XI'AN, China, May 22
2013 /PRNewswire-FirstCall/ -- Kingtone Wirelessinfo Solution
Holding Ltd (Nasdaq: KONE) ("Kingtone", "we" or the "Company"), a
China-based developer and provider
of mobile enterprise solutions, today announced financial results
for the six months ended March 31,
2013. The financial statements and other financial
information included in this press release are prepared in
conformity with accounting principles generally accepted in
the United States of America
("U.S. GAAP").
Financial Highlights for the Six Months Ended March 31, 2013:
- Revenues increased 153.1% to $3.0
million from $1.2 million for
the six months ended March 31,
2012.
- Gross profit increased 318.3% to $0.4
million from minus $0.2
million for the six months ended March 31, 2012.
- Gross margin increased to 14.8% from minus 17.1% for the six
months ended March 31, 2012.
- Net loss decreased to approximately $1.8
million from approximately $5.2
million for the six months ended March 31, 2012.
- Basic and diluted loss per share was $1.29 for the six months ended March 31, 2013 compared to basic and diluted loss
per share of $3.70 for the six months
ended March 31, 2012. Weighted
average shares outstanding for the six months ended March 31, 2013 remained unchanged at
1,405,000*.
"Although it is a gradual process, I am glad to see our business
is recovering," said Mr. Peng Zhang,
Chief Executive Officer. "We believe that our business will grow
slowly but steadily, and hope our investors will remain patient
with our business and capital market performance. It is clear
that the current economic environment presents a series of
challenges and opportunities. Ultimately, we believe that client
demand for our products and services will be the main force in
driving our performance."
Results of Operations – For the Six Months Ended
March 31, 2013 Compared to the Six
Months Ended March 31,
2012
Net Revenues
The Company's revenues increased by 153.1% to $3.0 million for the six months ended
March 31, 2013, as compared to
$1.2 million for the six months ended
March 31, 2012.
Revenues from software solutions increased by 284.6% to
$0.2 million in the six months
ended March 31, 2013, compared to
$0.05 million in the six months
ended March 31, 2012. As a percentage
of total revenue, software solutions sales increased from 4.4% to
6.7%. The increase in our software solutions revenue was mainly due
to the fact that the Company has signed contracts for larger value
amounts in the six months ended March 31,
2013 than those signed in the six months ended March 31, 2012.
Revenues from wireless system solutions increased by 147.0% to
$2.8 million in the six months ended
March 31, 2013, compared to
$1.1 million in the six months ended
March 31, 2012. As a percentage of
total revenue, wireless system solution sales decreased from 95.6%
to 93.3% of our total revenue. The increase in revenue from
wireless system solutions was mainly attributable to revenue
recognition from the contracts signed in earlier periods.
Cost of Sales
Cost of sales increased by 84.1% to approximately $2.5 million for the six months ended
March 31, 2013 from approximately
$1.4 million for the six months ended
March 31, 2012. As a percentage of
our total revenues, cost of sales decreased from 117.1% of our
total revenues for the six months ended March 31, 2012 to 85.2% of our total revenues for
the six months ended March 31, 2013.
The increase in our cost of sales was proportional to the increase
in sales for the six months ended March 31,
2013.
Cost of sales for software solutions decreased by 30.3% to
approximately $0.3 million for the
six months ended March 31, 2013,
compared to approximately $0.4
million for the six months ended March 31, 2012. This represented 9.9% and 26.3%
of the total cost of sales, and 126.5% and 698.1% of software
solutions revenue, for the six months ended March 31, 2013 and 2012, respectively.
Cost of sales for wireless system solutions increased by 125.0%,
from approximately $1.0 million for
the six months ended March 31, 2012
to approximately $2.3 million for the
six months ended March 31, 2013. This
represented 90.1% and 73.7% of the total cost of sales, and 82.3%
and 90.3% of wireless system solution revenues, for the six months
ended March 31, 2013 and 2012,
respectively.
