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Greenland Technologies Reports First Quarter 2023 Unaudited Financial Results

19 May 2023
  • 1Q23 Gross Margin Improves 320 Basis Points Year-over-Year
  • Cash and Cash Equivalents Rises 125% Year-over-Year to $15.4 Million

EAST WINDSOR, N.J., May 19, 2023 /PRNewswire/ -- Greenland Technologies Holding Corporation (NASDAQ: GTEC) ("Greenland" or the "Company"), a technology developer and manufacturer of electric industrial vehicles and drivetrain systems for material handling machineries and vehicles, today announced its unaudited financial results for the first quarter ended March 31, 2023.

First Quarter 2023 Financial and Operating Highlights

  • Revenue was $22.1 million, compared with $29.3 million a year ago.
  • Gross margin was 24.9%, up 320 basis point from 21.7% a year ago on improved product mix. 
  • Net income was $2.5 million, compared with $2.9 million in the first quarter of 2022.
  • Transmissions products sold were 36,841 units, compared with 41,902 units last year.

Mr. Raymond Wang, Chief Executive Officer of Greenland Technologies Holding Corporation, commented, "We delivered results in line with our expectations. Demand remained soft in the first quarter as a result of our clients ramping up their production after the end of China's zero COVID policies and significant pent-up travel demand during this year's Chinese New Year holiday. However we continued to drive higher profitability through improved mix of higher value products and increased operational efficiencies. We expect demand to improve in the second half of the year and continue to anticipate revenue growth for our core transmission business in 2023."

Mr. Wang continued, "Our HEVI division of all-electric industrial heavy equipment continues to make progress in establishing our foundation, expanding market awareness and developing the team.  I am pleased to announce that we have hired Dana Hopkins to lead our HEVI division as the Chief Operating Officer. Dana brings extensive senior leadership experience in the commercial industrial and material handling machinery industry and will be instrumental in helping us grow this new market and HEVI's industry-leading position. Brand awareness and product interest continues to grow from potential customers, partners or authorities through our active participation in a series of trade shows along with our ongoing product pilots and demos. Overall, we believe 2023 will be a strong year for our company."

Mr. Jing Jin, Chief Financial Officer of Greenland, commented: "Our strategic shift towards higher value and more sophisticated transmission products continued to improve profitability, highlighted by a 320-basis point increase in gross margin year-over-year to 24.9% in the first quarter. This is a testament to our leadership position in the industry and effectiveness of our business strategies. Meanwhile, we've been focusing on cost management and operational efficiency while also continuing to invest in the HEVI infrastructure, talent, and technology in order to drive long-term growth. Finally, we maintained a robust balance sheet with $15.4 million cash on hand, up 125% from a year ago. With a solid balance sheet and growth strategies, we are confident in our ability to grow both core transmission business as well as our HEVI division and create significant value for shareholders."

First Quarter 2023 Financial Results

Revenue was $22.1 million, a decrease of 24% from $29.3 million in the first quarter of 2022, primarily due to logistical and supply chain challenges due to the initial wave of covid cases following the end of China's zero covid policies and significant pent-up demand related travel during this year's Chinese New Year holiday. In addition, revenue was impacted by a stronger dollar relative to the Chinese RMB. On an RMB basis, excluding the impact of FX, total revenues decreased by approximately 18% from the first quarter of 2022. The number of transmission products sold was 36,841 units, compared with 41,902 units in the first quarter of 2022.

Costs of goods sold were $16.6 million, a decrease of 28% from $22.9 million in the first quarter of 2022, primarily due to the decrease in sales volume.

Gross profit was $5.5 million, compared with $6.4 million in the first quarter of 2022. Gross margin was 24.9%, up 320 basis points from 21.7% in the first quarter of 2022, as a result of a strategic shift in Greenland's product mix towards higher value, and more sophisticated products, such as hydraulic transmissions.

Total operating expenses were $3.1 million, compared with $3.0 million in the first quarter of 2022. The Company has focused on significantly streamlining costs over the past year, which has mostly offset increases in R&D investment and marketing activities related to the company's expansion.

Income from operations was $2.4 million, compared with $3.4 million in the first quarter of 2022. 

