Kingtone Wirelessinfo Solution Holding Ltd Reports The First Six Months of Fiscal Year 2013 Unaudited Financial Results

  Kingtone Wirelessinfo Solution Holding Ltd Reports The First Six Months of
                 Fiscal Year 2013 Unaudited Financial Results

Revenues in the First Six Months of FY2013 Up 153.1% to $3.0 Million from the
First Six Months of FY2012

Gross Profits in the First Six Months of FY2013 Up 318.3% to $0.4 Million from
the First Six Months of FY2012

Basic and Diluted Loss Per Share of $1.29 in the First Six Months of FY2013 Up
$2.41 from Loss Per Share of $3.70* in the First Six Months of FY2012

* The number retrospectively reflected the effect from a 1-for-10 reverse
split effective November 6, 2012. The same applies to the number of shares
outstanding as of March 31, 2012 stated in the later content herein.

PR Newswire

XI'AN, China, May 22 2013

XI'AN, China, May 22 2013 /PRNewswire-FirstCall/ --Kingtone Wirelessinfo
Solution Holding Ltd (Nasdaq: KONE) ("Kingtone", "we" or the "Company"), a
China-based developer and provider of mobile enterprise solutions, today
announced financial results for the six months ended March 31, 2013. The
financial statements and other financial information included in this press
release are prepared in conformity with accounting principles generally
accepted in the United States of America ("U.S. GAAP").

Financial Highlights for the Six Months Ended March 31, 2013:

  oRevenues increased 153.1% to $3.0 million from $1.2 million for the six
    months ended March 31, 2012.
  oGross profit increased 318.3% to $0.4 million from minus $0.2 million for
    the six months ended March 31, 2012.
  oGross margin increased to 14.8% from minus 17.1% for the six months ended
    March 31, 2012.
  oNet loss decreased to approximately $1.8 million from approximately $5.2
    million for the six months ended March 31, 2012.
  oBasic and diluted loss per share was $1.29 for the six months ended March
    31, 2013 compared to basic and diluted loss per share of $3.70 for the six
    months ended March 31, 2012. Weighted average shares outstanding for the
    six months ended March 31, 2013 remained unchanged at 1,405,000*.

"Although it is a gradual process, I am glad to see our business is
recovering," said Mr. Peng Zhang, Chief Executive Officer. "We believe that
our business will grow slowly but steadily, and hope our investors will remain
patient with our business and capital market performance.It is clear that the
current economic environment presents a series of challenges and
opportunities. Ultimately, we believe that client demand for our products and
services will be the main force in driving our performance."

Results of Operations – For the Six Months Ended March 31, 2013 Compared to
the Six Months Ended March 31, 2012

Net Revenues

The Company's revenues increased by 153.1% to $3.0million for the six months
ended March 31, 2013, as compared to $1.2 million for the six months ended
March 31, 2012.

Revenues from software solutions increased by 284.6% to $0.2million in the
six months ended March 31, 2013, compared to $0.05million in the six months
ended March 31, 2012. As a percentage of total revenue, software solutions
sales increased from 4.4% to 6.7%. The increase in our software solutions
revenue was mainly due to the fact that the Company has signed contracts for
larger value amounts in the six months ended March 31, 2013 than those signed
in the six months ended March 31, 2012.

Revenues from wireless system solutions increased by 147.0% to $2.8 million in
the six months ended March 31, 2013, compared to $1.1 million in the six
months ended March 31, 2012. As a percentage of total revenue, wireless system
solution sales decreased from 95.6% to 93.3% of our total revenue. The
increase in revenue from wireless system solutions was mainly attributable to
revenue recognition from the contracts signed in earlier periods.

Cost of Sales

Cost of sales increased by 84.1% to approximately $2.5 million for the six
months ended March 31, 2013 from approximately $1.4 million for the six months
ended March 31, 2012. As a percentage of our total revenues, cost of sales
decreased from 117.1% of our total revenues for the six months ended March 31,
2012 to 85.2% of our total revenues for the six months ended March 31, 2013.
The increase in our cost of sales was proportional to the increase in sales
for the six months ended March 31, 2013.

