omniture

Hebron Technology Co., Ltd. Reports Fiscal Year 2018 Financial Results

2019-05-16 05:00 10010

WENZHOU, China, May 15, 2019 /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 fiscal year ended December 31, 2018. 

Fiscal Year 2018 Financial Highlights



Year ended December 31,



Changes




2018



2017



($)



(%)


Revenue


$

25,290,060



$

29,200,445




(3,910,385)




(13)

%

Installation service



17,297,212




23,748,141




(6,450,929)




(27)

%

Fluid equipment sales



7,992,848




5,452,304




2,540,544




47

%


















Gross profit



7,577,952




10,444,161




(2,866,209)




(27)

%

(Loss) Income from operations



(5,329,410)




3,877,317




(9,206,727)




(238)

%

Net income



(5,144,715)




7,136,387




(12,281,102)




(172)

%

Basic and diluted EPS


$

(0.33)



$

0.49




(0.82)




(167)

%

 

  • Total revenues decreased by 13.0% to $25.29 million for the twelve months ended December 31, 2018.
  • Operating (loss) income decreased 237.5% to operation loss of $5.3 million for the twelve months ended December 31, 2018 from operation income of $4.07 million for the same period of the prior fiscal year, primarily due to bad debt provision of $7.9 million for the twelve months ended December 31, 2018.
  • Net loss was $5.14 million, for the twelve months ended December 31, 2018, compared to net income of $7.14 million for the same period of the prior fiscal year.

 





Years ended December 31,



Changes



Changes




2018



%



2017



%



($)



(%)


Installation service



6,356,004




37

%



9,470,074




40

%



(3,114,070)




(33)

%

Fluid equipment sales



1,221,948




15

%



974,087




18

%



247,861




25

%

Gross profit



7,577,952




30

%



10,444,161




36

%



(2,886,209)




(27)

%

 

Revenues

Total revenues decreased by 13.0% to $25.29 million for the twelve months ended December 31, 2018 mainly due to decreasing installation revenues. Revenue from installation service was $17.30 million for the year ended December 31, 2018, representing a 27% decrease from last year. Due to market competition, the Company had 6 major installation projects in fiscal 2018, comparing to 12 major installation projects in fiscal 2017 although the average individual contract amount increased from $2.0 million in fiscal 2017 to $2.6 million in fiscal 2018. Revenues from fluid equipment sales increased by 47% to $7.99 million for the twelve months ended December 31, 2018 due to increasing valve demands.

Cost of revenues and gross profit

Total cost of revenues decreased by $1.04 million to $17.71 million for the twelve months ended December 31, 2018, mainly due to decrease in the cost of installation service in fiscal 2018. For fiscal 2018, cost of installation service was $10.94 million representing a decrease of $3.3 million from 2017 due to lower installation service revenue, offset by an increase of $2.29 million in cost of fluid equipment sales.

Overall gross profit decreased by 27% or $2.89 million to $7.58 million for the twelve months ended December 31, 2018 from $10.44 million for the same period of the prior fiscal year. is the decrease was primarily due to gross profit from installation sales decreasing 33% in fiscal 2018 as compared to fiscal 2017.

Overall gross profit margin for fiscal 2018 was 30%, decreased from 36% in fiscal 2017. The gross profit margins for both of the Company's installation service and fluid equipment sales decreased by 3% from fiscal 2017.

Operating expenses

Total operating expenses increased by $6.3 million, or 96.6%, to $12.9 million for the twelve months ended December 31, 2018. The significant increase in operating expense was primarily due to $7.7 million increase in bad debt provision, which was offset by a decrease of $0.8 million in selling expense and a $0.4 million decrease in general and administrative expenses.

For fiscal 2018, the Company's general and administrative expenses were $3.30 million, representing an approximate decrease of $0.4 million compared to fiscal 2017. The decrease in general and administrative expenses was mainly due to the Company's lesser professional fees in fiscal 2018.

For fiscal 2018, the Company's research and development ("R&D") expenses were $0.36 million, representing a decrease of $0.15 million from fiscal 2017. The decrease in R&D expense was due to less R&D projects and devices in fiscal year 2018.

For fiscal 2018, the Company's selling expenses were $1.34 million, representing a 39% decrease from fiscal 2017. The decrease was mainly due to less revenue in fiscal 2018.

Operating (loss) income

Operating loss was $5.3 million for twelve months ended December 31, 2018, representing a decrease of 237% from operating income of $4.07 million in fiscal 2017, which was mainly due to less revenue and significant increase in operating expense during fiscal 2018.

Net income

Net loss was $5.14 million for the twelve months ended December 31, 2018, compared to net income of $7.14 million for fiscal 2017.

Financial Condition

As of December 31, 2018, the Company had cash and restricted cash balance of $3.07 million.

Net cash used in operating activities was approximately $0.73 million for the twelve months ended December 31, 2018, compared to net cash used in operating activities of $6.10 million for the same period of the prior fiscal year.

Net cash used in investing activities was approximately $0.12 million for fiscal 2018, compared to approximately $3.13 million for fiscal 2017.

