Sales of E-bicycles halved, Total revenue fell 25.8%

CHANGZHOU, China, Jan. 20, 2023 /PRNewswire/ -- EZGO Technologies Ltd. (Nasdaq: EZGO) ("EZGO" or "we", "our", or "the Company"), a leading short-distance transportation solutions provider in China, today announced its audited financial results for the fiscal year ended September 30, 2022 (the "Fiscal Year 2022").

Fiscal Year 2022 Financial Summary (all results compared to the prior fiscal year unless otherwise noted)

• Revenues were $17.4 million, a decrease of 25.8%, primarily as a result of the decline in volume and price of the e-bicycle business fell.
• Net loss was $7.5 million, compared to net loss of $3.4 million.
• Basic and diluted loss per share attributable to shareholders was $0.48, compared to $0.27 in the same period last year.

Management Commentary

Mr. Jianhui Ye, Chief Executive Officer of EZGO, stated, "The operating revenue in Fiscal Year 2022 was about $17.4 million, down 25.8% YoY ("Year on Year"). The main reason for the decline in revenue was that the volume and price of the e-bicycle business fell, and sales revenue nearly halved YoY. Although the revenue of the lithium battery business increased by nearly two-thirds, it did not offset the impact of decline in our e-bicycle business."

"The sales revenue of e-bicycles was US$9.4 million, down 48.4% YoY. The main reason for the decline was that the production, supply chain and channel marketing were all adversely affected significantly by the repeated outbreak of the epidemic. The revenue of batteries and battery packs was about US$7.0 million, up 63.0% YoY. The increase in revenue of the batteries was mainly due to the continuous relationship with new customers and long-term customers."

Mr. Jianhui Ye, concluded, "Looking forward to the future, the new sales model will be gradually promoted and implemented, and new products will be introduced to the market. In addition, it is expected that the sales of e-bicycles will gradually recover with the lift of COVID-19 epidemic control measures. In the future, the Company will still take "differentiated positioning and ladder innovation" as the strategic orientation, develop and design products to meet the needs of consumers at different levels. Through the expansion of the sales network, we will continue to dig deeper into the domestic market, gradually expand the overseas market, and comprehensively distribute the whole category of two-wheel electric vehicles, lithium batteries and other products."

Fiscal Year 2022 Financial Review

The following table identifies the disaggregation of our revenue from continuing operations and reportable segments for the fiscal years ended September 30, 2020, 2021 and 2022, respectively:

The decrease in revenue from the fiscal year ended September 30, 2021 (the "Fiscal Year2021") to Fiscal Year 2022 was mainly due to the decrease of sales of e-bicycles which was partially offset by the increase of sales of batteries and battery packs.

The sales of e-bicycles decreased by 48.4% to $9,405,103 for Fiscal Year 2022 from $18,232,537 for Fiscal Year 2021 due to the decreased unit price and the decreased sales volume of the e-bicycles under the fierce competition in the e-bicycle industry.

The revenue from sales of battery packs for Fiscal Year 2022 was $6,990,215, compared to $4,288,366 for Fiscal Year 2021. We continued to boost sales of our battery packs due to the increasing market demand and the increase of unit price during Fiscal Year 2022. Our sales price of battery packs increased by approximately 60% for Fiscal Year 2022 compared to Fiscal Year 2021.

Cost of revenues

Our cost of revenues decreased by $5,869,350, or 25%, to $17,170,178 for Fiscal Year 2022 from $23,039,528 for Fiscal Year 2021, which was primarily due to the decrease of manufacturing and purchase cost of e-bicycles for sales of e-bicycles, which is in line with the decrease of revenues.

Gross profit

Gross profit for Fiscal Year 2022 was $219,039, or 1% of net revenues.

Gross profit margin for Fiscal Year 2022 decreased from 2% to 1%, primarily due to the negative margin of sales of e-bicycles, which accounts for a large proportion of our total revenue. The decrease of gross profit margin was primarily because the average selling price of our e-bicycle decreased by 12% for Fiscal Year 2022. Also, the cost of raw materials increased due to adverse impact of COVID-19 pandemics that caused repeated shutdown in factory production.

Selling and marketing expenses

EZGO's selling and marketing expenses decreased by $550,297, or approximately 35%, to $1,008,422 for Fiscal Year 2022 from $1,558,719 for Fiscal Year 2021, was primarily due to the decrease of exhibition expenses, advertising and promotion expenses. Exhibitions and many sales activities were cancelled or affected by COVID-19 pandemic under zero-COVID policy in 2022. The advertising expenses decreased $115,697 or 66% from $174,566 in Fiscal Year 2021 to $58,869 in Fiscal Year 2022. The exhibition expenses decreased $152,955 or 81% from $188,177 in Fiscal Year 2021 to $35,221 in Fiscal Year 2022.

General and administrative expenses

General and administrative expenses increased by $2,972,046, or 110%, to $5,673,224 for Fiscal Year 2022 from $2,701,178 for Fiscal Year 2021. The increase was primarily attributed to 1) the increase of share-based compensation expense, management salaries and employee bonus; 2) the increased depreciation and amortization for the acquired land use right and buildings; and 3) the increased expenses in research and development activities for new e-bicycles models.

Income tax expense/benefit

EZGO incurred an income tax loss of $527,119 for Fiscal Year 2022. The reason is that the Company accrued valuation allowance for deferred tax assets of $1,755,296 for Fiscal Year 2022, based on the assessment that it is more likely than not that the Company will not create enough future taxable income to fully utilize its deferred tax assets.

Net income/loss

As a result of the foregoing, we recorded a net loss of $7,468,830 for Fiscal Year 2022, as compared to a net loss of $3,413,644 for Fiscal Year 2021.

For additional information, please see EZGO's Annual Report on Form 20-F for the fiscal year ended September 30, 2022, which was filed with the U.S. Securities and Exchange Commission on January 20, 2023.

About EZGO Technologies Ltd.

Leveraging an Internet of Things (IoT) product and service platform and three e-bicycle brands, "EZGO", "Cenbird" and "Dilang", EZGO has established a business model centered on the manufacturing and sale of two- and three-wheeled electric vehicles, lithium batteries, complemented by the e-bicycle charging pile business. For additional information, please visit EZGO's website at www.ezgotech.com.cn. Investors can visit the "Investor Relations" section of EZGO's website at http://www.ezgotech.com.cn/Investor/.

Exchange Rate

This announcement contains translations of certain Chinese Renminbi ("RMB") amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the readers. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB7.1135 to US$1.00, the exchange rate in effect as of September 30, 2022, as set forth in the H.10 Statistical release of the Board of Governors of the Federal Reserve System. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "estimate," or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's goals and strategies; the Company's future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the short-distance transportation solutions market in China and the other international markets the Company plans to serve; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and the international markets the Company plans to serve and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission ("SEC"), including the Company's most recently filed Annual Report on Form 20-F and its subsequent filings. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward–looking statements to reflect events or circumstances that arise after the date hereof.