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 second quarter and first half ended June 30, 2022.
First Half 2022 Financial and Operating Highlights
Second Quarter 2022 Financial and Operating Highlights
Mr. Raymond Wang, Chief Executive Officer of Greenland Technologies Holding Corporation, commented, "We posted strong underlying results but we were adversely impacted by recent FX moves (USD vs CNY) and we were not immune to the supply chain and COVID-19 shutdowns that impacted the broader market. Despite the many macro challenges in 2Q 2022, our revenue for the first half of 2022 was only down 5.5%, as compared to the first half of 2021. In addition, COVID-19 shutdowns in China resulted in customer closures and the pushout of orders. As a result, we ended 2Q 2022 with a higher backlog than normal but have a high degree of confidence that the shifting of those orders will result in a stronger second half of 2022 than the first half of 2022."
Mr. Wang added, "Overall, our underlying core business remains strong, our industry remains healthy and demand remains high. Greenland has been consistently outperforming over the last nine quarters and we remain focused on the continued execution of our long-term strategy. From an EV standpoint, we continue to hit all stated milestones. We launched our latest electric industrial vehicle in 2Q 2022, the GEL-5000 electric front loader, and we established our new Maryland facility. We plan to officially open our Maryland facility at the end of August, with our U.S. assembly space secure and live, and our longer-term capacity ramp underway."
Mr. Jing Jin, Chief Financial Officer of Greenland, commented: "While China's pandemic shutdowns and supply disruptions added pressure to our 2Q 2022 financial results, we were still able to drive a 330 basis point expansion in our gross margin to 23.5%. This reflects the strong fundamentals of our business and our success in developing higher-value products. Additionally, we further strengthened our balance sheet with $10 million in proceeds from registered direct and private placement offerings in July. This gives us the ability to support existing customer demand, our expanded product roadmap and revenue-generating efforts, as we build value for shareholders."
Recent Developments and Strategic Highlights:
First Half 2022 Financial Results
Total revenues were $49.9 million, a decrease of 6% from $52.8 million in the first half of 2021, primarily due to the decrease in sales volume resulting from China's COVID-19 lockdowns. On an RMB basis, total revenues decreased by approximately 5% from the first half of 2021.The number of transmission products sold was 70,841 units, down 10% from 79,032 units in the first half of 2021.
Costs of goods sold were $38.7 million, a decrease of 8% from $42 million in the first half of 2021, primarily due to the decrease in sales volume.
Gross profit was $11.2 million, an increase of 4% from $10.8 million in the first half of 2021. Gross margin was 22.5%, an increase of 200 basis points from 20.5% in the first half of 2021, as a result of the Company's strategic shift towards higher value, more sophisticated products such as hydraulic transmissions.
Total operating expenses were $5.6 million, up 25% from $4.5 million in the first half of 2021. Operating expenses as a percentage of total revenues was 11.3%, compared with 8.5% in the first half of 2021. The increase in operating expenses was primarily due to the Company's investments in support of its growth strategy.
Income from operations was $5.6 million, a decrease of 12% from $6.3 million in the first half of 2021.
Net Income was $5.3 million, a decrease of 5% from $5.6 million in the first half of 2021.
Basic and diluted net income per ordinary share was $0.29, compared with $0.46 in the first half of 2021.
Second Quarter 2022 Financial Results
Total revenues were $20.6 million, a decrease of 27% from $28.2 million in the second quarter of 2021, primarily due to the decrease in sales volume resulting from China's COVID-19 lockdowns. On an RMB basis, total revenues decreased by approximately 24% from the second quarter of 2021.The number of transmission products sold was 28,939 units, down 31% from 42,046 units in the second quarter of 2021.
Costs of goods sold were $15.8 million, a decrease of 30% from $22.5 million in the second quarter of 2021, primarily due to the decrease in sales volume.
Gross profit was $4.8 million, a decrease of 15% from $5.7 million in the second quarter of 2021. Gross margin was 23.5%, an increase of 330 basis points from 20.2% in the second quarter of 2021, as a result of the Company's strategic shift towards higher value, more sophisticated products such as hydraulic transmissions.
Total operating expenses were $2.6 million, up 17% from $2.3 million in the second quarter of 2021. Operating expenses as a percentage of total revenues was 12.7%, compared with 8% in the second quarter of 2021. The increase in operating expenses was primarily due to the Company's investments in support of its growth strategy.