Net cash provided by financing activities was approximately $0.73 million for fiscal 2018, compared to approximately $0.92 million for fiscal 2017.

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.

 

 

HEBRON TECHNOLOGY CO., LIMITED AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

 



December 31,



December 31,




2018



2017


ASSETS







CURRENT ASSETS:







Cash


$

947,588



$

3,220,781


Restricted Cash



2,124,655




55,322


Contracts receivable, net



24,669,365




16,904,972


Accounts receivable, net



2,655,845




1,419,305


Notes receivable



81,611




689,171


Retainage receivables, net



3,146,986




2,564,404


Inventories



365,480




1,582,501


Prepayments and advances to suppliers, net



3,568,003




11,904,107


Other receivables, net



767,681




240,284


Prepaid expenses and other current assets



94,539




-


TOTAL CURRENT ASSETS



38,421,753




38,580,847











Property and equipment at cost, net of accumulated depreciation



12,515,894




14,588,262


Land use right, net of accumulated amortization



969,339




1,086,148


Deposits for rent



43,633




46,101


Equity investment



3,054,090




-


Deferred tax assets



1,648,967




247,324











TOTAL ASSETS


$

56,653,676



$

54,548,682











LIABILITIES AND SHAREHOLDERS' EQUITY









CURRENT LIABILITIES:









Short-term loans


$

1,698,058



$

457,940


Notes Payable



2,117,382




55,322


Accounts payable



1,361,687




1,276,784


Accrued expenses and other current liabilities



2,112,472




1,327,513


Other loan payable - current



177,291




179,182


Advances from customers



3,131,338




2,825,215


Taxes payable



9,085,746




7,067,593


TOTAL CURRENT LIABILITIES



19,683,974




13,189,549











Other loan payable - long-term



212,351




411,683


Long-term loans



-




414,912











TOTAL LIABILITIES



19,896,325




14,016,144











COMMITMENTS AND CONTINGENCIES


















SHAREHOLDERS' EQUITY:









Common stock









Class A common stock, $0.001 par value, 40,000,000 shares authorized, 8,491,177 and 6,916,947 shares issued and outstanding as of December 31, 2018 and 2017, respectively



8,491




6,917


Class B common stock, $0.001 par value, 10,000,000 shares authorized, 7,778,400 shares issued and outstanding as of December 31, 2018 and 2017, respectively.



7,778




7,778


Additional paid-in capital



13,361,447




10,237,965


Retained earnings



24,732,776




29,877,491


Accumulated other comprehensive income (loss)



(1,353,141)




402,387


TOTAL SHAREHOLDERS' EQUITY



36,757,351




40,532,538











TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


$

56,653,676



$

54,548,682


 

HEBRON TECHNOLOGY CO., LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)  



For the Years Ended December 31,




2018



2017



2016


REVENUE










Installation service


$

17,297,212



$

23,748,141



$

24,299,062


Fluid equipment sales



7,992,848




5,452,304




2,798,774





25,290,060




29,200,445




27,097,836


COST OF REVENUE













Cost of product and services



17,458,252




18,080,777




16,192,810


Business and sales related taxes



253,856




675,507




443,448


GROSS PROFIT



7,577,952




10,444,161




10,461,578















OPERATING EXPENSES


























General and administrative expenses



3,298,188




3,683,594




932,911


Selling expenses



1,337,321




2,187,253




1,742,147


 Bad debt expenses (recovery)



7,913,442




187,715




(227,873)


Research and development expenses



358,411




508,282




33,847


Total operating expenses



12,907,362




6,566,844




2,481,032


(LOSS) INCOME FROM OPERATIONS



(5,329,410)




3,877,317




7,980,546















OTHER INCOME (EXPENSE)













Other income, net



(426,585)




377,174




6,431


Interest expense



(208,306)




(56,953)




(49,625)


 Income from investment



168,534




-




-


Total other (expense) income, net



(466,357)




320,221




(43,194)















(LOSS) INCOME BEFORE INCOME TAXES



(5,795,767)




4,197,538




7,937,352


(BENEFIT FROM) PROVISION FOR INCOME TAXES



(651,052)




(2,938,849)




2,002,467















NET (LOSS) INCOME


$

(5,144,715)



$

7,136,387



$

5,934,885















OTHER COMPREHENSIVE INCOME (LOSS)


























Foreign currency translation (loss) income



(1,755,528)




2,249,081




(1,401,124)















COMPREHENSIVE (LOSS) INCOME


$

(6,900,243)



$

9,385,468



$

4,533,761















Basic and diluted (loss) earnings per common share













Basic


$

(0.33)



$

0.49



$

0.49


Diluted


$

(0.33)



$

0.49



$

0.49















Weighted average number of shares outstanding













Basic



15,760,633




14,695,347




12,029,538


Diluted



15,760,633




14,695,347




12,046,045


 

HEBRON TECHNOLOGY CO., LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY



Class A

Common Stock



Class B

Common Stock



Additional
paid in



Retained



Accumulated
Other
Comprehensive







Shares



Amount



Shares



Amount



capital



Earnings



Income (Loss)



