WENZHOU, China, Dec. 10, 2018 /PRNewswire/ -- Hebron
Technology Co., Ltd. ("Hebron" or
the "Company") (Nasdaq: HEBT), a developer, manufacturer and
installer of valves and pipe fittings for use in the
pharmaceutical, biological, food and beverage, and other clean
industries, today announced its financial results for the six
months ended June 30, 2018.
Mr. Anyuan Sun, Chairman and Chief Executive Officer of
Hebron, commented, "With revenues
increasing by 33% to $10.33 million,
our first half financial results reflected the impact of more
projects being completed for our installation services during the
six months ended June 30, 2018. With
the multiple project wins and a growing project pipeline, we are
confident about our near-term outlook and expect further growth to
return in the near future."
Six Months Ended June 30, 2018
Financial Results
- Total revenues increased by 33% to $10.33 million for the six months ended
June 30, 2018, from $7.74 million for the six months ended
June 30, 2017. The increase in total
revenues was because of an increase in the number of projects and
average revenues per project for installation services and the
increased sales in fluid equipment sales.
- Gross and operating margins were 34% and (11)%, respectively,
for the six months ended June 30,
2018, compared to 37% and 2%, respectively, for the same
period of last year.
- Net loss was $1.57 million, or a
loss per share of $0.10 for the six
months ended June 30, 2018, compared
to net loss of $0.34 million, or loss
per share of $0.02, for the same
period of last year.
|
|
For the Six Months
Ended June 30,
|
($
millions)
|
|
2018
|
|
2017
|
|
%
Change
|
Revenues
|
|
|
|
|
|
|
Installation
service
|
|
7.58
|
|
6.35
|
|
19%
|
Fluid equipment
sales
|
|
2.75
|
|
1.39
|
|
98%
|
|
|
|
|
|
|
|
Gross
profit
|
|
3.55
|
|
2.87
|
|
24%
|
Gross
margin
|
|
34%
|
|
37%
|
|
(3)pp*
|
Installation
service
|
|
43%
|
|
41%
|
|
2pp*
|
Fluid equipment
sales
|
|
15%
|
|
21%
|
|
(6)pp*
|
|
|
|
|
|
|
|
Operating
expenses
|
|
4.68
|
|
2.7
|
|
73%
|
Operating income
(loss)
|
|
(1.12)
|
|
0.17
|
|
(779)%
|
Operating
margin
|
|
(11)%
|
|
2%
|
|
13pp*
|
Net loss
|
|
(1.57)
|
|
(0.34)
|
|
362%
|
Net loss
margin
|
|
(15)%
|
|
(4)%
|
|
(11)pp*
|
Basic and diluted
loss per share
|
|
(0.10)
|
|
(0.02)
|
|
400%
|
|
*pp represents
percentage points
|
Revenues
For the six months ended June 30,
2018, total revenues increased by $2.6 million, or 33%, to $10.3 million from $7.7
million for the same period of last year. The increase in
total revenues was related to the increase in revenues from
installation services as more works were completed during the six
months ended June 30, 2018, and well
as the increased sales in fluid equipment.
Revenues from installation services increased by $1.2 million, or 19.3%, to $7.6 million for the six months ended
June 30, 2018 from $6.4 million for the same period of last year. We
provided installation services for 3 projects with an average
project revenue of $2.5 million
during the six months ended June 30,
2018, compared to 3 projects with an average project revenue
of $2.1 million during the same
period of last year. Revenues from fluid equipment sales increased
by $1.4 million, or 98.0%, to
$2.7 million for the six months ended
June 30, 2018 from $1.4 million for the same period of last
year.
Cost of revenues and gross profit
Total cost of revenues increased by $1.9
million, or 39.1%, to $6.8
million for the six months ended June
30, 2018 from $4.9 million for
the same period of last year. Overall gross profit increased by
$0.7 million, or 23.9%, to
$3.6 million for the six months ended
June 30, 2018 from $2.9 million for the same period of last year.
