Hollysys Automation Technologies Reports Unaudited Financial Results for the Fiscal Year 2012 First Quarter Ended September 30, 2011

PR Newswire
BEIJING
Nov 14, 2011

BEIJING, Nov. 14, 2011 /PRNewswire-Asia-FirstCall/ --

Q1 Financial Highlights

  • Quarterly revenues of $87.2 million, representing an increase of 43.3% compared to $60.8 million year-over-year.
  • Gross margin at 37.8%, as compared to 34.8% year-over-year, and 28.8% quarter-over-quarter
  • Non-GAAP net income attributable to Hollysys of $12.8 million, as compared to $10.4 million and a 23.6% increase year-over-year.
  • Non-GAAP Diluted EPS at $0.23 reported for the quarter, as compared to $0.19 year-over-year
  • Record-high backlog of $300.1 million as of September 30, 2011, a 17.6% increase compared to $255.3 million year-over-year, and 1.3% increase compared to $296.4 million quarter-over-quarter.
  • Quarterly DSO of 138 days, as compared to 111 days year-over-year and 129 days quarter over quarter.
  • Inventory turn-over days in this quarter of 51 compared to 65 days year-over-year and 63 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 the fiscal first quarter ended September 30, 2011 (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. Here I would like to take this opportunity to discuss some key events that took place in this quarter:

"In our industrial automation business, we are glad to see some of our strategic measures we put in one year or two years ago starting to pay off evidenced by unprecedented quarterly growth at 65% on year-on-year basis. It was our strategic decision of increasing R&D investment back to January 2009 amidst the height of financial crises that a series of our proprietary products have been churned out and pushed to the market that rounded out our industrial product portfolio and enabled Hollysys to position itself as a total solution provider. Envisioning the secular trend of dramatic increased adoption of industrial automation in China, we aggressively expanded our industrial sales force and sales and service network between July and December 2010, resulting in sales force growing from 150 to 500 and geographic coverage expanded from 21 to 40 cities across China. Hollysys has been a foreign system substitute in this sector, leveraging on its better value for money proposition to a wide array of industrial clients ranging from state-owned-enterprises, multinational corporations, and local small and medium sized companies. Over the past 16 years, we have been successfully entered, penetrated, and took leadership from low-end to mid-end market segments, and we are now chasing our multination peers to the high-end segment, while we will continue to expand our sales force and network coverage consolidating the low-end to mid-end markets, in order to become the absolute leader in Chinese industrial market.

"In our rail transportation segment, there has been some encouraging news over the past month for China's high-speed rail segment, which may have indicated a new page has been turned in this sector. Chinese government issued an official statement recently that "all rail related debt offering is backed and supported by the government" and the Ministry of Finance went as far as granting a tax holiday to all debt holders of Ministry of Rail (MOR) for 50% deduction on interest income tax. With the government coming up to support MOR's debt issuance, MOR has successfully raised 40 billion RMB and there was another 200 billion RMB financing believed to be in the works, which means that MOR's financing issue is largely resolved for now. There is 13,000 km of high-speed rail tracks currently under construction, which will require signaling system to be installed prior to commercial operation. We are cautiously optimistic on continuous revenue generation from China's high-speed rail segment for the next few years.

"Hollysys was blessed to have been playing a leading role in China's high-speed rail signaling market in which we obtained the key capability in signaling technology and know-how. To be determined to become one of the leading international signaling players, Hollysys have been investing significant resources in developing the whole set of signaling products for both High-speed rail and subway according to European Safety Standard. We have obtained European Safety Standard Certification Level 4 (SIL 4) for our proprietary signaling products, such as ATP for 200-250 km/h segment, Balise Transmission Module (BTM), Line-side Electronic Unit (LEU), temporary train control system (TSRS), and Vital Computer platform (HVC) enabling various signaling related applications to be developed in a scalable and swift manner. We have also completed development of train control center (TCC) and interlocking system base on our proprietary HVC and will receive SIL 4 certification for these pertaining products in the next few months. We are working on propelling our high-speed rail signaling business on dual engines of both Chinese and international market going forward.

"From this quarter on, our financial reporting would include the financial performance of Concord Corporation Pte Ltd. (CCPL) on consolidated basis. We are satisfied with its quarterly results given the delay of some sizable contracts in subway and industrial sectors totaling to more than USD 10 million. During this quarter, we made substantial progress in integrating our businesses and product lines for international market, which is spearheaded by Casey Liu, CCPL CEO, and Jay Naidu, CCPL Executive VP, who have years of technical and corporate management experiences with GE Industrial Automation, Thales Transportation, Bombardier Transportation, and Land Transport Authority of Singapore. Hollysys and CCPL have already been working together on some of the signaling and SCADA opportunities in south-eastern Asian market, which we believe would prelude Hollysys' entry to international market of its proprietary products.