Total


Balance at January 1, 2016*



4,221,600



$

4,222




7,778,400



$

7,778



$

108,970



$

16,806,219



$

(445,570)



$

16,481,619


Issuance Class A shares - IPO



2,695,347




2,695




-




-




10,128,995




-




-




10,131,690


Net income











-




-




-




5,934,885




-




5,934,885


Foreign currency translation loss











-




-




-




-




(1,401,124)




(1,401,124)


Balance at December 31, 2016



6,916,947




6,917




7,778,400




7,778




10,237,965




22,741,104




(1,846,694)




31,147,070



































Net income



-




-




-




-




-




7,136,387




-




7,136,387


Foreign currency translation income



-




-




-




-




-








2,249,081




2,249,081


Balance at December 31, 2017



6,916,947




6,917




7,778,400




7,778




10,237,965




29,877,491




402,387




40,532,538



































Net loss



-




-




-




-




-




(5,144,715)




-




(5,144,715)


Foreign currency translation loss



-




-




-




-




-




-




(1,755,528)




(1,755,528)


Issuance of class A common stock for consulting services



131,452




131




-




-




239,369




-




-




239,500


Issuance of class A common stock for equity investment



1,442,778




1,443




-




-




2,884,113




-




-




2,885,556


Balance at December 31, 2018



8,491,177



$

8,491




7,778,400



$

7,778



$

13,361,447



$

24,732,776



$

(1,353,141)



$

36,757,351


 

* Retrospectively adjusted the reclassification of the Company's common stock (see Note 14)


 

HEBRON TECHNOLOGY CO., LIMITED AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS



For the Years Ended December 31,




2018



2017



2016


CASH FLOWS FROM OPERATING ACTIVITIES:










Net income (loss)


$

(5,144,715)



$

7,136,387



$

5,934,885


Adjustments to reconcile net income to net cash provided by (used in) operating activities:













Depreciation and amortization



1,195,161




939,995




517,402


Loss on disposition of property and equipment



283,487




12,179




228,245


Deferred tax expense (benefit)



(1,471,938)




11,526




56,968


Bad debt expense (recovery)



7,913,442




187,715




(227,873)


Changes in operating assets and liabilities:













Contracts receivable



(9,019,036)




(2,992,867)




(5,893,527)


Accounts receivable



(1,383,452)




(950,850)




922,611


Notes receivable



593,674




(378,205)




(85,107)


Retainage receivables



(748,903)




(80,360)




(548,357)


Prepayment and advances to suppliers



93,149




(7,127,018)




(2,861,600)


Inventories



1,177,956




788,000




427,878


Other receivables



(598,764)




(156,074)




(1,535)


Accounts payable



146,546




26,450




(290,717)


Notes Payable



2,148,292




53,272




-


Advances from customers



429,217




(370,964)




528,193


Deferred revenue



-




(1,071,355)




3,161


Taxes payable



2,770,253




(2,365,120)




2,484,264


Accrued expenses and other current liabilities



890,551




240,505




382,410


NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES



(725,080)




(6,096,784)




1,577,301















CASH FLOWS FROM INVESTING ACTIVITIES:













Acquisitions of property and equipment



(74,210)




(3,126,777)




(7,667)


Payments for intangible assets



(41,000)




-




-


Payments for construction in progress



-




-




(973,254)


NET CASH (USED IN) INVESTING ACTIVITIES



(115,210)




(3,126,777)




(980,921)















CASH FLOWS FROM FINANCING ACTIVITIES:













Proceeds from short-term bank loans



1,995,763




295,954




301,019


Repayment of short-term bank loans



(1,088,667)




-




(795,443)


Proceeds from long-term loans



-




173,873




556,885


Repayment of long-term loans



-




(47,353)




-


Repayment/Proceeds from other loan



(176,427)




582,205




-


Repayment of other loan



-




(21,457)




-


Repayment of (proceeds from) related parties



-




(66,582)




72,009


Proceeds from issuance of shares in IPO



-




-




10,131,690


NET CASH PROVIDED BY FINANCING ACTIVITIES



730,669




916,640




10,266,160















EFFECT OF EXCHANGE RATE CHANGE ON CASH



(94,239)




(292,869)




(104,290)


NET (DECREASE) INCREASE IN CASH



(203,860)




(8,599,790)




10,758,250


CASH AND RESTRICTED CASH-beginning of year



3,276,103




11,875,893




1,117,643















CASH AND RESTRICTED CASH-end of year


$

3,072,243



$

3,276,103



$

11,875,893















SUPPLEMENTAL CASH FLOW DISCLOSURES:













Cash paid for income taxes


$

42,250



$

-



$

-


Cash paid for interest


$

91,917



$

75,704



$

50,705















Non-cash financing activities













Warrants issued to placement agent in connection with the Company's IPO


$

-



$

-



$

488,730


Issuance of shares for consulting services


$

239,500



$

-



$

-


Issuance of shares for equity investment


$

2,885,556



$

-



$

-


 

Cision View original content:http://www.prnewswire.com/news-releases/hebron-technology-co-ltd-reports-fiscal-year-2018-financial-results-300851052.html

Source: Hebron Technology Co., Ltd.
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