Overall gross margin was 34% for the six months ended June 30, 2018, down 3 percentage points from 37%
for the same period of last year.
Cost of revenues for installation services increased by
$0.5 million, or 13.2%, to
$4.3 million for the six months ended
June 30, 2018 from $3.8 million for the same period of last year.
The increase in cost of revenues was in line with the increase in
revenues for installation services. Gross profit for installation
services increased by $0.7 million,
or 26.9%, to $3.3 million for the six
months ended June 30, 2018 from
$2.6 million for the same period of
last year. Gross margin for installation services was 43.4% for the
six months ended June 30, 2018,
compared to 40.6% for the same period of last year.
Cost of revenues for fluid equipment sales increased by
$1.2 million, or 109.1%, to
$2.3 million for the six months ended
June 30, 2018 from $1.1 million for the same period of last year.
Gross profit for fluid equipment sales increased by $0.1 million, or 33.3%, to $0.4 million for the six months ended
June 30, 2018 from $0.3 million for the same period of last year.
Gross margin for fluid equipment sales was 14.8% for the six months
ended June 30, 2018, compared to
21.4% for the same period of last year. The decreased gross margin
was due to the increased competition in equipment sales and because
the Company sold more products with lower margin in this
period.
Operating expenses
General and administrative expenses increased by $2.9 million, or 199.2%, to $4.4 million for the six months ended
June 30, 2018 from $1.5 million for the same period of last year.
The increase was mainly due to higher salaries for the management,
higher bad debt expense recorded for long aging advances to vendors
and higher amortization expense recorded for the new facilities.
Selling expenses were $0.3 million
for the six months ended June 30,
2018, compared to $0.7 million
for the same period of last year. Research and development expenses
were $NIL for the six months ended June 30,
2018, compared to $0.5 million
for the same period of last year. The decrease in research and
development expenses was mainly due to the lack of new R&D
projects for the six months ended June 30,
2018, while we had a R&D project for developing an
intelligent valve controller system during the six months ended
June 30, 2017. As such, total
operating expenses increased by $2.0
million, or 73.0%, to $4.7
million for the six months ended June
30, 2018 from $2.7 million for
the same period of last year.
Operating income (loss)
Operating loss was $1.1 million
for the six months ended June 30,
2018, decreased by $1.3
million, or 779.5%, compared to an operating income of
$0.2 million for the same period of
last year because of the increase in general and administrative
expenses. Operating margin was (11)% for the six months ended
June 30, 2018, compared to 2% for the
same period of last year.
Income (loss) before income taxes and income tax
Loss before income taxes was $1.2
million for the six months ended June
30, 2018, compared to income before income tax of
$0.1 million for the same period of
last year. Income tax provision was $0.4
million for the six months ended June
30, 2018, compared to $0.5
million for the same period of last year.
Net loss and loss per share
Net loss was $1.6 million, or loss
per share of $0.10 for the six months
ended June 30, 2018, compared to net
loss of $0.3 million, or loss per
share of $0.02 for the same period of
last year. The decrease in net earnings was primarily related to
the increase in operating expenses.
Recent Update
Acquisition of Xuzhou Weijia Bio-Tech Co., Ltd.
On March 10, 2018, the Company
entered into a share acquisition agreement (the "Agreement") with
the sole shareholder of Xuzhou Weijia Bio-Tech Co., Ltd. ("Weijia
Bio-Tech") and Weijia Bio-Tech to acquire 49% of the equity in
Weijia Bio-Tech. As consideration, the Company was obligated to
issue 1,442,778 unregistered Class A common shares (based on an
agreed value of $2.00 per share,
totalling $$2,885,556) to the individuals designated by the selling
shareholder of Weijia Bio-Tech. On or about April 11, 2018, the Company completed the process
of acquiring 49% of the equity in Weijia Bio-Tech. On
April 28, 2018, the Company completed
the issuance of 1,442,778 unregistered Class A common shares
pursuant to the Agreement, with an effective issuance date of
April 9, 2018.
