WENZHOU, China, April 27, 2018 /PRNewswire/ -- Hebron Technology Co., Ltd. ("Hebron" or the "Company") 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, 2017.

Mr. Anyuan Sun, Chairman and Chief Executive Officer of Hebron, commented, "We are glad to see our continuing efforts on marketing and R&D have paid off in the second half of fiscal year 2017, resulting in a profitable year for us with a revenue increase of 7.8% and a net income increase of 20.2%. We believe our efforts have markedly improved the quality of our products and services. Further, we have developed greater access to our most desired clientele and have emphasized contracts that afford us greater opportunity to scale. Our fiscal year 2017 performance is in line with our internal expectations, and we look forward to creating long term shareholder value in the years ahead."

Fiscal Year 2017 Financial Highlights

• Total revenues increased by 7.8% to $29.20 million for the twelve months ended December 31, 2017. The increase in total revenues was primarily due to an increase in revenues from sales of fluid equipment related to an increase in Valve demand resulting from our efforts to expand sales network and increase marketing activities.
• Gross and operating margins were 35.8% and 13.3%, respectively, for the twelve months ended December 31, 2017, compared to 38.6% and 29.5%, respectively, for the same period of the prior fiscal year. 
• Net income was $7.14 million, or earnings per share of $0.49, for the twelve months ended December 31, 2017, compared to net income of $5.93 million, or earnings per share of $0.49, for the same period of the prior fiscal year.

Fiscal Year 2017 Financial Results

Revenues

For the twelve months ended December 31, 2017, total revenues increased by $2.10 million, or 7.8%, to $29.20 million from $27.10 million for the same period of the prior fiscal year. The increase in total revenues was primarily due to an increase in revenues from sales of fluid equipment related to an increase in Valve demand resulting from our efforts to expand sales network and increase marketing activities.

Revenues from installation services decreased by $0.55 million, or 2.3%, to $23.75 million for the twelve months ended December 31, 2017 from $24.30 million for the same period of the prior fiscal year. The decrease in revenues from installation services was due to a decrease in contract amount during fiscal year 2017. The Company provided installation services for 12 projects with an average project revenue of $2.0 million during the twelve months ended December 31, 2017, compared to 10 projects with an average project revenue of $2.4 million during the same period of the prior fiscal year. Revenues from fluid equipment sales increased by $2.65 million, or 94.8%, to $5.45 million for the twelve months ended December 31, 2017 from $2.80 million for the same period of the prior fiscal year.

Cost of revenues and gross profit

Total cost of revenues increased by $2.12 million, or 12.7%, to $18.76 million for the twelve months ended December 31, 2017 from $16.64 million for the same period of the prior fiscal year. Overall gross profit decreased by $0.02 million, or 0.2%, to $10.44 million for the twelve months ended December 31, 2017 from $10.46 million for the same period of the prior fiscal year. Overall gross margin decreased by 2.8 percentage points to 35.8% for the twelve months ended December 31, 2017, compared to 38.6% for the same period of the prior fiscal year.

Cost of revenues for installation services decreased by $0.09 million, or 0.6%, to $14.28 million for the twelve months ended December 31, 2017 from $14.36 million for the same period of the prior fiscal year. The decrease in cost of revenues for installation services was in line with the decrease in revenues for installation services for fiscal year 2017. Gross profit for installation services decreased by $0.47 million, or 4.7%, to $9.47 million for the twelve months ended December 31, 2017 from $9.94 million for the same period of the prior fiscal year. Gross margin for installation services was 39.9% for the twelve months ended December 31, 2017, compared to 40.9% for the same period of the prior fiscal year.

Cost of revenues for fluid equipment sales increased by $2.21 million, or 97.0%, to $4.48 million for the twelve months ended December 31, 2017 from $2.72 million for the same period of the prior fiscal year. The increase in cost of revenues for fluid equipment sales was consistent with the 95.0% increase in the fluid equipment sales in fiscal year 2017. Gross profit for fluid equipment sales increased by $0.45 million, or 85.2%, to $0.97 million for the twelve months ended December 31, 2017 from $0.53 million for the same period of the prior fiscal year. Gross margin for fluid equipment sales was 17.9% for the twelve months ended December 31, 2017, compared to 18.8% for the same period of the prior fiscal year.

Operating expenses

General and administrative expenses increased by $3.17 million, or 449.1%, to $3.87 million for the twelve months ended December 31, 2017 from $0.71 million for the same period of the prior fiscal year. The increase in general and administrative expenses was mainly due to the Company's incurring approximately $0.8 million in expenses for consulting related to the acquisition of new technology for improving its manufacturing and installation processes, and approximately $0.8 million in expenses for consulting related to mergers and acquisitions. In addition, bad debt expenses increased $0.4 million due to advances to vendors and other receivables, and investor relations and NASDAQ fees increased $0.13 million due to the Company's listing on NASDAQ in December 2016. In addition, conference expenses increased $0.22 million due to the Company's personnel attending oversea exhibitions.

Selling expenses increased by $0.45 million, or 25.6%, to $2.19 million for the twelve months ended December 31, 2017 from $1.74 million for the same period of the prior fiscal year. The increase in selling expenses was mainly due to more marketing activities incurred after the Company listed on Nasdaq in December 2016.

Research and development expenses increased by $0.47 million, or 1,401.7%, to $0.51 million for the twelve months ended December 31, 2017 from $0.03 million for the same period of the prior fiscal year. The increase in research and development expense was due to an increase in the investment on research and development activities in developing intellectual valve controller system.

As such, total operating expenses increased by $4.09 million, or 164.7%, to $6.57 million for the twelve months ended December 31, 2017 from $2.48 million for the same period of the prior fiscal year.

Operating income

Operating income decreased by $4.10 million, or 51.4%, to $3.88 million for the twelve months ended December 31, 2017 from $7.98 million for the same period of the prior fiscal year. Operating margin was 13.3% for the twelve months ended December 31, 2017, compared to 29.5% for the same period of the prior fiscal year.

Income before income taxes and income tax

Income before income taxes decreased by $3.74 million, or 47.1%, to $4.20 million for the twelve months ended December 31, 2017 from $7.94 million for the same period of the prior fiscal year. Income tax recovery was $2.94 million for the twelve months ended December 31, 2017, compared to an income tax provision of $2.00 million for the same period of the prior fiscal year.

Net income and earnings per share

Net income was $7.14 million, or earnings per share of $0.49, for the twelve months ended December 31, 2017, compared to net income of $5.93 million, or earnings per share of $0.49, for the same period of the prior fiscal year.

Financial Condition

As of December 31, 2017, the Company had cash and cash equivalents of $3.22 million, compared to $11.88 million as of December 31, 2016. Net cash used in operating activities was $6.10 million for the twelve months ended December 31, 2017, compared to net cash provided by operating activities of $1.58 million for the same period of the prior fiscal year. Net cash used in investing activities was $3.13 million for the twelve months ended December 31, 2017, compared to $0.98 million for the same period of the prior fiscal year. Net cash provided by financing activities was $0.86 million for the twelve months ended December 31, 2017, compared to $10.27 million for the same period of the prior fiscal year.

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: +86-180-6776-3129

In the United States:

Ascent Investor Relations LLC

Ms. Tina Xiao

Phone: +1-917-609-0333

Email: tina.xiao@ascent-ir.com

 

 

 

 

 

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SOURCE Hebron Technology Co., Ltd.