Net income was $2.5 million, compared with net income of $2.9 million in the first quarter of 2022.

Basic and diluted net income per ordinary share were both $0.11, compared with $0.16 per ordinary share in the first quarter of 2022.

Conference Call

Greenland Technologies management will host an earnings conference call at 8:00 AM on Friday, May 19, 2023, U.S. Eastern Time (8:00 PM on May 19, 2023, Beijing/Hong Kong Time).

Participant Registration

Investors and analysts interested in participating in Greenland's first quarter 2023 earnings call need to register in advance using the URL provided below. Conference access information will be provided upon registration.

Participant Online Pre-Registration:

https://register.vevent.com/register/BI5632ba100a7047dba40ba463a3374c1f

A live and archived webcast will also be available on the investor relations section of Greenland's website at https://ir.gtec-tech.com/.

About Greenland Technologies Holding Corporation

Greenland Technologies Holding Corporation (NASDAQ: GTEC) is a developer and a manufacturer of drivetrain systems for material handling machineries and electric vehicles, as well as electric industrial vehicles. Information on the Company's clean industrial heavy equipment division can be found at HEVI Corp.

Safe Harbor Statement

This press release contains statements that may constitute "forward-looking statements." Such statements reflect Greenland's current views with respect to future events and are subject to such risks and uncertainties, many of which are beyond the control of Greenland, including those set forth in the Risk Factors section of Greenland's Annual Report on Form 10-K filed with the U.S. Securities and Exchange Commission ("SEC"). Copies are available on the SEC's website, www.sec.gov. Words such as "expect," "estimate," "project," "budget," "forecast," "anticipate," "intend," "plan," "may," "will," "could," "should," "believes," "predicts," "potential," "continue," and similar expressions are intended to identify such forward-looking statements. These forward-looking statements include, without limitation, Greenland's expectations with respect to future performance. In addition, there is uncertainty about the further spread of the COVID-19 virus or the occurrence of another wave of cases and the impact it may have on the Company's operations, the demand for the Company's products, global supply chains and economic activity in general. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected. Statements contained in this news release regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Greenland does not intend and does not assume any obligation to update these forward-looking statements, other than as required by law.

Statement Regarding Preliminary Unaudited Financial Information

The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Company's year-end audit, which could result in significant differences from this preliminary unaudited financial information.

GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE MONTHS ENDED MARCH 31, 2023 AND 2022

(UNAUDITED, IN U.S. DOLLARS)

 
  

For the

three months ended

March 31,

 
  

2023

  

2022

 

REVENUES

 

$

22,149,360

  

$

29,306,957

 

COST OF GOODS SOLD

  

16,625,930

   

22,938,983

 

GROSS PROFIT

  

5,523,430

   

6,367,974

 

Selling expenses

  

387,485

   

639,647

 

General and administrative expenses

  

1,641,904

   

1,279,746

 

Research and development expenses

  

1,119,891

   

1,082,594

 

Total operating expenses

 

$

3,149,280

  

$

3,001,987

 

INCOME FROM OPERATIONS

 

$

2,374,150

  

$

3,365,987

 

Interest income

  

30,393

   

12,562

 

Interest expense

  

(66,493)

   

(105,009)

 

Loss on disposal of property and equipment

  

-

   

(404)

 

Other income

  

417,382

   

261,032

 

INCOME BEFORE INCOME TAX

 

$

2,755,432

  

$

3,534,168

 

INCOME TAX

  

296,858

   

619,370

 

NET INCOME

 

$

2,458,574

  

$

2,914,798

 

LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST

  

1,011,599

   

1,127,746

 

NET INCOME ATTRIBUTABLE TO GREENLAND TECHNOLOGIES
    HOLDING CORPORATION AND SUBSIDIARIES

 

$

1,446,975

  

$

1,787,052

 

OTHER COMPREHENSIVE INCOME (LOSS):

  

317,332

   

373,910

 

Unrealized foreign currency translation income (loss) attributable to Greenland
    technologies holding corporation and subsidiaries

  

212,352

   

248,082

 

Unrealized foreign currency translation income (loss) attributable to Noncontrolling
    interest