About Hebron Technology Co., Ltd.
Established in January 2005 and
headquartered in Wenzhou City, Zhejiang
Province, China, Hebron
Technology Co., Ltd. ("Hebron" or
the "Company") engages in research, development, and manufacture of
highly specialized valves and pipe fitting products for use in the
pharmaceutical, biological, food and beverage, and other clean
industries. The Company also offers its customers comprehensive
pipeline design, installation, construction, and ongoing
maintenance services as holistic solution services. For more
information about the Company, please visit www.xibolun.com.
Forward-Looking Statements
This press release contains information about Hebron's view of its future expectations,
plans and prospects that constitute forward-looking
statements. Actual results may differ materially from
historical results or those indicated by these forward-looking
statements as a result of a variety of factors including, but not
limited to, risks and uncertainties associated with its ability to
raise additional funding, its ability to maintain and grow its
business, variability of operating results, its ability to maintain
and enhance its brand, its development and introduction of new
products and services, the successful integration of acquired
companies, technologies and assets into its portfolio of products
and services, marketing and other business development initiatives,
competition in the industry, general government regulation,
economic conditions, dependence on key personnel, the ability to
attract, hire and retain personnel who possess the technical skills
and experience necessary to meet the requirements of its clients,
and its ability to protect its intellectual property. Hebron
encourages you to review other factors that may affect its future
results in Hebron's registration
statement and in its other filings with the Securities and Exchange
Commission.
For more information, please contact:
In China:
Hebron Technology Co., Ltd.
Ms. Yingping Chen
Secretary
Phone: +86-180-6776-129
Email: IR@china-xbl.com
In the United
States:
Ascent Investor Relations LLC
Ms. Tina Xiao
Phone: +1-917-609-0333
Email: tina.xiao@ascent-ir.com
HEBRON TECHNOLOGY
CO., LIMITED
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(Unaudited)
|
|
|
June
30,
|
|
December
31,
|
|
2018
|
|
2017
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
Cash
|
$
|
884,436
|
|
$
|
3,220,781
|
Restricted
cash
|
|
1,475,918
|
|
|
55,322
|
Contracts receivable,
net
|
|
20,995,991
|
|
|
16,904,972
|
Accounts receivable,
net
|
|
723,124
|
|
|
1,419,305
|
Notes
receivable
|
|
-
|
|
|
689,171
|
Retainage
receivables, net
|
|
2,972,461
|
|
|
2,564,404
|
Inventories
|
|
5,424,902
|
|
|
1,582,501
|
Prepayments and
advances to suppliers, net
|
|
9,755,071
|
|
|
11,904,107
|
Other receivables,
net
|
|
229,898
|
|
|
240,284
|
|
|
|
|
|
|
TOTAL CURRENT
ASSETS
|
|
42,461,801
|
|
|
38,580,847
|
|
|
|
|
|
|
Long-term
investment
|
|
2,885,556
|
|
|
-
|
Property and
equipment at cost, net of accumulated depreciation
|
|
14,009,154
|
|
|
14,588,262
|
Land use right, net
of accumulated amortization
|
|
1,039,608
|
|
|
1,086,148
|
Deferred tax
assets
|
|
454,591
|
|
|
46,101
|
