             

Cash flows from financing activities:

         
 

Proceeds from (Repayments of) short-term loans

 

472,180

 

(1,020,112)

 
 

Repayments of bonds payable

 

(12,079,301)

 

(12,079,301)

 
 

Proceeds from exercise of options

 

39,500

 

39,500

 
 

Net cash used in financing activities

 

(11,567,621)

 

(13,059,913)

 
             
 

Effect of foreign exchange rate changes

 

1,676,469

 

3,332,079

 
 

Net decrease in cash and cash equivalents

$

(15,271,357)

$

(24,549,856)

 
             
 

Cash and cash equivalents, beginning of period

$

110,223,446

$

119,501,945

 
 

Cash and cash equivalents, end of period

 

94,952,089

 

94,952,089

 
           

 

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
December 31,

 

Six months ended
December 31,

 
     

2010

 

2009

 

2010

 

2009

 
     

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 

(Unaudited)

 
                     

Net income attributable to Hollysys Automation Technologies Ltd.

$

14,847,090

$

7,947,789

$

25,104,515

$

14,445,347

 

Adjustments:

                 
 

Stock-based compensation cost for options

 

131,019

 

131,019

 

262,038

 

262,038

 

Non-GAAP Net Income attributable to Hollysys Automation Technologies Ltd.

$

14,978,109

$

8,078,808

$

25,366,553

$

14,707,385

 
                   

 

SOURCE Hollysys Automation Technologies, Ltd.

CONTACT: Jennifer Zhang, Investor Relations at +86-10-5898-1386 or investors@hollysys.com; Lily Yu, Investor Relations at +86-10-5898-1326/+1-646-593-8125 or yuyiou@hollysys.com

Web Site: http://www.hollysys.com


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