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Kingtone Wirelessinfo Solution Holding Ltd Reports Fiscal Year 2013 Financial Results; Provides Fiscal Year 2014 Revenue and Net

Kingtone Wirelessinfo Solution Holding Ltd Reports Fiscal Year 2013 Financial
      Results; Provides Fiscal Year 2014 Revenue and Net Income Guidance

FY13 Revenues Up 696.8% to $11.6 million from $1.5 million in the Prior Year

FY13 Gross Profit Up 527.7% to $1 million from $0.2 million loss in the Prior
Year

FY13 Basic and Diluted Loss Per Share Up to $3.65 from Loss Per Share of $6.40
in the Prior Year

PR Newswire

XI'AN, China, Jan. 17, 2014

XI'AN, China, Jan. 17, 2014 /PRNewswire-FirstCall/ -- Kingtone Wirelessinfo
Solution Holding Ltd (Nasdaq CM: KONE) ("Kingtone", or the "Company"), a
China-based developer and provider of mobile enterprise solutions, today
announced financial results for its fiscal year ended September 30, 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").

Fiscal Year 2013 Financial Highlights

  oRevenues increased by 696.8% to approximately $11.6 million from
    approximately $1.5 million in the prior year period.
  oGross profit increased by 527.7% to approximately $1 million gross profit
    from approximately $0.2 million loss in the prior year period.
  oGross margin increased to 8.8% from minus 16.4% in the prior year period.
  oNet loss of approximately $5.1 million as compared to net loss of
    approximately $9.0 million in the prior year period.
  oBasic and diluted loss per share were $3.65 as compared to loss per share
    of $6.40 in the prior year period with weighted average shares outstanding
    of 1,405,000 in both periods.

"We are very glad to see the revenue has grown dramatically during the fiscal
year 2013," said Mr. Peng Zhang, Chief Executive Officer of the Company,
"Thanks for our investors being patient with our business and capital market
performance and staying with the company during the difficult time when the
company's business didn't do well for the past two years. In the future we
will continue to take measures to improve our performance and strengthen our
business model to achieve sustainable growth."

Fiscal Year 2013 Financial Performance

Results of Operations - The year ended September 30, 2013 compared to the year
ended September 30, 2012.

Revenues.

For the year ended September 30, 2013, our revenues increased by 696.8% to
approximately $11.6 million in the year ended September 30, 2013 from
approximately $1.5 million in the year ended September 30, 2012.

Our revenue from software solution sales increased by 5.8% to approximately
$0.29 million in the year ended September 30, 2013 from approximately $0.28
million in the year ended September 30, 2012. As a percentage of total
revenue, software solution sales decreased from 19.0% to 2.5%. Our revenue
from wireless system solution sales increased by 858.4% to approximately $11.3
million in the year ended September 30, 2013 from approximately $1.2 million
in the year ended September 30, 2012. As a percentage of total revenue,
wireless system solution revenue increased from 81.0% to 97.5% of our total
revenue. The significant increase in our wireless solution revenue was mainly
due to that we entered into a contract with Hualu Engineering & Technology
Co., Ltd. ("Hualu") to provide wireless system service to Hualu's coal
chemical factory in Jingbian Energy and Chemical Projects, and Comprehensive
Utilization of Industrial Park in Shaanxi, China ("Jingbian Industrial Park").
Hualu, a state-owned enterprise in China, is dedicated to all round
engineering construction services. Pursuant to the agreement, we will provide
engineering services to Hualu's coal chemical factory in Jingbian Industrial
Park. The services to be performed under this contract include installation,
debugging and initial training the staff operating the tank, engineering
instruments and telecommunications. It has contributed RMB 63.6 million, or
approximately $10.2 million revenue to the company during the fiscal year of
2013.

Cost of Sales.

Our cost of sales increased by 524.3% to approximately $10.5 million in the
year ended September 30, 2013 from approximately $1.7 million in the year
ended September 30, 2012. The increase in cost of sales was primarily
attributable to the increase in revenue and gross margin from wireless system
solutions business. As a percentage of our total revenues, our cost of sales
decreased to 91.2% of revenues in the year ended September 30, 2013 from
116.4% of our total revenues in the year ended September 30, 2012.

Cost of sales for software decreased by 11.3% to approximately $0.5 million in
the year ended September 30, 2013 from approximately $0.6 million in the year
ended September 30, 2012, representing 5.4% and 37.9% of our total cost of
sales and 2.5% and 19.0% of our software revenue in the fiscal years ended
September 30, 2013 and 2012, respectively. Cost of sales for wireless system
solutions increased by 851.0% to approximately $10.0 million in the year ended
September 30, 2013 from approximately $1.0 million in the year ended September
30, 2012, representing 94.6% and 62.1% of total cost of sales and 97.5% and
81.0% of wireless system solution revenues in the fiscal years ended September
2013 and 2012, respectively. The increased percentage of cost of sales to
wireless system solution revenues from September 30, 2012 to September 30,
2013 was due to the increase of corresponding revenue from September 30, 2012
to September 30, 2013.