"It is worth noting that Hollysys management completed the stock purchase plan of US$ 7.5 million with 1.26 million shares purchased on open market this quarter, which was a strong indication of our collective confidence in Hollysys' business fundamentals and growth prospects."

The First Quarter Ended September 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

 
   

September 30,
2011

September 30,
2010

%
Change

 
           

Revenues

$

87,164

60,843

43.3%

 

   Integrated Contract Revenue

$

83,482

57,374

45.5%

 

   Products Sales

$

3,682

3,469

6.2%

 

Cost of Revenues

$

54,217

39,662

36.7%

 

Gross Profit

$

32,947

21,181

55.6%

 

Total Operating Expenses

$

17,515

9,685

80.9%

 

   Selling

$

6,982

3,571

95.5%

 

   General and Administrative

$

4,858

3,772

28.8%

 

   Research and Development

$

6,069

4,326

40.3%

 

   VAT refunds and government subsidy

$

(394)

(1,984)

(80.1)%

 

Income from Operations

$

15,432

11,496

34.2%

 

Other income , net

$

188

51

266.6%

 

Gains on disposal of equity interest in equity investees

$

-

1,419

(100.0)%

 

Share of net losses of equity investees

$

(55)

(351)

(84.3)%

 

Interest expense, net

$

(721)

(276)

161.5%

 

Income Tax Expenses

$

1,866

1,943

(4.0)%

 

Non-GAAP Net income  attributable to non-controlling interest

$

141

8

1663.6%

 

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

$

12,837

10,388

23.6%

 

Basic Non-GAAP EPS

$

0.23

0.19

22.3%

 

Diluted  Non-GAAP EPS

$

0.23

0.19

22.7%

 
           

Stock-based Compensation Cost

$

157

131

20.1%

 

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

$

12,679

10,257

23.6%

 

Basic GAAP EPS

$

0.23

0.19

22.4%

 

Diluted GAAP EPS

$

0.23

0.19

22.8%

 
           

Basic Weighted Average Common Shares Outstanding

 

55,009,486

54,449,129

1.0%

 

Diluted Weighted Average Common Shares Outstanding

 

55,238,035

54,855,885

0.7%

 
   
         

 

Operational Results Analysis for the first quarter ended September 30, 2011

For the three months ended September 30, 2011, total revenues increased by 43.3% to $87.2 million, from $60.8 million in the prior fiscal year period.  Of the total revenues, revenue from integrated contracts increased by 45.5% to $83.5 million, as compared to $57.4 million for the same period of the prior year. The Company's integrated contract revenue by segment was as followings:

(In USD million)

 
   

Three months ended September 30,

 
   

2011

 

2010

 
   

$

% to Total Revenue

 

$

% to Total Revenue

 

Industrial Automation

 

53.0

63.5%

 

32.1

55.9%

 

Rail Transportation

 

25.4

30.4%

 

25.3

44.1%

 

Overseas

 

5.1

6.1%

 

-

0.0%

 

Total

 

83.5

100.0%

 

57.4

100.0%

 
   
             

 

Starting from this quarter, the integrated revenue is presented in slightly different break-down manner from the previous earnings releases, to better reflect our business model and strategy going forward, in which the previously segregated category of nuclear is lumped together with industrial automation and the categories of rail automation and subway automation previously reported separately are lumped together under rail transportation. The overseas category reflects the revenue from newly acquired Singaporean company. The industrial automation revenue of 53.0 million is consisted of industrial automation revenue of 51.8 million and nuclear revenue of 1.2 million in previous break-down categories. And the rail transportation revenue of 25.4 million is consisted of high-speed rail revenue of 16.4 million and subway automation revenue of 9.0 million.

As a percentage of total revenues, overall gross margin was 37.8% for the three months ended September 30, 2011, as compared to 34.8% for the same period of last year. The gross margin for integrated contracts and product sales were 36.6% and 64.4% for the three months ended September 30, 2011, as compared to 33.6% and 55.6% for the same period of last year respectively. The gross margin increase was mainly due to higher gross margin in rail businesses, as a result of a few higher margin projects or portion of projects of high-speed rail being recognized in the quarter.

For the three months ended September 30, 2011, selling expenses were $7.0 million, compared to $6.2 million quarter over quarter, and $3.6 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 8.0% compared to 8.6% quarter over quarter, and 5.9% year over year.

