WENZHOU, China, Dec. 29, 2017 /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, 2017.

Mr. Anyuan Sun, Chairman and Chief Executive Officer of Hebron, commented, "With revenues decreasing by 27.9% to $7.74 million, our first half financial results reflected the impact of fewer projects being completed for our installation services as the relocation of our manufacturing facility caused a temporary interruption to our business during the six months ended June 30, 2017. However, with recent multiple project wins and a growing project pipeline, we are confident about our near-term outlook and expect the growth to return in the near future."

Six Months Ended June 30, 2017 Financial Results

  • Total revenues decreased by 27.9% to $7.74 million for the six months ended June 30, 2017. The decrease in total revenues was due to a decrease in the number of projects and average revenues per project for installation services and partially offset by an increase in fluid equipment sales.
  • Gross and operating margins were 37.1% and 2.1%, respectively, for the six months ended June 30, 2017, compared to 38.2% and 27.0%, respectively, for the same period of last year.
  • Net loss was $0.34 million, or a loss per share of $0.02, for the six months ended June 30, 2017, compared to net income of $2.14 million, or earnings per share of $0.18, for the same period of last year.


For the Six Months Ended June 30,

($ millions)


2017


2016


% Change

Revenues


7.74


10.74


-27.9%

Installation service


6.35


9.82


-35.3%

Fluid equipment sales


1.39


0.92


50.8%








Gross profit


2.87


4.11


-30.1%

Gross margin


37.1%


38.2%


-1.2 pp*

Installation service


40.3%


40.0%


0.4 pp*

Fluid equipment sales


22.2%


20.0%


2.2 pp*








Operating income


0.17


2.90


-94.3%

Operating margin


2.1%


27.0%


-24.9 pp*

Net income (loss)


-0.34


2.14


-116.0%

Net income (loss) margin


-4.4%


20.0%


-24.4 pp*

Diluted earnings (loss) per share


-0.02


0.18


-113.1%


*pp represents percentage points

Revenues

For the six months ended June 30, 2017, total revenues decreased by $3.00 million, or 27.9%, to $7.74 million from $10.74 million for the same period of last year. The decrease in total revenues was related to a decrease in revenues from installation services as fewer projects were completed during the six months ended June 30, 2017.

Revenues from installation services decreased by $3.47 million, or 35.3%, to $6.35 million for the six months ended June 30, 2017 from $9.82 million for the same period of last year. We provided installation services for 3 projects with an average project revenue of $2.12 million during the six months ended June 30, 2017, compared to 4 projects with an average project revenue of $2.46 million during the same period of last year. Revenues from fluid equipment sales increased by $0.47 million, or 50.8%, to $1.39 million for the six months ended June 30, 2017 from $0.92 million for the same period of last year.

Cost of revenues and gross profit

Total cost of revenues decreased by $1.76 million, or 26.6%, to $4.87 million for the six months ended June 30, 2017 from $6.64 million for the same period of last year. Overall gross profit decreased by $1.24 million, or 30.1%, to $2.87 million for the six months ended June 30, 2017 from $4.11 million for the same period of last year. Overall gross margin was 37.1% for the six months ended June 30, 2017, down 1.2 percentage points from 38.2% for the same period of last year.

Cost of revenues for installation services decreased by $2.11 million, or 35.7%, to $3.79 million for the six months ended June 30, 2017 from $5.90 million for the same period of last year. The decrease in cost of revenues was in line with the decrease in revenues for installation services. Gross profit for installation services decreased by $1.36 million, or 34.7%, to $2.56 million for the six months ended June 30, 2017 from $3.92 million for the same period of last year. Gross margin for installation services was 40.3% for the six months ended June 30, 2017, compared to 40.0% for the same period of last year.

Cost of revenues for fluid equipment sales increased by $0.34 million, or 46.6%, to $1.08 million for the six months ended June 30, 2017 from $0.74 million for the same period of last year. Gross profit for fluid equipment sales increased by $0.12 million, or 67.5%, to $0.31 million for the six months ended June 30, 2017 from $0.18 million for the same period of last year. Gross margin for fluid equipment sales was 22.2% for the six months ended June 30, 2017, compared to 20.0% for the same period of last year.

Operating expenses

General and administrative expenses increased by $1.00 million, or 215.3%, to $1.47 million for the six months ended June 30, 2017 from $0.47 million for the same period of last year. The increase was mainly due to higher professional accounting and legal fees incurred during the six months ended June 30, 2017 associated with the Company's listing on NASDAQ. Selling expenses were $0.75 million for the six months ended June 30, 2017, compared to $0.72 million for the same period of last year. Research and development expenses were $0.49 million for the six months ended June 30, 2017, compared to $0.02 million for the same period of last year. The increase in research and development expenses was mainly due to increased R&D activities in developing the intelligent valve controller system during the six months ended June 30, 2017. As such, total operating expenses increased by $1.50 million, or 123.9%, to $2.70 million for the six months ended June 30, 2017 from $1.21 million for the same period of last year.

