Hollysys Automation Technologies, Ltd.

CIK:0001357450|SEC Filings

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
Net revenues
Total net revenues	$ 777,373	$ 707,462	$ 593,466
Gross profit	255,485	239,357	218,279
Operating expenses
Selling	57,243	45,301	35,197
General and administrative	63,580	80,241	69,982
Research and development (including research and development from related parties of $212, $208 and $144 for the years ended June 30, 2021, 2022 and 2023, respectively)	70,200	69,580	55,954
VAT refunds and government subsidies	(28,551)	(30,309)	(30,099)
Total operating expenses	162,472	164,813	131,034
Income from operations	93,013	74,544	87,245
Other income, net (including other income from related parties of $2,445, $2,830 and $1,891 for the years ended June 30, 2021, 2022 and 2023, respectively)	3,372	2,185	10,449
Foreign exchange (loss) gain	6,363	1,789	(6,219)
Gains on disposal of an investment in an equity investee	0	7,995	0
Losses on disposal of subsidiaries	0	(3)	0
Gains on disposal of an investment in securities	845	0	3,323
Impairment loss of investments in cost investees	0	(773)	0
Share of net income of equity investees	3,116	1,838	604
Interest income	12,394	12,698	14,131
Interest expenses	(878)	(731)	(553)
Dividend income from investments in securities	237	85	912
Income before income taxes	118,462	99,627	109,892
Income tax expenses	11,390	16,634	20,554
Net income	107,072	82,993	89,338
Less: Net (loss) income attributable to non-controlling interests	141	(189)	(371)
Net income attributable to Hollysys Automation Technologies Ltd.	106,931	83,182	89,709
Other comprehensive income, net of tax of nil
Translation adjustments	(99,719)	(46,590)	96,577
Comprehensive income	7,353	36,403	185,915
Less: Comprehensive (loss) income attributable to non-controlling interests	185	(1,310)	(125)
Comprehensive income attributable to Hollysys Automation Technologies Ltd.	$ 7,168	$ 37,713	$ 186,040
Net income per share:
Basic	$ 1.74	$ 1.36	$ 1.48
Diluted	$ 1.72	$ 1.35	$ 1.46
Shares used in net income per share computation:
Basic	61,521,412	61,007,806	60,566,709
Diluted	62,034,400	61,568,476	61,513,749
Integrated Solution Contracts [Member]
Net revenues
Total net revenues	$ 632,100	$ 573,567	$ 460,180
Cost of revenue	474,046	422,236	336,471
Product [Member]
Net revenues
Total net revenues	47,424	38,486	28,667
Cost of revenue	13,257	10,247	5,293
Service [Member]
Net revenues
Total net revenues	97,849	95,409	104,619
Cost of revenue	$ 34,585	$ 35,622	$ 33,423

CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	12 Months Ended
	Jun. 30, 2023	Jun. 30, 2022	Jun. 30, 2021
Cash flows from operating activities:
Net income	$ 107,072	$ 82,993	$ 89,338
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation of property, plant and equipment	8,612	10,263	9,959
Amortization of prepaid land leases	331	382	454
Amortization of intangible assets	1,342	1,356	316
Allowance for credit losses	7,540	16,122	8,656
(Gain) loss on disposal of long-lived assets	19	(75)	(7)
Share of net income of equity investees	(3,116)	(1,838)	(604)
Dividends received from an equity investee	0	0	91
Loss on disposal of subsidiaries	0	3	0
Impairment loss on investment in a cost investee	0	773	0
Gains on disposal of an investment of an equity investee	0	(7,995)	0
Gain on disposal of an investment in securities	(845)	0	(3,323)
Share-based compensation expenses	3,286	9,709	9,724
Deferred income tax expenses (benefit)	(8,002)	4,179	(5,838)
Other income, net	0	0	(6,724)
Changes in operating assets and liabilities:
Accounts receivable and retention	(32,011)	(11,807)	(88,854)
Costs and estimated earnings in excess of billings	(40,902)	(39,839)	3,049
Other receivables	1,036	(3,425)	11,183
Advances to suppliers	2,929	(14,274)	(1,253)
Due from related parties	(704)	4,903	6,784
Inventories	(28,581)	(40,007)	4,657
Prepaid expenses	77	257	(268)
Accounts payable	7,574	28,470	10,178
Deferred revenue	(10,017)	19,221	31,432
Accruals and other payable	5,947	(16,417)	(966)
Income tax payable	1,957	1,423	514
Other tax payables	(223)	5,511	2,700
Due to related parties	(144)	4,638	(1,915)
Net cash provided by operating activities	23,177	54,526	79,283
Cash flows from investing activities:
Purchases of short-term investments	(126,069)	(64,383)	(147,237)
Maturity of short-term investments	103,718	100,562	443,095
Purchases of property, plant and equipment	(40,918)	(26,369)	(18,131)
Proceeds from disposal of property, plant and equipment	309	140	314
Investments made in equity investees	(1,653)	(1,261)	(9,459)
Proceeds from disposal of a subsidiary	4,175	3,797	0
Proceeds received from disposal of equity investments	0	9,497	5,187
Acquisition of a subsidiary, net of cash acquired	(90)	(8,726)	(9,406)
Proceeds received from investment in equity securities without readily determinable fair value	845	0	5,895
Net cash provided by (used in) investing activities	(59,683)	13,257	270,258
Cash flows from financing activities:
Proceeds from short-term bank loans	293	128	0
Repayments of short-term bank loans	(357)	(59)	0
Proceeds from long-term bank loans	18,818	875	520
Repayments of long-term bank loans	(869)	(673)	(633)
Payment of dividends	0	(19,827)	(12,107)
Proceeds from issuance of shares of a subsidiary	0	0	2
Net cash (used in) provided by financing activities	17,885	(19,556)	(12,218)
Effect of foreign exchange rate changes on cash, cash equivalents and restricted cash	(52,276)	(24,747)	39,127
Net increase (decrease) in cash, cash equivalents and restricted cash	(70,897)	23,480	376,450
Cash, cash equivalents and restricted cash, beginning of year	719,027	695,547	319,097
Cash, cash equivalents and restricted cash, end of year	648,130	719,027	695,547
Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets:
Cash and cash equivalents	611,632	679,754	664,321
Current portion of restricted cash	23,009	38,486	25,294
Non-current portion of restricted cash	13,489	787	5,932
Total cash, cash equivalents and restricted cash	648,130	719,027	695,547
Supplemental disclosures of cash flow information:
Interest expense paid	1,129	731	553
Income tax paid	16,131	15,632	16,804
Supplemental disclosures of non-cash information:
Acquisition of property, plant and equipment included in construction costs payable and accrued liabilities	$ 11,560	$ 5,987	$ 477

CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Jun. 30, 2023	Jun. 30, 2022
Current assets:
Cash and cash equivalents	$ 611,632	$ 679,754
Short-term investments	33,202	12,203
Restricted cash	23,009	38,486
Accounts receivable, net of allowance for credit losses of $77,603 and $73,009 as of June 30, 2022 and 2023, respectively	309,822	317,763
Costs and estimated earnings in excess of billings, net of allowance for credit losses of $12,178 and $14,438 as of June 30, 2022 and 2023, respectively	253,262	228,877
Accounts receivable retention	7,465	6,005
Other receivables, net of allowance for credit losses of $12,449 and $12,044 as of June 30, 2022 and 2023, respectively	19,265	26,100
Advances to suppliers	28,493	33,851
Inventories	111,634	91,243
Prepaid expenses	596	667
Income tax recoverable	649	258
Total current assets	1,424,935	1,462,567
Non-current assets:
Restricted cash	13,489	787
Costs and estimated earnings in excess of billings	1,746	3,021
Accounts receivable retention	6,587	6,561
Prepaid expenses	3	1
Property, plant and equipment, net	134,626	98,249
Prepaid land leases	11,503	12,447
Intangible assets, net	8,483	10,742
Investments in equity investees	47,603	46,581
Investments in securities	1,561	1,693
Goodwill	18,939	20,539
Deferred tax assets	11,937	4,540
Operating lease right-of-use assets	3,436	4,045
Total non-current assets	259,913	209,206
Total assets	1,684,848	1,671,773
Current liabilities (including amounts of the VIE without recourse to the primary beneficiary of $1,547 and $586 as of June 30, 2022 and 2023, respectively):
Short-term bank loans	0	66
Current portion of long-term loans	15,231	15,210
Accounts payable	170,632	173,953
Construction costs payable	11,085	92
Deferred revenue	181,387	206,222
Accrued payroll and related expenses	26,742	23,535
Income tax payable	6,414	4,509
Warranty liabilities	3,238	3,280
Other tax payables	10,504	11,587
Accrued liabilities	36,870	37,282
Amounts due to related parties	6,155	6,299
Current portion of other liability	0	3
Operating lease liabilities	1,887	2,518
Total current liabilities	470,145	484,556
Non-current liabilities (including amounts of the VIE without recourse to the primary beneficiary of nil and nil as of June 30, 2022 and 2023, respectively):
Accrued liabilities	2,367	3,349
Long-term loans	16,775	434
Accounts payable	2,588	1,556
Deferred tax liabilities	13,069	12,966
Warranty liabilities	2,568	1,722
Operating lease liabilities	1,103	1,282
Long-term other liabilities	0	80
Total non-current liabilities	38,470	21,389
Total liabilities	508,615	505,945
Commitments and contingencies
Stockholders' equity:
Ordinary shares, par value $0.001 per share, 100,000,000 shares authorized; 61,962,449 shares and 62,021,930 shares issued and outstanding as of June 30, 2022 and 2023, respectively	62	62
Additional paid-in capital	246,908	243,476
Statutory reserves	78,875	77,263
Retained earnings	961,782	857,141
Accumulated other comprehensive loss	(112,418)	(12,655)
Total Hollysys Automation Technologies Ltd. stockholders' equity	1,175,209	1,165,287
Non-controlling interests	1,024	541
Total equity	1,176,233	1,165,828
Total liabilities and equity	1,684,848	1,671,773
Related Party [Member]
Current assets:
Amounts due from related parties	$ 25,906	$ 27,360