Gross Profit and Gross Margin
In the six months ended March 31,
2013, gross profit increased by 318.3% to $0.4 million from minus $0.2 million in the six months ended March 31, 2012. Gross margin for the six months
ended March 31, 2013 was 14.8%,
compared to minus 17.1% in the six months ended March 31, 2012. This increase of gross
profit and gross margin was primarily due to the relatively higher
profit margin in the contracts we signed in the six months ended
March 31, 2013 compared to those
signed in the six months ended March
31, 2012.
Gross profit from software solutions increased by 83.0% for the
six months ended March 31, 2013, from
minus $0.3 million to minus
$0.05 million, and gross margin
increased to minus 26.5% from minus 598.1% in the six months ended
March 31, 2012. Gross profit from
wireless system solutions increased by 353.2% for the six months
ended March 31, 2013, from
$0.11 million to $0.5 million, and gross margin increased to 17.7%
from 9.7% in the six months ended March
31, 2012.
Operating Expenses
Total operating expenses for the six months ended March 31, 2013 were $2.3
million, compared to $5.0
million for the six months ended March 31, 2012, representing a decrease of
54.5%.
Selling and marketing expenses decreased by 38.7% to
$0.27 million in the six months
ended March 31, 2013, compared to
$0.43 million for the six months
ended March 31, 2012, and represented
8.9% and 36.8% of revenues for the six months ended March 31, 2013 and 2012, respectively. The
decrease in sales and marketing expenses was a direct result of the
Company's decision to close the representative offices in Tibet and
Yan'An to reduce expenses.
General and administrative expenses were approximately
$1.7 million in the six months
ended March 31, 2013, a decrease of
59.8% from $4.4 million in the six
months ended March 31, 2013, and
represented 58.5% and 369.0% of revenues for the six months ended
March 31, 2013 and 2012,
respectively. The significant decrease in general and
administrative expenses was primarily due to the fact that bad debt
expenses were only $0.5 million in
the six months ended March 31, 2013,
compared to approximately $3.3
million in the six months ended March
31, 2012.
Research and development expenses were approximately
$0.25 million in the six months
ended March 31, 2013, an increase of
28.7% from $0.20 million in the six
months ended March 31, 2012, and
represented 8.4% and 16.5% of revenues for the six months ended
March 31, 2013 and 2012,
respectively.
Loss from Operations
The Company had loss from operations of $1.8 million in the six months ended
March 31, 2013, compared to loss from
operations of $5.2 million in the six
months ended March 31, 2012, a
decrease of $3.4 million, or 64.8%,
primarily due to increases in revenues from software solutions and
wireless system solutions compounded by a decrease in operating
expenses. Operating margins for the six months ended March 31, 2013 and 2012 were minus 61.1% and
minus 439.5%, respectively.
Net Loss and EPS
Net loss was $1.8 million during
the six months ended March 31, 2013,
compared to net loss of $5.2 million
in the six months ended March 31,
2012, a decrease of $3.4
million, or 65.0%. Net loss as a percentage of total
net revenues were minus 60.6% and minus 438.5% for the six months
ended March 31, 2013 and 2012,
respectively. Basic and diluted loss per share was $1.29 in the six months ended March 31, 2013, compared to basic and diluted
loss per share of $3.70 in the prior
year period. The number of weighted average common shares
outstanding for the six months ended March
31, 2013 remained unchanged at 1,405,000.
Liquidity and Capital Resources
Cash and Cash Equivalents
As of March 31, 2013, the Company
had cash and cash equivalents of $8.1
million, compared to $6.4 million as of September 30, 2012, the Company's last fiscal
year end. Cash flow provided by operating activities for the six
months ended March 31, 2013 was
approximately $1.5 million,
compared to approximately $1.5
million used in operating activities for the six months
ended March 31, 2012, mainly due to
two factors: the $3.4 million
decrease in net loss and a $3.9
million increase in advances from customers. Depreciation
and amortization expenses were $0.31 million and $0.29 million for the six months ended
March 31, 2013 and 2012,
respectively. Cash flow provided by investing activities was
approximately $0.1 million for the
six months ended March 31, 2013,
compared to $0.08 million used in
investing activities for the six months ended March 31, 2012. This increase in cash inflow was
attributable to the $0.07 million
decrease in payments to purchase property and equipment and the
$0.1 million proceeds from collection
of due from related parties in the six months ended March 31, 2012.