General and administrative expenses, excluding non-cash stock-based compensation expense, were $4.9 million for the quarter ended September 30, 2011, representing an increase of $1.1 million, or 27.8%, as compared to $3.8 million for the same period of prior year. The increase was mainly contributed by the newly acquired Singaporean subsidiary. As a percentage of total revenues, G&A expenses were 5.6% and 6.2% for the three months ended September 30, 2011 and 2010, respectively. Including the non-cash stock compensation cost recorded on a GAAP basis, G&A expenses were $5.0 million and $3.9 million for three months ended September 30, 2011 and 2010, respectively.

Research and development expenses were $6.1 million for the three months ended September 30, 2011, compared to $4.3 million for the same period of last year, increased by $1.7 million, or 40.3%, mainly due to the Company's increased R&D activities. As a percentage of total revenue, R&D expenses were 7.0% and 7.1% for three months ended September 30, 2011 and 2010, respectively.

The income tax expenses were $1.9 million the three months ended September 30, 2011, compared to $1.9 million for the prior year period.

For the three months ended September 30, 2011, the non-GAAP net income excluding non-cash stock compensation cost was $12.8 million or $0.23 per diluted share based on 55 million shares outstanding. This represents an increase of $2.4 million, or 23.6%, over the $10.4 million, or $0.19 per share based on 55 million shares outstanding, reported in the prior year period. On a GAAP basis, net income attributable to Hollysys was $12.7 million, or $0.23 per diluted share representing an increase of $0.04, or 22.8%, over the $10.3 million, or $0.19 per share reported in the prior year period.

Backlog Highlights

Hollysys' backlog as of September 30, 2011 was $300.1 million, compared to $296.4 million on June 30, 2011, and $255.3 million on September 30, 2010. The detailed breakdown of the backlog by segment is as followings:

(In USD million)

 
         

Quarter-over-Quarter Analysis

 

Year-over-Year Analysis

 
   

2011-9-30

 

2011-6-30

 

2010-9-30

 
   

$

% to
Total
Backlog

 

$

% to Total
Backlog

 

%
Change

 

$

% to Total
Backlog

 

%
Change

 

Industrial Automation

 

128.7

42.9%

 

120.5

40.7%

 

6.8%

 

99.1

38.8%

 

29.8%

 

Rail Transportation

 

157.2

52.4%

 

175.9

59.3%

 

(10.6%)

 

156.2

61.2%

 

0.8%

 

Overseas

 

14.2

4.7%

 

-

-

 

-

 

-

-

 

-

 

Total

 

300.1

100.0%

 

296.4

100.0%

 

1.3%

 

255.3

100.0%

 

17.6%

 
   
                           

 

In backlog breakdown, industrial automation backlog set another historical high in Hollysys' history.

Cash Flow Highlights

The net cash used in operating activities was $2.6 million for the three months ended September 30, 2011, mainly due to increased billed accounts receivables. Including investing and financing activities, the total net cash outflow for this quarter was $13.2 million, mainly due to a cash outflow of $5.4 million for acquisition of Concord Group and a cash outflow of 8.3 million dividend paid to the ex-shareholders of Concord.

Balance Sheet Highlights

As of September 30, 2011, Hollysys' cash and cash equivalents were $75.5 million, compared to $90.7 million on June 30, 2011. For the three months ended September 30, 2011, Days Sales Outstanding ("DSO") is 138 days, as compared to 111 days year-over-year and 129 days quarter-over-quarter; and inventory turnover was 51 days, as compared to 65 year-over-year and 63 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 US $354 million and US $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, November 15, 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 24511309.

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
September 30,

   
   

2011

 

2010

   
   

(Unaudited)

 

(Unaudited)

   

Revenues

           

Integrated contract revenue

$

83,481,883

$

57,374,038

   

Products sales

 

3,682,190

 

3,468,804

   

Total revenues

 

87,164,073

 

60,842,842

   
             

Cost of integrated contracts

 

52,905,654

 

38,122,947

   

Cost of products sold

 

1,311,271

 

1,539,062

   

Gross profit

 

32,947,148

 

21,180,833

   
             

Operating expenses

           

Selling

 

6,981,831

 

3,570,869

   

General and administrative

 

5,015,483

 

3,903,139

   

Research and development

 

6,069,469

 

4,325,887

   

VAT refunds and government subsidy

 

(394,491)

 

(1,983,715)

   

Total operating expenses

 

17,672,292

 

9,816,180

   
             

Income from operations

 

15,274,856

 

11,364,653

   
             

Other income, net

 

187,926

 

51,260

   

Gains on disposal of equity interest in equity investees

 

-

 

1,418,865

   

Share of net losses of equity investees

 

(55,175)

 

(350,543)

   

Interest expense, net

 

(721,139)

 

(275,815)

   

Income before income taxes

 

14,686,468

 

12,208,420

   
             

Income taxes expenses

 

1,866,180

 

1,943,004

   

Net income

 

12,820,288

 

10,265,416

   
             

Less: Net income attributable to non-controlling interest

 

140,930

 

7,991

   

Net income attributable to Hollysys Automation Technologies Ltd.