Operating income

Operating income decreased by $2.73 million, or 94.3%, to $0.17 million for the six months ended June 30, 2017 from $2.90 million for the same period of last year. The decrease in operating income was due to the combined effect of a decrease in revenues and an increase in operating expenses. Operating margin was 2.1% for the six months ended June 30, 2017, compared to 27.0% for the same period of last year.

Income before income taxes and income tax

Income before income taxes decreased by $2.74 million, or 95.0%, to $0.14 million for the six months ended June 30, 2017 from $2.89 million for the same period of last year. Income tax provision was $0.49 million for the six months ended June 30, 2017, compared to $0.74 million for the same period of last year.

Net income (loss) and earnings (loss) per share

Net loss was $0.34 million, or loss per share of $0.02, for the six months ended June 30, 2017, compared to net income of $2.14 million, or earnings per share of $0.18, for the same period of last year. The decrease in net earnings was primarily related to the decrease in revenues and, to a lesser extent, the increase in operating expenses.

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.

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:

At the Company
Yingping Chen, Secretary
Phone: +86-180-6776-3129

Investor Relations
Tony Tian, CFA                    
Weitian Group LLC
Email: tony.tian@weitian-ir.com
Phone: +1-732-910-9692

 

HEBRON TECHNOLOGY CO., LIMITED 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)




June 30,



December 31,




2017



2016


ASSETS


















CURRENT ASSETS:









Cash


$

3,610,585



$

11,875,893


Contracts receivable, net



13,293,350




12,928,033


Accounts receivable, net



265,002




187,852


Notes receivable



14,611




277,745


Retainage receivables, net



2,552,813




2,425,500


Inventories



3,775,477




2,249,623


Prepayments and advances to suppliers, net



9,024,485




4,537,823


Other receivables, net



618,977




96,602











TOTAL CURRENT ASSETS



33,155,300




34,579,071











Property and equipment at cost, net of accumulated depreciation



13,153,805




11,186,013


Land use right, net of accumulated amortization



1,070,006




1,071,310


Deferred tax assets



207,687




242,963











TOTAL  ASSETS


$

47,586,798



$

47,079,357











LIABILITIES AND SHAREHOLDERS' EQUITY


















CURRENT LIABILITIES:









Short-term loans


$

250,760



$

287,986


Accounts payable



1,221,616




1,185,215


Accrued expenses and other current liabilities



886,930




1,009,878


Advances from customers



2,997,590




3,060,962


Deferred revenue



877,095




1,042,511


Taxes payable



9,353,299




8,744,563


Due to related parties



-




68,397











TOTAL CURRENT LIABILITIES



15,587,290




15,399,512











Long-term loans



395,315




532,775











TOTAL LIABILITIES



15,982,605




15,932,287











COMMITMENTS AND CONTINGENCIES


















SHAREHOLDERS' EQUITY:









Common stock, $0.001 par value, 50,000,000 shares authorized,

14,695,347 and 14,695,347 shares issued and outstanding as of June 30,
2017 and December 31, 2016, respectively



14,695




14,695


Additional paid-in capital



10,237,965




10,237,965


Retained earnings



22,397,770




22,741,104


Accumulated other comprehensive loss



(1,046,237)




(1,846,694)











TOTAL SHAREHOLDERS' EQUITY



31,604,193




31,147,070











TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$

47,586,798



$

47,079,357


 

 

HEBRON TECHNOLOGY CO., LIMITED

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME

 (Unaudited)




For The Six Months Ended June 30,




2017



2016


REVENUE









 Installation service


$

6,352,092



$

9,820,436


 Fluid equipment sales



1,391,348




922,697





7,743,440




10,743,133


COST OF REVENUE









Cost of product and services



4,769,712




6,482,331


Business and sales related taxes



103,923




153,099











GROSS PROFIT



2,869,805




4,107,703











OPERATING EXPENSES









General and administrative expenses



1,469,722




466,192


Selling expenses



749,522




719,230


Research and development expenses



485,335




22,440


Total operating expenses



2,704,579




1,207,862











INCOME FROM OPERATIONS



165,226




2,899,841











OTHER INCOME (EXPENSE)









 Other income, net



2,256




283


 Interest expense



(23,518)




(12,114)


 Total other expense, net



(21,262)




(11,831)











INCOME BEFORE INCOME TAXES



143,964




2,888,010











PROVISION FOR INCOME TAXES



487,298




744,118











NET INCOME (LOSS)


$

(343,334)



$

2,143,892











OTHER COMPREHENSIVE INCOME (LOSS)









Foreign currency translation gain (loss)



800,457




(437,776)











COMPREHENSIVE INCOME


$

457,123



$

1,706,116











Basic and diluted earnings per common share









Basic


$

(0.02)



$

0.18


Diluted


$

(0.02)



$

0.18











Weighted average number of shares outstanding









Basic



14,695,347




12,000,000


Diluted



14,695,347




12,000,000


 

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SOURCE Hebron Technology Co., Ltd.


Source: Hebron Technology Co., Ltd.