Financial Outlook
For the fiscal year ending September 30,
2013, management expects revenues of $8.7 million to $11.0 million and net loss of
$1.0 million to $1.8 million.
Conference Call
The Company will host a conference call to discuss the financial
results for the six months ended March 31,
2013 at 8:00 a.m. EDT on
May 23, 2013.
To participate in the conference call, please dial any of the
following numbers:
USA Toll
Free:
|
877-407-9205
|
International:
|
201-689-8054
|
Conference ID
#:
|
415232
|
A replay of the call will be available until 11:59 PM EDT on May 25,
2013.
To access the replay, please dial any of the following
numbers:
USA Toll
Free:
|
877-660-6853
|
International:
|
201-612-7415
|
Replay Passcodes (both required for playback):
Account #:
|
286
|
Conference ID
#:
|
415232
|
About Kingtone Wirelessinfo Solution Holding Ltd
Kingtone Wirelessinfo Solution Holding Ltd (Nasdaq: KONE) is
a China-based software and solutions developer focused on
wirelessly enabling businesses and government agencies to more
efficiently manage their operations. The Company's products, known
as mobile enterprise solutions, extend a company's or enterprise's
information technology systems to include mobile participants. The
Company develops and implements mobile enterprise solutions for
customers in a broad variety of sectors and industries, and
improves efficiencies by enabling information management in
wireless environments. At the core of its many diverse packaged
solutions is proprietary middleware that enables wireless
interactivity across many protocols, devices and platforms.
For more information, please visit the Company's website at
http: www.kingtoneinfo.com. The Company routinely posts
important information on its website.
Safe Harbor Statements
This press release contains "forward-looking statements" within
the meaning of the Private Securities Litigation Reform Act of
1995, including certain plans, expectations, goals, and
projections, which are subject to numerous assumptions, risks, and
uncertainties. These forward-looking statements may include, but
are not limited to, statements containing words such as "may,"
"could," "would," "plan," "anticipate," "believe," "estimate,"
"predict," "potential," "expects," "intends", "future" and
"guidance" or similar expressions. These forward-looking statements
speak only as of the date of this press release and are subject to
change at any time. These forward-looking statements are based upon
management's current expectations and are subject to a number of
risks, uncertainties and contingencies, many of which are beyond
the Company's control that may cause actual results, levels of
activity, performance or achievements to differ materially from any
future results, levels of activity, performance or achievements
expressed or implied by such forward-looking statements. The
Company's actual results could differ materially from those
contained in the forward-looking statements due to a number of
factors, including those described under the heading "Risk Factors"
in the Company's Annual Report for the fiscal year ended
September 30, 2012 filed with the
Securities and Exchange Commission. The Company undertakes no
obligation to update or revise any forward-looking statements,
whether as a result of new information, future events or otherwise,
except as required under applicable law.