Cost of sales for software solutions decreased by 30.3% to approximately $0.3
million for the six months ended March 31, 2013, compared to approximately
$0.4 million for the six months ended March 31, 2012. This represented 9.9%
and 26.3% of the total cost of sales, and 126.5% and 698.1% of software
solutions revenue, for the six months ended March 31, 2013 and 2012,
respectively.

Cost of sales for wireless system solutions increased by 125.0%, from
approximately $1.0 million for the six months ended March 31, 2012 to
approximately $2.3 million for the six months ended March 31, 2013. This
represented 90.1% and 73.7% of the total cost of sales, and 82.3% and 90.3% of
wireless system solution revenues, for the six months ended March 31, 2013 and
2012, respectively.

Gross Profit and Gross Margin

In the six months ended March 31, 2013, gross profit increased by 318.3% to
$0.4million from minus $0.2 million in the six months ended March 31, 2012.
Gross margin for the six months ended March 31, 2013 was 14.8%, compared to
minus 17.1% in the six months ended March 31, 2012. This increase of gross
profit and gross margin was primarily due to the relatively higher profit
margin in the contracts we signed in the six months ended March 31, 2013
compared to those signed inthe six months ended March 31, 2012.

Gross profit from software solutions increased by 83.0% for the six months
ended March 31, 2013, from minus $0.3 million to minus $0.05 million, and
gross margin increased to minus 26.5% from minus 598.1% in the six months
ended March 31, 2012. Gross profit from wireless system solutions increased by
353.2% for the six months ended March 31, 2013, from $0.11 million to $0.5
million, and gross margin increased to 17.7% from 9.7% in the six months ended
March 31, 2012.

Operating Expenses

Total operating expenses for the six months ended March 31, 2013 were $2.3
million, compared to $5.0 million for the six months ended March 31, 2012,
representinga decrease of 54.5%.

Selling and marketing expenses decreased by 38.7% to $0.27million in the six
months ended March 31, 2013, compared to $0.43 million for the six months
ended March 31, 2012, and represented 8.9% and 36.8% of revenues for the six
months ended March 31, 2013 and 2012, respectively. The decrease in sales and
marketing expenses was a direct result of the Company's decision to close the
representative offices in Tibet and Yan'An to reduce expenses.

General and administrative expenses were approximately $1.7million in the six
months ended March 31, 2013, a decrease of 59.8% from $4.4 million in the six
months ended March 31, 2013, and represented 58.5% and 369.0% of revenues for
the six months ended March 31, 2013 and 2012, respectively. The significant
decrease in general and administrative expenses was primarily due to the fact
that bad debt expenses were only $0.5 million in the six months ended March
31, 2013, compared to approximately $3.3 million in the six months ended March
31, 2012.

Research and development expenses were approximately $0.25million in the six
months ended March 31, 2013, an increase of 28.7% from $0.20 million in the
six months ended March 31, 2012, and represented 8.4% and 16.5% of revenues
for the six months ended March 31, 2013 and 2012, respectively.

Loss from Operations

The Company had loss from operations of $1.8million in the six months ended
March 31, 2013, compared to loss from operations of $5.2 million in the six
months ended March 31, 2012, a decrease of $3.4 million, or 64.8%, primarily
due to increases in revenues from software solutions and wireless system
solutions compounded by a decrease in operating expenses. Operating margins
for the six months ended March 31, 2013 and 2012 were minus 61.1% and minus
439.5%, respectively.

Net Loss and EPS

Net loss was $1.8 million during the six months ended March 31, 2013, compared
to net loss of $5.2 million in the six months ended March 31, 2012, a decrease
of $3.4 million, or 65.0%.Net loss as a percentage of total net revenues were
minus 60.6% and minus 438.5% for the six months ended March 31, 2013 and 2012,
respectively. Basic and diluted loss per share was $1.29 in the six months
ended March 31, 2013, compared to basic and diluted loss per share of $3.70 in
the prior year period. The number of weighted average common shares
outstanding for the six months ended March 31, 2013 remained unchanged at
1,405,000.

