TELESTONE TECHNOLOGIES CORP - FORM 8-K - EX-99.1 - EXHIBIT 99.1 - January 6, 2014

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Exhibit 99.1

Telestone Technologies Corporation

 

Summary Consolidated Statements of Operations and Other Comprehensive Income (Unaudited)
Years ended December 31, 2012 and 2011

 

       Years ended December 31, 
       2012   2011 
      US$’000   US$’000 
Operating revenues:               
Net sales of equipment        23,153    39,281 
Service income        34,739    69,783 
                
Total operating revenues        57,892    109,064 
                
Cost of operating revenues:               
Cost of net sales        14,401    22,277 
Cost of service        19,570    38,282 
                
Total cost of operating revenues        33,971    60,559 
                
Gross profit        23,921    48,505 
                
Operating expenses:               
Sales and marketing        10,160    10,905 
General and administrative        34,096    15,132 
Research and development        2,038    2,313 
Depreciation and amortization        468    452 
                
Total operating expenses        46,762    28,802 
                
Operating income        (22,841)   19,703 
                
Interest expense        (1,212)   (1,124)
Other income, net        693    899 
                
Income before income taxes        (23,360)   19,478 
                
Income taxes       (1,085)   (4,552)
                
Net income        (24,445)   14,926 
                
Other comprehensive income               
Foreign currency translation adjustment        (471)   3,892 
                
Total comprehensive income        (24,916)   18,818 
                
Earnings per share:              
                
Weighted average number of common stock outstanding               
Basic        14,133,264    12,343,127 
Effect of dilutive warrants and stock options        -    8,582 
                
Diluted        14,133,264    12,351,709 
                
Net income per share of common stock        US$    US$ 
                
Basic        (1. 76)   1.21 
                
Diluted        (1.76)   1.21 

 

 

 
 

 

Telestone Technologies Corporation

 

Summary Consolidated Balance Sheets (Unaudited)
As of December 31, 2012 and 2011

 

       As of December 31, 
       2012   2011 
       US$’000   US$’000 
ASSETS               
              
Current assets:               
Cash and cash equivalents        8,536    18,850 
Accounts receivable, net of allowance        221,648    251,460 
Due from related parties        4,730    1,534 
Inventories, net of allowance        6,301    6,755 
Prepayment        1,897    2,351 
Other current assets        3,805    2,797 
                
Total current assets        246,917    283,747 
                
Goodwill        4,268    4,268 
Property, plant and equipment, net        13,194    9,264 
Lease prepayments, net        2,533    2,571 
permanent investment        2,013    - 
                
         22,008    16,103 
                
Total assets        268,925    299,850 
                
LIABILITIES AND STOCKHOLDERS’ EQUITY               
                
Current liabilities:               
Short-term bank loans        9,735    14,941 
Accounts payable – Trade        48,761    46,450 
Customer deposits for sales of equipment        669    2,684 
Due to related parties        1,714    1,831 
Income tax payable        19,678    18,695 
Accrued expenses and other accrued liabilities        72,908    72,483 
                
Total current liabilities        153,465    157,084 
                
Commitments and contingencies               
                
Stockholders’ equity:               
Preferred stock, US$0.001 par value, 10,000,000 shares authorized, no shares issued               
Common stock, US$0.001 par value:               
Authorized – 100,000,000 shares as of December 31, 2011 and 2010               
Issued and outstanding – 12,333,264 and 12,233,264 shares as of December 31, 2011 and 2010 respectively        12    12 
Additional paid-in capital        43,935    50,148 
Dedicated reserves        7,319    6,871 
Other comprehensive income        14,240    12,329 
Retained earnings        48,490    73,406 
                
Total stockholders’ equity        113,996    142,766 
Non-controlling interests        1,464    - 
                
Total liabilities and stockholders’ equity        268,925    299,850 

 

 

 
 

 

Telestone Technologies Corporation

 

Summary Consolidated Statements of Cash Flows (Unaudited)
As of December 31, 2012 and 2011

 

   Years ended December 31, 
   2012   2011 
   US$’000   US$’000 
Cash flows used in operating activities        
Net income   (27,440)   14,926 
Adjustments to reconcile net income to net cash used in operating activities:          
Depreciation and amortization   468    452 
Allowance for doubtful accounts   30,281    8,200 
Stock-based compensation   475    1,578 
Loss on disposal of property, plant and equipment, net   7    - 
Changes in assets and liabilities:          
Accounts receivable   (2,322)   (51,308)
Inventories   458    (2,463)
Due from related parties   (3,686)   540 
Prepayment   419    (28)
Other current assets   (1,090)   82 
Accounts payable   1,507    1,819 
Due to related parties   (429)   (2,492)
Customer deposits for sales of equipment   (2,533)   444 
Income tax payable   761    4,408 
Service cost payable, accrued expenses and other accrued liabilities   2,132    11,106 
           
Net cash used in operating activities   (992)   (12,736)
           
Cash flows used in investing activities          
Purchase of property, plant and equipment   (4,792)   (4,822)
Additions of long-term land lease prepayments   -    - 
Acquisition of a subsidiary   396    550 
Proceeds from disposal of property, plant and equipment   -    2 
           
Net cash used in investing activities   (4,396)   (4,270)
           
Cash flows from financing activities          
Issuance of common stock, net of issue costs   -    - 
Proceeds from short-term bank loans   9,736    18,086 
Repayment of short-term bank loans   (15,039)   (13,368)
           
Net cash provided by financing activities   (5,303)   4,718 
           
Net (decrease) increase in cash and cash equivalents   (10,691)   (12,288)
           
Cash and cash equivalents, beginning of year   18,850    31,020 
Effect on exchange rate changes   377    118 
           
Cash and cash equivalents, end of year   8,536    18,850 
           
Supplemental disclosure of cash flow information          
Interest received   68    34 
Interest paid   (914)   (766)
Income tax paid   (1,478)   (219)

 

 

 

 

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