$

12,679,358

$

10,257,425

   
             

Weighted average number of common shares

 

55,009,486

 

54,449,129

   
             

Weighted average number of diluted common shares

 

55,238,035

 

54,855,885

   
             

Basic earnings per share attributable to Hollysys Automation Technologies Ltd.

 

0.23

 

0.19

   
             

Diluted earnings per share attributable to Hollysys Automation Technologies Ltd.

 

0.23

 

0.19

   
             

Other comprehensive income

           

Net income

 

12,820,288

 

10,265,416

   

Translation adjustments

 

3,939,572

 

3,009,953

   

Comprehensive income

 

16,759,860

 

13,275,369

   
             

Less: Comprehensive income attributable to non-controlling interest

 

158,051

 

19,113

   

Comprehensive income attributable to Hollysys Automation Technologies Ltd.

$

16,601,809

$

13,256,256

   
   
           

 
   

HOLLYSYS AUTOMATION TECHNOLOGIES LTD.

 

CONSOLIDATED BALANCE SHEETS

 

(In US Dollars)

 
               
       

September 30,

 

June 30,

 
       

2011

 

2011

 
       

(Unaudited)

 

(Audited)

 

ASSETS

         
 

Current Assets

         
   

Cash and cash equivalents

$

75,481,686

$

90,669,059

 
   

Contract commitment deposit in banks

 

5,181,347

 

4,115,733

 
   

Accounts receivable, net of allowance for doubtful accounts of $11,807,986 and $10,691,809

 

141,702,792

 

98,002,235

 
   

Cost and estimated earnings in excess of billings, net of allowance for doubtful accounts of $1,245,195 and $1,232,813

 

91,083,222

 

103,515,659

 
   

Other receivables, net of allowance for doubtful accounts of $287,941 and $249,052

 

10,142,615

 

5,057,899

 
   

Advances to suppliers

 

8,909,293

 

7,818,493

 
   

Amount due from related parties

 

12,328,919

 

12,175,447

 
   

Inventories, net of provision of $1,878,520 and $1,738,184

 

28,648,382

 

27,972,600

 
   

Prepaid expenses

 

827,102

 

1,018,841

 
   

Deferred tax assets

 

2,230,438

 

2,021,466

 
   

Assets held for sale

 

9,109,996

 

8,945,718

 
   

Income tax recoverable

 

-

 

1,098,806

 
 

Total current assets

 

385,645,792

 

362,411,956

 
               
 

Advance payment for acquisition of a subsidiary

 

-

 

16,856,148

 
 

Goodwill

 

30,653,451

 

-

 
 

Property, plant and equipment, net

 

60,127,428

 

59,753,192

 
 

Long term investments

 

18,602,786

 

18,571,152

 
 

Deferred tax assets

 

1,592,503

 

991,496

 
               
 

Total assets

 

496,621,960

 

458,583,944

 
               

LIABILITIES AND STOCKHOLDERS' EQUITY

         
 

Current liabilities

         
   

Short-term bank loans

 

11,763,847

 

11,528,465

 
   

Current portion of long-term loans

 

6,687,753

 

5,408,245

 
   

Accounts payable

 

73,521,893

 

63,397,616

 
   

Deferred revenue

 

40,759,978

 

43,202,760

 
   

Accrued payroll and related expense

 

8,335,960

 

6,181,626

 
   

Income tax payable

 

4,171,832

 

5,060,131

 
   

Warranty liabilities

 

3,053,148

 

2,798,800

 
   

Other tax payables

 

12,870,295

 

12,547,517

 
   

Accrued liabilities

 

8,201,316

 

5,692,209

 
   

Amounts due to related parties

 

3,291,229

 

3,338,563

 
   

Construction cost payable

 

1,766,133

 

1,882,872

 
 

Total current liabilities

 

174,423,384

 

161,038,804

 
               
   

Long-term bank loans

 

30,291,586

 

31,676,865

 
               
 

Total liabilities

 

204,714,970

 

192,715,669

 
               
 

Commitments and contingencies

         
               
 

Stockholder's equity

         
   

Common stock, par value $0.001 per share, 100,000,000 shares authorized, 55,698,917 and 54,692,129 shares issued and outstanding

 

55,700

 