Income from operations was $2.2 million, a decrease of 36% from $3.5 million in the second quarter of 2021.
Net Income was $2.4 million, a decrease of 25% from $3.2 million in the second quarter of 2021.
Basic and diluted net income per ordinary share was $0.13, compared with $0.26 in the second quarter of 2021.
Conference Call
Greenland Technologies management will host an earnings conference call at 8:00 AM on Friday, August 12, 2022, U.S. Eastern Time (8:00 PM on August 12, 2022, Beijing/Hong Kong Time).
Participant Registration:
Investors and analysts interested in participating in Greenland's second quarter and first half 2022 earnings call need to register in advance using the URL provided below. Conference access information will be provided once registration has been completed.
Participant Online Pre-Registration: https://s1.c-conf.com/diamondpass/10024507-dg7s6d.html
A replay of the conference call may be accessed by phone at the following numbers until August 19, 2022. To access the replay, please reference the Replay PIN 10024507.
Phone Number | |
International | +61 7 3107-6325 |
United States | +1 (855) 883-1031 |
Hong Kong | +852 800930639 |
Mainland China | +86 4001209216 |
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 Equipment.
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 and Definitive Proxy Statement on Schedule 14A filed with the 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 AND SIX MONTHS ENDED JUNE 30, 2022 AND 2021 | ||||||||||||||||
(UNAUDITED, IN U.S. DOLLARS) | ||||||||||||||||
For the three months June 30, | For the six months June 30, | |||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
REVENUES | $ | 20,602,505 | $ | 28,204,307 | $ | 49,909,462 | $ | 52,815,201 | ||||||||
COST OF GOODS SOLD | 15,763,344 | 22,499,138 | 38,702,327 | 42,005,645 | ||||||||||||
GROSS PROFIT | 4,839,161 | 5,705,169 | 11,207,135 | 10,809,556 | ||||||||||||
Selling expenses | 518,088 | 495,462 | 1,157,735 | 874,692 | ||||||||||||
General and administrative expenses | 1,244,634 | 752,212 | 2,524,380 | 1,663,351 | ||||||||||||
Research and development expenses | 862,535 | 1,005,296 | 1,945,129 | 1,964,841 | ||||||||||||
Total operating expenses | $ | 2,625,257 | $ | 2,252,970 | $ | 5,627,244 | $ | 4,502,884 | ||||||||
INCOME FROM OPERATIONS | $ | 2,213,904 | $ | 3,452,199 | $ | 5,579,891 | $ | 6,306,672 | ||||||||
Interest income | 9,887 | 4,833 | 22,449 | 9,428 | ||||||||||||
Interest expense | (91,651) | (221,664) | (196,660) | (401,853) | ||||||||||||
Loss on disposal of property and equipment | 10 | 811 | (394) | (959) | ||||||||||||
Other income | 501,710 | 310,303 | 762,742 | 599,049 | ||||||||||||
INCOME BEFORE INCOME TAX | $ | 2,633,860 | $ | 3,546,482 | $ | 6,168,028 | $ | 6,512,337 | ||||||||
INCOME TAX | 254,434 | 394,159 | 873,804 | 916,775 | ||||||||||||
NET INCOME | $ | 2,379,426 | $ | 3,152,323 | $ | 5,294,224 | $ | 5,595,562 | ||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING | 892,162 | 371,570 | 2,019,908 | 686,241 | ||||||||||||
NET INCOME ATTRIBUTABLE TO GREENLAND | $ | 1,487,264 | $ | 2,780,753 | $ | 3,274,316 | $ | 4,909,321 | ||||||||
OTHER COMPREHENSIVE INCOME (LOSS): | (4,075,452) | 833,963 | (3,701,542) | 575,734 | ||||||||||||
Unrealized foreign currency translation income (loss) | (2,720,040) | 591,484 | (2,471,958) | 402,381 | ||||||||||||
Unrealized foreign currency translation income (loss) | (1,355,412) | 242,479 | (1,299,584) | 173,353 | ||||||||||||
Comprehensive income (loss) | (1,232,776) | 3,372,237 | 802,358 | 5,311,702 | ||||||||||||
Noncontrolling interest | (463,250) | 614,049 | 790,324 | 859,594 | ||||||||||||