Prepayment on property and
equipment
|
|
-
|
|
|
247,324
|
TOTAL ASSETS
|
$
|
60,850,710
|
|
$
|
54,548,682
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
Short-term
loans
|
$
|
706,970
|
|
$
|
457,940
|
Accounts
payable
|
|
5,191,560
|
|
|
1,332,106
|
Accrued expenses and
other current liabilities
|
|
1,609,040
|
|
|
1,327,513
|
|
|
|
|
|
|
Other loan
payable-current
|
|
-
|
|
|
179,182
|
Advances from
customers
|
|
3,723,943
|
|
|
2,825,215
|
Taxes
payable
|
|
7,574,611
|
|
|
7,067,593
|
TOTAL CURRENT
LIABILITIES
|
|
18,806,124
|
|
|
13,189,549
|
|
|
|
|
|
|
|
|
|
|
|
|
Other loan payable -
long term
|
|
176,139
|
|
|
411,683
|
Long-term loans
|
|
404,693
|
|
|
414,912
|
TOTAL
LIABILITIES
|
|
19,386,956
|
|
|
14,016,144
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY:
|
|
|
|
|
|
Common stock, $0.001
par value, 50,000,000 shares authorized, 16,269,577 and
14,695,347
shares issued and outstanding as of June 30, 2018 and December 31,
2017, respectively
|
|
16,269
|
|
|
14,695
|
Additional paid-in
capital
|
|
13,270,947
|
|
|
10,237,965
|
Retained
earnings
|
|
28,308,385
|
|
|
29,877,491
|
Accumulated other
comprehensive gain (loss)
|
|
(131,847)
|
|
|
402,387
|
TOTAL
SHAREHOLDERS' EQUITY
|
|
41,463,754
|
|
|
40,532,538
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
$
|
60,850,710
|
|
$
|
54,548,682
|
HEBRON TECHNOLOGY
CO., LIMITED
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
|
(Unaudited)
|
|
|
For the Six Months
Ended June 30,
|
|
2018
|
|
2017
|
REVENUE
|
|
|
|
|
|
Installation
service
|
$
|
7,580,749
|
|
$
|
6,352,092
|
Fluid equipment
sales
|
|
2,754,317
|
|
|
1,391,348
|
|
|
10,335,166
|
|
|
7,743,440
|
COST OF
REVENUE
|
|
|
|
|
|
Cost of product and
services
|
|
6,655,247
|
|
|
4,769,712
|
Business and sales
related taxes
|
|
124,575
|
|
|
103,923
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
3,555,244
|
|
|
2,869,805
|
|
|
|
|
|
|
OPERATING
EXPENSES
|
|
|
|
|
|
General and
administrative expenses
|
|
4,396,710
|
|
|
1,469,722
|
Selling
expenses
|
|
281,169
|
|
|
749,522
|
Research and
development expenses
|
|
-
|
|
|
485,335
|
Total operating
expenses
|
|
4,677,879
|
|
|
2,704,579
|
|
|
|
|
|
|
INCOME (LOSS) FROM
OPERATIONS
|
|
(1,122,635)
|
|
|
165,226
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
|
Other income,
net
|
|
1,736
|
|
|
2,256
|
Interest
expense
|
|
(56,314)
|
|
|
(23,518)
|
Total other
expense, net
|
|
(54,578)
|
|
|
(21,262)
|
|
|
|
|
|
|
INCOME (LOSS)
BEFORE INCOME TAXES
|
|
(1,177,213)
|
|
|
143,964
|
|
|
|
|
|
|
PROVISION FOR
INCOME TAXES
|
|
391,892
|
|
|
487,298
|
|
|
|
|
|
|
NET
LOSS
|
$
|
(1,569,105)
|
|
$
|
(343,334)
|
|
|
|
|
|
|
OTHER
COMPREHENSIVE INCOME (LOSS)
|
|
|
|
|
|
Foreign currency
translation gain (loss)
|
|
(534,234)
|
|
|
800,457
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME (LOSS)
|
$
|
(2,103,339)
|
|
$
|
457,123
|
|
|
|
|
|
|
Basic and diluted
loss per common share
|
|
|
|
|
|
Basic and
diluted
|
$
|
(0.10)
|
|
$
|
(0.02)
|
|
|
|
|
|
|
Weighted average
number of shares outstanding
|
|
|
|
|
|
Basic and
diluted
|
|
15,427,622
|
|
|
14,695,347
|
View original
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SOURCE Hebron Technology Co., Ltd.