54,693

 
   

Additional paid-in capital

 

149,651,434

 

140,373,585

 
   

Appropriated earnings

 

23,061,780

 

23,061,779

 
   

Retained earnings

 

87,421,146

 

74,741,788

 
   

Accumulated comprehensive income - translation adjustments

 

30,748,261

 

26,825,812

 
 

Total Hollysys Automation Technologies Ltd. stockholder's equity

 

290,938,321

 

265,057,657

 
               
   

Non-controlling interest

 

968,669

 

810,618

 
 

Total equity

 

291,906,990

 

265,868,275

 
               
 

Total liabilities and stockholders' equity

$

496,621,960

$

458,583,944

 
   
             

 
   

HOLLYSYS AUTOMATION TECHNOLOGIES LTD.

 

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

(In US Dollars)

 
             
     

Three months ended 
September 30, 2011

 

Three months ended 
September 30, 2010

 
     

(Unaudited)

 

(Unaudited)

 

Cash flows from operating activities:

         
 

Net income

$

12,820,288

$

10,265,416

 

Adjustments to reconcile net income to net cash

         

provided by (used in) operating activities:

         
 

Depreciation and amortization

 

1,382,084

 

948,077

 
 

Allowance for doubtful accounts

 

990,887

 

1,106,534

 
 

Provision for inventories

 

108,416

 

385,466

 
 

Loss on disposal of property, plant and equipment

 

17

 

16,515

 
 

Gains on disposal of equity investees

 

-

 

(1,428,371)

 
 

Share of net losses from equity investees

 

55,175

 

350,543

 
 

Amortization of expenses accrued for bond payable

 

-

 

15,595

 
 

Stock-based compensation

 

157,356

 

131,019

 
 

Deferred tax assets (liabilities), net

 

(763,944)

 

934,906

 

Changes in operating assets and liabilities:

         
 

Accounts receivable

 

(33,081,495)

 

(4,225,295)

 
 

Cost and estimated earnings in excess of billings

 

12,420,055

 

(19,017,836)

 
 

Inventories  

 

236,295

 

(4,635,692)

 
 

Advance to suppliers

 

(488,192)

 

3,295,782

 
 

Other receivables  

 

924,729

 

(1,159,880)

 
 

Deposits and other assets

 

(734,117)

 

515,322

 
 

Due from related parties

 

70,115

 

(301,566)

 
 

Accounts payable

 

4,820,060

 

6,496,162

 
 

Deferred revenue

 

(3,894,518)

 

339,071

 
 

Accruals and other payable

 

4,384,655

 

1,081,095

 
 

Due to related parties

 

(108,643)

 

(201,742)

 
 

Tax payable

 

(1,894,072)

 

3,276,607

 
 

Net cash used in operating activities

 

(2,594,849)

 

(1,812,272)

 
             

Cash flows from investing activities:

         
 

Purchase of property, plant and equipment

 

(872,812)

 

(10,077,752)

 
 

Proceeds from disposing property, plant and equipment

 

2,767,236

 

5,303

 
 

Receipt  from related parties

 

-

 

27

 
 

Acquisition of a subsidiary, net of cash acquired

 

(5,410,486)

 

-

 
 

Proceeds from disposal of equity interest in equity investees

 

-

 

2,442,047

 
 

Net cash used in investing activities

 

(3,516,062)

 

(7,630,375)

 
             

Cash flows from financing activities:

         
 

Proceeds from short-term loans

 

151,094

 

-

 
 

Repayments of short-term loans

 

(126,258)

 

(1,492,292)

 
 

Repayments of long-term loans

 

(1,389,304)

 

-

 
 

Repayment of amounts due to the ex-shareholders of Concord

 

(8,301,708)

 

-

 
 

Net cash used in financing activities

 

(9,666,176)

 

(1,492,292)

 
             
 

Effect of foreign exchange rate changes

 

589,714

 

1,656,440

 
 

Net decrease in cash and cash equivalents

$

(15,187,373)

$

(9,278,499)

 
             
 

Cash and cash equivalents, beginning of period

$

90,669,059

$

119,501,945

 
 

Cash and cash equivalents, end of period

 

75,481,686

 

110,223,446

 
   
           

 

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
September 30,

 
     

2011

 

2010

 
     

(Unaudited)

 

(Unaudited)

 
             

Net income attributable to Hollysys Automation Technologies Ltd.

$

12,679,358

$

10,257,425

 

Adjustments:

         
   

Stock-based compensation cost

 

157,356

 

131,019

 

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

$

12,836,714

$

10,388,444

 
   
           

 

SOURCE Hollysys Automation Technologies, Ltd.

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


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