For investor and
media inquiries, please contact:
|
Yao Ti
|
Assistant to the
Chief Financial Officer
|
Tel:
+86-29-8826-6383
|
Email:
tiyao@kingtoneinfo.com
|
KINGTONE
WIRELESSINFO SOLUTION HOLDING LTD AND SUBSIDIARIES
|
CONSOLIDATED
BALANCE SHEETS
|
(Expressed in
thousands of U.S Dollars, except shares and per shares
data)
|
|
|
|
|
|
|
As of March 31,
|
|
As of September 30,
|
|
|
2013
|
|
2012
|
ASSETS
|
(Unaudited)
|
|
(Audited)
|
Current
assets
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
8,135
|
|
$
|
6,439
|
|
Accounts and notes
receivable, net of allowance
|
|
3,333
|
|
|
3,240
|
|
Unbilled
revenue
|
|
366
|
|
|
580
|
|
Amount due from
related companies
|
|
-
|
|
|
123
|
|
Inventories,
net
|
|
920
|
|
|
628
|
|
Other receivables and
prepayments
|
|
2,500
|
|
|
1,772
|
|
Current portion of
net investment in sales-type leases
|
|
977
|
|
|
1,210
|
|
Current portion of
long-term other receivables
|
|
1,439
|
|
|
1,393
|
|
Total Current
Assets
|
|
17,670
|
|
|
15,385
|
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
|
Property and
Equipment, net
|
|
13,370
|
|
|
13,541
|
|
Intangible assets,
net
|
|
628
|
|
|
633
|
|
Net investment in
sales-type leases, less current portion
|
|
604
|
|
|
333
|
|
Total
Assets
|
$
|
32,272
|
|
$
|
29,892
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
Accounts
payable
|
$
|
921
|
|
$
|
775
|
|
Advances from
customers
|
|
5,415
|
|
|
1,528
|
|
Other payables and
accruals
|
|
110
|
|
|
167
|
|
Taxes
payable
|
|
1,623
|
|
|
1,673
|
|
Amounts due to
related parties
|
|
71
|
|
|
2
|
|
Dividend
payable
|
|
824
|
|
|
817
|
|
Total Current
Liabilities
|
|
8,964
|
|
|
4,962
|
|
|
|
|
|
|
|
Stockholders'
equity
|
|
|
|
|
|
|
Ordinary share ($.01
par value, 100,000,000 shares authorized, 1,405,000 shares and
1,405,000 shares issued and outstanding as of March 31, 2013 and
September 30, 2012, respectively)
|
|
14
|
|
|
14
|
|
Additional paid in
capital
|
|
22,233
|
|
|
22,233
|
|
Appropriated retained
earnings
|
|
1,615
|
|
|
1,615
|
|
Unappropriated
accumulated deficit
|
|
(4,323)
|
|
|
(2,515)
|
|
Accumulated other
comprehensive income
|
|
3,768
|
|
|
3,583
|
|
Total
Stockholders' Equity
|
|
23,307
|
|
|
24,930
|
|
Total Liabilities
and Stockholders' Equity
|
$
|
32,272
|
|
$
|
29,892
|
|
|
|
|
|
|
|
KINGTONE
WIRELESSINFO SOLUTION HOLDING LTD AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
|
(Expressed in
thousands of U.S Dollars, except shares and per shares
data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
For the Six Months Ended March 31,
|
|
|
2013
|
|
2012
|
Revenues
|
|
|
|
|
|
|
Software
|
$
|
200
|
|
$
|
52
|
|
Wireless system
solution
|
|
2,784
|
|
|
1,127
|
|
- Related
party
|
|
-
|
|
|
31
|
|
-Third
Party
|
|
2,784
|
|
|
1,096
|
|
Total
revenues
|
|
2,984
|
|
|
1,179
|
Cost of
sales
|
|
|
|
|
|
|
Software
|
|
253
|
|
|
363
|
|
Wireless system
solution
|
|
2,290
|
|
|
1,018
|
|
Total cost of
sales
|
|
2,543
|
|
|
1,381
|
|
|
|
|
|
|
|
Gross profit
(loss)
|
|
441
|
|
|
(202)
|
|
|
|
|
|
|
|
Operating
expenses
|
|
|
|
|
|
|
Selling and marketing
expenses
|
|
266
|
|
|
434
|
|