Liquidity and Capital Resources

Cash and Cash Equivalents

As of March 31, 2013, the Company had cash and cash equivalents of $8.1
million, compared to $6.4million as of September 30, 2012, the Company's last
fiscal year end. Cash flow provided by operating activities for the six months
ended March 31, 2013 was approximately $1.5million, compared to approximately
$1.5 million used in operating activities for the six months ended March 31,
2012, mainly due to two factors: the $3.4 million decrease in net loss and a
$3.9 million increase in advances from customers. Depreciation and
amortization expenses were $0.31million and $0.29 million for the six months
ended March 31, 2013 and 2012, respectively. Cash flow provided by investing
activities was approximately $0.1 million for the six months ended March 31,
2013, compared to $0.08 million used in investing activities for the six
months ended March 31, 2012. This increase in cash inflow was attributable to
the $0.07 million decrease in payments to purchase property and equipment and
the $0.1 million proceeds from collection of due from related parties in the
six months ended March 31, 2012.

Financial Outlook

For the fiscal year ending September 30, 2013, management expects revenues of
$8.7 million to $11.0 million and net loss of $1.0 million to $1.8 million.

Conference Call

The Company will host a conference call to discuss the financial results for
the six months ended March 31, 2013 at 8:00 a.m. EDT on May 23, 2013.

To participate in the conference call, please dial any of the following
numbers:

USA Toll Free:   877-407-9205
International:   201-689-8054
Conference ID #: 415232

A replay of the call will be available until 11:59 PM EDT on May 25, 2013.

To access the replay, please dial any of the following numbers:

USA Toll Free: 877-660-6853
International: 201-612-7415

Replay Passcodes (both required for playback):

Account #:       286
Conference ID #: 415232

About Kingtone Wirelessinfo Solution Holding Ltd

Kingtone Wirelessinfo Solution Holding Ltd (Nasdaq: KONE) is aChina-based
software and solutions developer focused on wirelessly enabling businesses and
government agencies to more efficiently manage their operations. The Company's
products, known as mobile enterprise solutions, extend a company's or
enterprise's information technology systems to include mobile participants.
The Company develops and implements mobile enterprise solutions for customers
in a broad variety of sectors and industries, and improves efficiencies by
enabling information management in wireless environments. At the core of its
many diverse packaged solutions is proprietary middleware that enables
wireless interactivity across many protocols, devices and platforms.

For more information, please visit the Company's website at
http:www.kingtoneinfo.com. The Company routinely posts important information
on its website.

Safe Harbor Statements

This press release contains "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995, including certain plans,
expectations, goals, and projections, which are subject to numerous
assumptions, risks, and uncertainties. These forward-looking statements may
include, but are not limited to, statements containing words such as "may,"
"could," "would," "plan," "anticipate," "believe," "estimate," "predict,"
"potential," "expects," "intends", "future" and "guidance" or similar
expressions. These forward-looking statements speak only as of the date of
this press release and are subject to change at any time. These
forward-looking statements are based upon management's current expectations
and are subject to a number of risks, uncertainties and contingencies, many of
which are beyond the Company's control that may cause actual results, levels
of activity, performance or achievements to differ materially from any future
results, levels of activity, performance or achievements expressed or implied
by such forward-looking statements. The Company's actual results could differ
materially from those contained in the forward-looking statements due to a
number of factors, including those described under the heading "Risk Factors"
in the Company's Annual Report for the fiscal year ended September 30, 2012
filed with the Securities and Exchange Commission. The Company undertakes no
obligation to update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise, except as required
under applicable law.

For investor and media inquiries, please contact:
Yao Ti
Assistant to the Chief Financial Officer
Tel: +86-29-8826-6383
Email: tiyao@kingtoneinfo.com