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING: | ||||||||||||||||
Basic and diluted | 11,329,530 | 10,814,479 | 11,329,530 | 10,574,223 | ||||||||||||
NET INCOME PER ORDINARY SHARE ATTRIBUTABLE TO | ||||||||||||||||
Basic and diluted | 0.13 | 0.26 | 0.29 | 0.46 | ||||||||||||
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
AS OF JUNE 30, 2022 AND DECEMBER 31, 2021 | ||||||||
(IN U.S. DOLLARS) | ||||||||
June 30, | December 31, | |||||||
2022 | 2021 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 3,217,925 | $ | 11,062,590 | ||||
Restricted cash | 4,819,779 | 6,738,302 | ||||||
Short Term Investment | 7,666,483 | 2,105,938 | ||||||
Notes receivable | 33,019,721 | 37,551,121 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $822,482 and | 18,194,405 | 15,915,002 | ||||||
Inventories | 23,948,131 | 25,803,474 | ||||||
Due from related parties-current | 37,654,097 | 39,679,565 | ||||||
Advance to suppliers | 703,149 | 434,893 | ||||||
Prepayments and other current assets | 89,402 | 14,518 | ||||||
Total Current Assets | $ | 129,313,092 | $ | 139,305,403 | ||||
Non-current asset | ||||||||
Property, plant, equipment and construction in progress, net | 17,001,960 | 18,957,553 | ||||||
Land use rights, net | 3,793,171 | 4,035,198 | ||||||
Other intangible assets | 30,294 | - | ||||||
Deferred tax assets | 134,740 | 141,623 | ||||||
Goodwill | 3,890 | 3,890 | ||||||
Operating lease right-of-use assets | 64,176 | 80,682 | ||||||
Other non-current assets | 44,335 | 44,093 | ||||||
Total non-current assets | $ | 21,072,566 | $ | 23,263,039 | ||||
TOTAL ASSETS | $ | 150,385,658 | $ | 162,568,442 | ||||
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
AS OF JUNE 30, 2022 AND DECEMBER 31, 2021 (Continued) | ||||||||
(IN U.S. DOLLARS) | ||||||||
June 30, | December 31, | |||||||
2022 | 2021 | |||||||
Current Liabilities | ||||||||
Short-term bank loans | $ | 9,081,680 | $ | 8,760,945 | ||||
Notes payable-bank acceptance notes | 33,752,065 | 42,093,061 | ||||||
Accounts payable | 25,843,583 | 29,064,132 | ||||||
Taxes payables | - | 108,058 | ||||||
Customer deposits | 272,140 | 387,919 | ||||||
Due to related parties | 1,598,109 | 3,619,459 | ||||||
Other current liabilities | 1,276,059 | 1,198,427 | ||||||
Current portion of operating lease liabilities | 34,331 | 33,308 | ||||||
Lease obligations - current | - | 197,915 | ||||||
Total current liabilities | $ | 71,857,967 | $ | 85,463,224 | ||||
Long-term liabilities | ||||||||
Lease obligations – non-current | - | - | ||||||
Long term operating lease liabilities | 30,205 | 47,614 | ||||||
Other long-term liabilities | 1,983,069 | 2,212,938 | ||||||
Total long-term liabilities | $ | 2,013,274 | $ | 2,260,552 | ||||
TOTAL LIABILITIES | $ | 73,871,241 | $ | 87,723,776 | ||||
COMMITMENTS AND CONTINGENCIES | ||||||||
EQUITY | ||||||||
Ordinary shares, no par value, unlimited shares authorized; 11,329,530 and | - | - | ||||||
Additional paid-in capital | 23,836,433 | 23,759,364 | ||||||
Statutory reserves | 3,842,331 | 3,842,331 | ||||||
Retained earnings | 36,943,012 | 33,668,696 | ||||||
Accumulated other comprehensive income (loss) | (1,457,559) | 1,014,399 | ||||||
Total shareholders' equity | $ | 63,164,217 | $ | 62,284,790 | ||||
Non-controlling interest | 13,350,200 | 12,559,876 | ||||||
TOTAL EQUITY | $ | 76,514,417 | $ | 74,844,666 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 150,385,658 | $ | 162,568,442 | ||||
| Last Trade: | US$2.43 |
| Daily Change: | 0.23 10.45 |
| Daily Volume: | 188,128 |
| Market Cap: | US$33.020M |
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