General and
administrative expenses
|
|
1,747
|
|
|
4,351
|
|
Research and
development expenses
|
|
251
|
|
|
195
|
|
Total operating
expenses
|
|
2,264
|
|
|
4,980
|
Loss from
operations
|
|
(1,823)
|
|
|
(5,182)
|
|
|
|
|
|
|
|
Other income
(expenses)
|
|
|
|
|
|
|
Interest
income
|
|
48
|
|
|
57
|
|
Other expense,
net
|
|
(33)
|
|
|
(45)
|
|
Total other income,
net
|
|
15
|
|
|
12
|
Loss before income
tax expenses
|
|
(1,808)
|
|
|
(5,170)
|
|
Income tax
expenses
|
|
-
|
|
|
-
|
Net loss
|
|
(1,808)
|
|
|
(5,170)
|
Other comprehensive
income
|
|
|
|
|
|
|
Foreign currency
translation gain
|
|
1,185
|
|
|
1,223
|
Comprehensive
loss
|
$
|
(623)
|
|
$
|
(3,947)
|
|
|
|
|
|
|
|
Loss per ordinary
share:
|
|
|
|
|
|
|
Basic and
Diluted
|
$
|
(1.29)
|
|
$
|
(3.70)
|
|
|
|
|
|
|
|
Weighted average
number of ordinary shares outstanding
|
|
|
|
|
|
|
Basic and
Diluted
|
|
1,405,000
|
|
|
1,405,000
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KINGTONE
WIRELESSINFO SOLUTION HOLDING LTD AND SUBSIDIARIES
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
(Expressed in
thousands of U.S Dollars, except shares and per shares
data)
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Six Months
Ended March 31,
|
|
|
2013
|
|
2012
|
Cash flows from
operating activities
|
|
|
|
|
|
Net
loss
|
$
|
(1,808)
|
|
$
|
(5,170)
|
|
Depreciation and
amortization
|
|
308
|
|
|
291
|
|
Bad debt
expense
|
|
515
|
|
|
3,281
|
|
Share-based
compensation expense
|
|
1
|
|
|
2
|
|
|
|
|
|
|
|
Changes in operating
assets and liabilities
|
|
|
|
|
|
|
Accounts and notes
receivable
|
|
(582)
|
|
|
522
|
|
Unbilled
revenue
|
|
219
|
|
|
141
|
|
Other receivables and
prepayments
|
|
(711)
|
|
|
(890)
|
|
Inventories
|
|
(286)
|
|
|
(73)
|
|
Tax
payable
|
|
(64)
|
|
|
(55)
|
|
Accounts
payable
|
|
140
|
|
|
20
|
|
Advance from
customers
|
|
3,866
|
|
|
626
|
|
Other payables and
accruals
|
|
(68)
|
|
|
(112)
|
|
Net investment in
sales-type leases
|
|
(25)
|
|
|
(39)
|
Net cash provided
by (used in) operating activities
|
|
1,505
|
|
|
(1,456)
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
Payment to purchase
property and equipments
|
|
(14)
|
|
|
(82)
|
|
Proceeds from
disposal of office equipment
|
|
-
|
|
|
1
|
|
Proceeds from
collection of due from related companies
|
|
124
|
|
|
-
|
Net cash provided
by (used in) investing activities
|
|
110
|
|
|
(81)
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
Proceeds from
short-term loans due to related companies
|
|
69
|
|
|
-
|
Net cash provided
by financing activities
|
|
69
|
|
|
-
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash and cash
equivalents
|
|
12
|
|
|
201
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash and cash equivalents
|
|
1,696
|
|
|
(1,336)
|
|
Cash and cash
equivalents at beginning of year
|
|
6,439
|
|
|
8,749
|
|
Cash and cash
equivalents at end of year
|
$
|
8,135
|
|
$
|
7,413
|
|
|
|
|
|
|
|
Supplemental
disclosure of cash flow information
|
|
|
|
|
|
|
Interest
paid
|
$
|
-
|
|
$
|
-
|
|
Income taxes
paid
|
$
|
-
|
|
$
|
-
|
SOURCE Kingtone Wirelessinfo Solution Holding Ltd