Gross Profit and Gross Margin. Total gross profit increased by 527.7% to
approximately $1 million gross profit in the year ended September 30, 2013
from approximately $0.2 million loss in the year ended September 30, 2012. Our
total gross margin was 8.8% and minus 16.4% in the years ended September 30,
2013 and 2012, respectively. This increase of gross profit and gross margin
was primarily due to the increase of sales from wireless system solution,
which resulted in the overall increase in industry profit and profit margin.

Our gross profit for software solution sales increased by 24.1% to
approximately $0.3 million loss in the year ended September 30, 2013 from
approximately $0.4 million loss in the year ended September 30, 2012. Our
gross margin for software solutions sales increased to minus 95.2% in the year
ended September 30, 2013 from minus 132.7% in the year ended September 30,
2012.Our gross profit for wireless system solution sales increased by 919.7%
to approximately $1.3 million in the year ended September 30, 2013 from
approximately $0.1 million in the year ended September 30, 2012. Our gross
margin for wireless system solution sales increased to 11.5% in the year ended
September 30,2013 from 10.8% in the year ended September 30, 2012.

Loss from Operations

We incurred a loss of $2.6 million in the year ended September 30, 2013, a
72.4% or $6.8 million decrease in such a loss from approximately loss of $9.4
million in the year ended September 30, 2012. The decrease in loss from
operations was mainly due to significantly higher revenues from wireless
system solutions business compounded by decreased operating expenses.

Other Income (Expense)

Our other expense increased 2060.0% to approximately $1.2 million in fiscal
year 2013 from approximately $0.06 million of other income in fiscal year
2012, and represented 10.2% and 4.1% of our revenue for the years ended
September 30, 2013 and 2012, respectively. The increase in our other expense
was largely due to that we confirmed the loss from loan to an unrelated third
party. As a U.S. listed company, the Company is in need of US dollar to cover
oversea expenses. Since State Administration of Foreign Exchange in China
imposes restrictions on the remittance of currency out of China, Topsky
Info-tech Holdings Pte Ltd, the Company's wholly owned subsidiary in Singapore
("Topsky") and Xi'an Kingtone Information Technology Co., Ltd., the Company's
variable interest entity in China ("Kingtone Information") entered into a loan
and guarantee agreement on July 21, 2011 with an unrelated third party to have
Topsky borrow US$3 million to cover oversea expenses and take RMB27.9 million,
or US$4.2 million from Kingtone Information as a guarantee. The offset amount
US$1.2 million was presented as long-term other receivables in the
anticipation that the agreement would be settled in two years.The loan
matured on July 21, 2013 and the long-term receivable was non-collectable. As
a result, we had written off the balance of the long-term receivable and
charged to other expense for the year ended September 30, 2013.

Net Loss

We incurred a net loss of $5.1 million in the year ended September 30, 2013 as
compared to net loss of approximately $9.0 million in the year ended September
30, 2012, representing a decrease of 42.9%. Basic and diluted loss per share
was $3.65 in the year ended September 30, 2013, compared to loss per share
$6.40 in the prior year period. The number of weighted average ordinary shares
outstanding was 1,405,000 for the years ended September 30, 2013 and 2012,
respectively.

Liquidity and Capital Resources.

Cash and Cash Equivalents. As of September 30, 2013, the Company had cash and
cash equivalents of $6.1 million, compared to $6.4 million in the prior year
period.

Net cash provided by operating activities was approximately minus $0.4 million
for the year ended September 30, 2013 as compared to $2.4 million net cash
used in operating activities for the year ended September 30, 2012.During the
fiscal year 2013, the Company had a net loss of $5.1 million, out of which
$0.6 million was depreciation and amortization and $0.5 million was bad debt
expense. In addition, the Company had net investment in sales-type leases of
$1.4 million, increased accounts and notes receivable by $1.7 million and
increased unbilled revenue by $5.4 million.

Net cash provided by investing activities for the year ended September 30,
2013 was approximately $7 thousand as compared to net cash used in investing
activities of approximately $0.1 million for the year ended September 30,
2012. The cash provided by investing activities in 2013 was mainly due to
disposal of property and equipment and the cash used in investing activities
in fiscal year 2013 and 2012 were mainly attributable to purchasing property
and equipment.