KINGTONE WIRELESSINFO SOLUTION HOLDING LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Expressed in thousands of U.S Dollars, except shares and per shares data)
                                          AsofMarch31,  AsofSeptember30,
                                          2013             2012
ASSETS                                    (Unaudited)      (Audited)
Current assets
 Cash and cash equivalents                $    8,135       $      6,439
 Accounts and notes receivable, net of         3,333              3,240
 allowance
 Unbilled revenue                              366                580
 Amount due from related companies             -                  123
 Inventories, net                              920                628
 Other receivables and prepayments             2,500              1,772
 Current portion of net investment in          977                1,210
 sales-type leases
 Current portion of long-term other            1,439              1,393
 receivables
 Total Current Assets                          17,670             15,385
Non-current assets
 Property and Equipment, net                   13,370             13,541
 Intangible assets, net                        628                633
 Net investment in sales-type leases,          604                333
 less current portion
 Total Assets                             $    32,272      $      29,892
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
 Accounts payable                         $    921         $      775
 Advances from customers                       5,415              1,528
 Other payables and accruals                   110                167
 Taxes payable                                 1,623              1,673
 Amounts due to related parties                71                 2
 Dividend payable                              824                817
 Total Current Liabilities                     8,964              4,962
Stockholders' equity
 Ordinary share ($.01 par value,
 100,000,000 shares authorized, 1,405,000
 shares and 1,405,000 shares issued and        14                 14
 outstanding as of March 31, 2013 and
 September 30, 2012, respectively)
 Additional paid in capital                    22,233             22,233
 Appropriated retained earnings                1,615              1,615
 Unappropriated accumulated deficit            (4,323)            (2,515)
 Accumulated other comprehensive income        3,768              3,583
 Total Stockholders' Equity                    23,307             24,930
 Total Liabilities and Stockholders'      $    32,272      $      29,892
 Equity



KINGTONE WIRELESSINFO SOLUTION HOLDING LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Expressed in thousands of U.S Dollars, except shares and per shares data)
(Unaudited)
                                            FortheSixMonthsEndedMarch31,
                                            2013               2012
Revenues
 Software                                   $   200            $   52
 Wireless system solution                       2,784              1,127
 - Related party                                -                  31
 -Third Party                                   2,784              1,096
 Total revenues                                 2,984              1,179
Cost of sales
 Software                                       253                363
 Wireless system solution                       2,290              1,018
 Total cost of sales                            2,543              1,381
Gross profit (loss)                             441                (202)
Operating expenses
 Selling and marketing expenses                 266                434
 General and administrative expenses            1,747              4,351
 Research and development expenses              251                195
 Total operating expenses                       2,264              4,980
Loss from operations                            (1,823)            (5,182)
Other income (expenses)
 Interest income                                48                 57
 Other expense, net                             (33)               (45)
 Total other income, net                        15                 12
Loss before income tax expenses                 (1,808)            (5,170)
 Income tax expenses                            -                  -
Net loss                                        (1,808)            (5,170)
Other comprehensive income
 Foreign currency translation gain              1,185              1,223
Comprehensive loss                          $   (623)          $   (3,947)
Loss per ordinary share:
 Basic and Diluted                          $   (1.29)         $   (3.70)
Weighted average number of ordinary shares
outstanding
 Basic and Diluted                              1,405,000          1,405,000
KINGTONE WIRELESSINFO SOLUTION HOLDING LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in thousands of U.S Dollars, except shares and per shares data)
(Unaudited)
                                            For the Six Months Ended March 31,
                                            2013               2012
Cash flows from operating activities
Net loss                                    $   (1,808)        $   (5,170)
 Depreciation and amortization                  308                291
 Bad debt expense                               515                3,281
 Share-based compensation expense               1                  2
Changes in operating assets and liabilities
 Accounts and notes receivable                  (582)              522
 Unbilled revenue                               219                141
 Other receivables and prepayments              (711)              (890)
 Inventories                                    (286)              (73)
 Tax payable                                    (64)               (55)
 Accounts payable                               140                20
 Advance from customers                         3,866              626
 Other payables and accruals                    (68)               (112)
 Net investment in sales-type leases            (25)               (39)
Net cash provided by (used in) operating        1,505              (1,456)
activities
Cash flows from investing activities
 Payment to purchase property and               (14)               (82)
 equipments
 Proceeds from disposal of office equipment     -                  1
 Proceeds from collection of due from           124                -
 related companies
Net cash provided by (used in) investing        110                (81)
activities
Cash flows from financing activities
 Proceeds from short-term loans due to          69                 -
 related companies
Net cash provided by financing activities       69                 -
Effect of exchange rate changes on cash and
cash                                            12                 201

equivalents
Net increase (decrease) in cash and cash        1,696              (1,336)
equivalents
 Cash and cash equivalents at beginning of      6,439              8,749
 year
 Cash and cash equivalents at end of year   $   8,135          $   7,413
Supplemental disclosure of cash flow
information
 Interest paid                              $   -              $   -
 Income taxes paid                          $   -              $   -



SOURCE Kingtone Wirelessinfo Solution Holding Ltd

Website: http://www.kingtoneinfo.com
 
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