- Total revenues were $202.7 million, a decrease of 27.1% compared to the comparable prior year period.

- Non-GAAP gross margin was at 29.2%, compared to 39.6% for the comparable prior year period.

- Non-GAAP diluted EPS were at $0.56, a decrease of 47.2% compared to the comparable prior year period.

- Net cash provided by operating activities was $54.1 million for the current period.

- DSO of 203 days, compared to 158 days for the comparable prior year period.

- Inventory turnover days of 48 days, compared to 38 days for the comparable prior year period.

Second Quarter of Fiscal Year 2017 Financial Highlights

- Non-GAAP net income attributable to Hollysys was $11.0 million, a decrease of 70.1% compared to the comparable prior year period.

- Total revenues were $99.1 million, a decrease of 35.1% compared to the comparable prior year period.

- Non-GAAP gross margin was at 28.7%, compared to 39.8% for the comparable prior year period.

- Non-GAAP diluted EPS were at $0.18, a decrease of 70.5% compared to the comparable prior year period.

- Net cash provided by operating activities was $36.2 million for the current quarter.

- DSO of 208 days, compared to 138 days for the comparable prior year period.

- Inventory turnover days of 52 days, compared to 34 days for the comparable prior year period.

BEIJING, Feb 14, 2017 /PRNewswire/ -- Hollysys Automation Technologies Ltd. (NASDAQ: HOLI) ("Hollysys" or the "Company"), a leading provider of automation and control technologies and applications in China, today announced its unaudited financial results for the fiscal year 2017 the second quarter ended on Dec 31, 2016 (see attached tables).

Industrial Automation (IA) has been developing to the short-term target, which was trying to alleviate continuously declining. Through actively traced our customers' new demands under adjusting circumstance, we got several significant contracts. For example, in power, we signed the contract to provide products for Yuneng Hengshan 2X1000MW power units, Datang Pingluo 2X660MW power units and Yangmei Xishangzhuang 2X660MW power units. In chemical, we provided DCS and Batch for BASF chemical company. In petrochemical, we won the contract to provide products to a halite project which will produce 1 million tons soda ash per year. In nuclear power, we continued to provide DCS for Hongyanhe #5 & #6 units and Tianwan #5 & #6 units.

For Factory Automation (FA), after by changing strategies from selling products to provide solutions to customers we did have some progress such as Hair project to help the customer improve the level of automation and Intelligence of their Tianjin-based factory which focuses on wash machine, integrated internal resources to improve the production. Others new sub-vertical trials such as Hai Di Lao Hot Pot project helped the customer to improve their efficiency of hot pot based making in the restaurant which is the first food area project under FA customizations. We also provide supervisory control and data analyzing software integration solutions to "China Model Factory" jointly established by Tsinghua University and McKinsey & Company. The project is to raise the level of factory's productivity, digitalization and intelligence in China. Hollysys aim to make each project into a demonstration project and create values to the customers.

In high-speed railway, due to the negative impact from delaying ATP contract, the performance of high-speed railway for this quarter was less than satisfactory. In addition, since it is the first year for the 13th five-year-plan, the infrastructure of new planned railway is just started. Therefore, in short term, the performance of high speed rail segment was fluctuated. However, from long run, according to the mid and long term plan of high-speed railway and with the increase of the after sell and new products launching, we think the sector will recover in future. For subway, we stick to our strategy to expand new cities. For this quarter, we signed the contract to provide SCADA for Wuhan Subway Line 21.

In the mechanical and electrical installation services, although Concord and Bond are facing some difficulties because of the local political and economic uncertainties in South East Asia and Middle East area, they are still hard working to develop businesses. For example, Concord won the contract to provide SCADA for Macau LRT phase 1. As one of the strategies to expand overseas market, we will ensure a healthy development of Concord and Bond and take use of their advantages such as good customer relations and sales channels to find more international opportunities.

First Half Year and the Second Quarter Ended December 31, 2016 Unaudited Financial Results Summary

To facilitate a clear understanding of Hollysys' operational results, a summary of unaudited non-GAAP financial results is shown as below:

(In USD thousands, except for number of shares and per share data)

Three months ended

Six months ended

Dec 31, 2016

Dec 31, 2015

% Change

Dec 31, 2016

Dec 31, 2015

% Change

Revenues

$

99,137

152,773

(35.1)%

$

202,679

277,864

(27.1)%

Integrated contract revenue

$

89,535

134,159

(33.3)%

$

182,600

245,172

(25.5)%

Products sales

$

6,057

15,393

(60.7)%

$

14,370

26,835

(46.5)%

Service rendered

$

3,545

3,221

10.1%

$

5,709

5,857

(2.5)%

Cost of revenues

$

70,704

91,964

(23.1)%

$

143,588

167,875

(14.5)%

Gross profit

$

28,433

60,809

(53.2)%

$

59,091

109,989

(46.3)%

Total operating expenses

$

17,236

19,151

(10.0)%

$

30,543

37,305

(18.1)%

Selling

$

6,307

7,096

(11.1)%

$

11,858

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Hollysys Automation Technologies Reports Unaudited Financial Results for the First Half Year and the Second Quarter ... - PR Newswire (press release)