Net cash used in financing activities for the year ended September 30, 2013
was approximately $1 thousand as compared to net cash provided by financing
activities of approximately $9 thousand for the year ended September 30,
2012.

Financial Outlook.

For the fiscal year ending September 30, 2014, management expects revenues of
$12.0 million to $15.0 million and net income of $0.5 million to $1 million.

Conference Call

The Company will host a conference call to discuss its fiscal year 2013
financial results at 8:00 a.m. ET on Friday, January 17, 2014. Mr. Tao Li,
Chairman, Mr. Peng Zhang, Chief Executive Officer, Ms. Li Wu, Chief Financial
Officer and Ms. Yao Ti, Assistant to the Chief Financial Officer, will be on
the call.

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 #: 13574620

A replay of the call will be available until 11:59 PM ET on Jan. 19, 2014.

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

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

The conference call will be webcast live by Vcall and can be accessed at
http://www.investorcalendar.com/IC/CEPage.asp?ID=172130

About Kingtone Wirelessinfo Solution Holding Ltd

Kingtone Wirelessinfo Solution Holding Ltd (Nasdaq CM: KONE-News) 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, to
improve 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 Kingtone'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, 2013
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:

Chief Financial Officer Assistant
Yao Ti
Tel: +86-29-8826-6500
Email: tiyao@kingtoneinfo.com



KINGTONE WIRELESSINFO SOLUTION HOLDING LTD AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Express in thousands of U.S. Dollars, except shares and per share data)
                                                 As of September 30,
                                                 2013              2012
ASSETS
Current assets
*       Cash and cash equivalents          $     6,132       $     6,439
*       Accounts and Notes Receivable, net       4,496             3,240
        of allowance
*       Unbilled revenue                         6,029             580
*       Due from related companies               141               123
*       Inventories, net                         688               628
*       Other receivables and prepayments        2,105             1,772
*       Current portion of long-term             -                 1,393
        receivables
*       Current portion of net investment        -                 1,210
        in sales-type leases
        Total Current Assets                     19,591            15,385
Non-current assets
*       Property and Equipment, net              13,358            13,541
*       Intangible assets                        632               633
*       Net investment in sales-type             -                 333
        leases, less current portion
        Total Assets                       $     33,581      $     29,892
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
*       Accounts payable                   $     1,606       $     775
*       Advances from customers                  9,062             1,528
*       Other payables and accruals              111               167
*       Taxes payable                            1,545             1,673
*       Amounts due to related parties           2                 2
*       Dividend payable                         842               817
        Total Current Liabilities                13,168            4,962
Stockholders' equity
        Ordinary share ($0.01 par value,
        100,000,000 shares authorized,
        1,405,000 shares issued and              14                14
        outstanding as of September 30,
        2013 and 2012, respectively)
*       Additional paid in capital               22,233            22,233
*       Appropriated retained earnings           1,615             1,615
*       Unappropriated retained earnings         (7,648)           (2,515)
*       Accumulated other comprehensive          4,199             3,583
        income
        Total Shareholders' Equity               20,413            24,930
        Total Liabilities and              $     33,581      $     29,892
        Shareholders' Equity
*All of the VIE's assets can be used to settle obligations of their primary
beneficiary. Liabilities recognized as a result of consolidating these VIEs
do not represent additional claims on the Company's general assets.





KINGTONE WIRELESSINFO SOLUTION HOLDING LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Express in thousands of U.S. Dollars, except shares and per share data)
                                             For the years ended September 30,
                                             2013        2012        2011
Revenues
   Software                                $ 291       $ 275       $ 2,409
   Wireless system solution                  11,271      1,176       3,928
                - Related party              192         -           131
                -Third Party                 11,079      1,176       3,797
   Total revenues                            11,562      1,451       6,337
Cost of sales
   Software                                  568         640         1,205
   Wireless system solution                  9,976       1,049       2,203
                - Related party              127         -           -
                -Third Party                 9,849       1,049       2,203
   Total cost of sales                       10,544      1,689       3,408
Gross (loss) profit                          1,018       (238)       2,929
Operating expenses
   Selling and marketing expenses            557         685         629
   General and administrative expenses       2,805       8,278       3,276
   Research and development expenses         249         201         311
   Total Operating expenses                  3,611       9,164       4,216
Loss from operations                         (2,593)     (9,402)     (1,287)
Other income(expense)
   Subsidy income                            -           237         -
   Interest income                           79          117         162
   Loss of net investment in sales-type      (1,443)     -           -
   leases
   Other income (expense), net               (1,176)     60          120
                - Related party              44          -           -
                -Third Party                 (1,220)     60          120
   Total other income (expense), net         (2,540)     414         282
Loss before income tax expenses              (5,133)     (8,988)     (1,005)
   Income tax expenses                       -           -           32
Net loss                                   $ (5,133)   $ (8,988)   $ (1,037)
Other comprehensive income
   Foreign currency translation gain         616         1,194       676
Comprehensive loss                         $ (4,517)   $ (7,794)   $ (361)
Loss per ordinary share:
   Basic and Diluted                       $ (3.65)    $ (6.40)    $ (0.74)
Weighted average number of ordinary shares
outstanding Basic and Diluted
                                             1,405,000   1,405,000   1,405,000