  

104,980

   

125,828

 

Comprehensive income (loss)

  

1,659,327

   

2,035,134

 

Noncontrolling interest

  

1,116,579

   

1,253,574

 

WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:

        

Basic and diluted

  

12,978,504

   

11,329,530

 

NET INCOME PER ORDINARY SHARE ATTRIBUTABLE TO OWNERS OF
    THE COMPANY:

        

Basic and diluted

  

0.11

   

0.16

 

GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2023 AND DECEMBER 31, 2022

(IN U.S. DOLLARS)

 
  

March 31,

  

December 31,

 
  

2023

  

2022

 

ASSETS

      

Current assets

        

Cash and cash equivalents

 

$

15,401,387

  

$

16,295,695

 

Restricted cash

  

4,859,230

   

3,433,361

 

Short Term Investment

  

5,968,897

   

7,800,723

 

Notes receivable

  

28,979,885

   

28,748,879

 

Accounts receivable, net of allowance for doubtful accounts of $1,005,569 and
    $762,325, respectively

  

19,383,411

   

14,337,760

 

Inventories

  

22,502,791

   

23,096,382

 

Due from related parties-current

  

36,829,529

   

36,669,907

 

Advance to suppliers

  

626,646

   

412,766

 

Prepayments and other current assets

  

611,559

   

1,568,687

 

Total Current Assets

 

$

135,163,335

  

$

132,364,160

 
         

Non-current asset

        

Property, plant, equipment and construction in progress, net

  

15,165,621

   

15,585,214

 

Land use rights, net

  

3,632,351

   

3,639,067

 

Other intangible assets

  

133,422

   

147,465

 

Long term investment

  

300,000

   

250,000

 

Deferred tax assets

  

271,609

   

219,207

 

Operating lease right-of-use assets

  

2,503,903

   

2,627,110

 

Other non-current assets

  

255,339

   

283,118

 

Total non-current assets

 

$

22,262,245

  

$

22,751,181

 

TOTAL ASSETS

 

$

157,425,580

  

$

155,115,341

 

GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF MARCH 31, 2023 AND DECEMBER 31, 2022 (Continued)

(IN U.S. DOLLARS)

 
  

March 31,

  

December 31,

 
  

2023

  

2022

 
       

Current Liabilities

      

Short-term bank loans

 

$

7,717,398

  

$

8,986,255

 

Notes payable-bank acceptance notes

  

25,230,911

   

28,272,472

 

Accounts payable

  

28,421,937

   

24,817,165

 

Taxes payables

  

158,802

   

192,478

 

Customer deposits

  

196,028

   

227,432

 

Due to related parties

  

1,693,605

   

1,693,315

 

Other current liabilities

  

2,001,331

   

1,547,390

 

Current portion of operating lease liabilities

  

482,122

   

472,182

 

Total current liabilities

 

$

65,902,134

  

$

66,208,689

 
         

Long-term liabilities

        

Long term operating lease liabilities

  

2,048,848

   

2,176,130

 

Other long-term liabilities

  

1,780,929

   

1,812,759

 

Total long-term liabilities

 

$

3,829,777

  

$

3,988,889

 

TOTAL LIABILITIES

 

$

69,731,911

  

$

70,197,578

 
         

COMMITMENTS AND CONTINGENCIES

        

EQUITY

        

Ordinary shares, no par value, unlimited shares authorized; 12,978,504 and
    12,978,504 shares issued and outstanding as of March 31, 2023 and December 31,
     2022.

  

-

   

-

 

Additional paid-in capital

  

32,955,927

   

32,955,927

 

Statutory reserves

  

3,842,331

   

3,842,331

 

Retained earnings

  

38,675,236

   

37,228,261

 

Accumulated other comprehensive income (loss)

  

(2,619,067)

   

(2,831,419)

 

Total shareholders' equity

 

$

72,854,427

  

$

71,195,100

 

Non-controlling interest

  

14,839,242

   

13,722,663

 

TOTAL EQUITY

 

$

87,693,669

  

$

84,917,763

 
         

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$

157,425,580

  

$

155,115,341

 

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