KINGTONE WIRELESSINFO SOLUTION HOLDING LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Express in thousands of U.S. Dollars, except shares and per share data)
                                             For the years ended September 30,
                                             2013        2012        2011
Cash flows from operating activities
Net loss                                  $  (5,133)  $  (8,988)  $  (1,037)
  Depreciation and amortization              592         548         530
  Investment loss                            1,443       -           -
  Bad debt expense                           519         4,942       402
  Employee compensation                      -           873         -
  Share-based compensation expense           -           2           316
Changes in operating assets and
liabilities
  Accounts and notes receivable              (1,662)     1,576       (3,004)
  Unbilled revenue                           (5,351)     (405)       818
  Other receivables and prepayments          1,180       (1,549)     (278)
  Inventories                                (41)        (390)       161
  Tax payable                                (176)       76          (1,934)
  Accounts payable                           796         (201)       351
  Advance from customers                     7,378       1,146       (12)
  Other payables and accruals                (58)        9           (13)
  Net investment in sales-type leases        122         (71)        (1,407)
  Due from related party                     (15)        -           -
Net cash (used in) provided by operating     (406)       (2,432)     (5,107)
activities
Cash flows from investing activities
  Payment to purchase property and           (22)        (97)        (75)
  equipments
  Disposal of property and equipments        29          -           -
Net cash (used in) provided by investing     7           (97)        (75)
activities
Cash flows from financing activities
  Collection/(Payment) in amounts due from   1           -           5
  related-party companies
  Proceeds in amounts due to                 -           -           2
  related-party companies
  Receipt in loan from non-related           -           9           3,000
  companies
  Payment in loan to non-related             -           -           (4,208)
  companies
  Collection in amounts due from             -           -           11
  shareholders
Net cash (used in) provided by financing     1           9           (1,190)
activities
Effect of exchange rate changes on cash and  91          211         209
cash equivalents
Net decrease in cash and cash equivalents    (307)       (2,310)     (6,160)
  Cash and cash equivalents at beginning     6,439       8,749       14,909
  of year
  Cash and cash equivalents at end of     $  6,132    $  6,439    $  8,749
  year
Supplemental disclosure of cash flow
information
  Interest paid                           $  -        $  -        $  -
  Income taxes paid                       $  -        $  -        $  1,608.00





KINGTONE WIRELESSINFO SOLUTION HOLDING LTD AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(Express in thousands of U.S. Dollars, except shares and per share data)
                                               Additional  Appropriated  Unappropriated  Accumulated    Total
                                      Paid-in  paid-in     retained      retained        other          Stockholders'
             Ordinary shares          capital  Capital     earnings      earnings        comprehensive  Equity
             Ordinaryshares  Amount                                                     income
Balance as
of September 1,400,000        14      -        21,915      844           8,281           1,713          32,767
30, 2010
Issuance of
ordinary
shares in
form of      5,000            -       -        -           -             -               -              -
American
Depositary
Shares
Share-based -                -       -        316         -             -               -              316
compensation
Net loss    -                -       -        -           -             (1,037)         -              (1,037)
for the year
Transfer to
statutory    -                -       -        -           771           (771)           -              -
reserves
Foreign
currency     -                -       -        -           -             -               676            676
translation
gain
                                                                                                        -
Balance as
of September 1,405,000        14      -        22,231      1,615         6,473           2,389          32,722
30, 2011
Share-based -                -       -        2           -             -               -              2
compensation
Net loss    -                -       -        -           -             (8,988)         -              (8,988)
for the year
Foreign
currency     -                -       -        -           -             -               1,194          1,194
translation
gain
                                                                                                        -
Balance as
of September 1,405,000        14      -        22,233      1,615         (2,515)         3,583          24,930
30, 2012
Net loss    -                -       -        -           -             (5,133)         -              (5,133)
for the year
Foreign
currency     -                -       -        -           -             -               616            616
translation
gain
                                                                                                        -
Balance as
of September 1,405,000        14      -        22,233      1,615         (7,648)         4,199          20,413
30, 2013



SOURCE Kingtone Wirelessinfo Solution Holding Ltd

Website: http://www.kingtoneinfo.com
 
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