CBAK Energy Reports Third Quarter 2021 Unaudited Financial Results

DALIAN, China, Nov. 12, 2021 /PRNewswire/ -- CBAK Energy Technology, Inc. (NASDAQ: CBAT) ("CBAK Energy," or the "Company") a leading lithium-ion battery manufacturer and electric energy solution provider in China, today reported its unaudited financial results for the third quarter ended September 30, 2021.

Third Quarter 2021 Financial Highlights

• Net revenues were $9.6 million. Excluding revenues from raw material trades, approximately $9.6 million was from high power lithium batteries business, a 51% year-over-year growth in high power lithium battery revenues over the same period of 2020.
• Gross profit was $1.1 million, a decrease of 17% from $1.4 million in the same period of 2020.
• Gross margin was 12%, a decrease of 1 percentage point from the same period of 2020.
• Net Income was $20.0 million, compared to net income of $41,715 in the same period of 2020.

Yunfei Li, Chairman and Chief Executive Officer of the Company, noted: "We are very pleased with our robust battery sales in the third quarter. Notably, revenues from high-power lithium batteries totaled $9.6 million, representing 51% year-over-year growth. These results attest to the quality and level of recognition our industry-leading products have in the market. 

Mr. Li continued: "As scheduled, we are expanding our production capacity despite global energy shortage and commodity price hikes. This is a much-needed action as the new capacity will yield positive business outcomes and augment our ability to supply. Additionally, in order to address growing and diversified demands for batteries, we made meaningful progress in research and development while extending our product portfolio. Our operations and growth strategies are well on track, which we believe solidifies our market-leading position and capabilities to deliver long-term growth in this thriving industry."

Xiangyu Pei, Interim Chief Financial Officer of the Company, noted: "Our financial performance for high-power lithium batteries remained solid in the third quarter, a testament to the strong demand for our advanced and dependable products. Despite the increase in commodity prices, raw material cost was carefully managed through our previous contracts that have locked prices for certain materials. As evidenced by our healthy financial position and vigorous growth, we have the capabilities for executing our growth strategies that will push us further on the path to consistent, sustainable success."

Third Quarter 2021 Business Highlights & Recent Developments

• In August, the Company secured performance certification from the world's leading testing, inspection and certification company SGS for its special 26650 lithium-ion battery, specifically designed for use in ultra-low temperatures.

Third Quarter 2021 Financial Results

Net revenues were $9.6 million. Revenues from high power lithium batteries was approximately $9.6 million, representing 51% year-over-year growth compared to the same period of 2020. The Company did not have new raw material trades in this quarter and had a minor adjustment in revenues from previous raw material trades, and the new production line installation in Dalian plant had a temporarily adverse impact on existing production.

Cost of revenues was $8.4 million, a decrease of 9% from $9.2 million in the same period of 2020.

Gross profit was $1.1 million, a decrease of 18% from $1.4 million in the same period of 2020. Gross margin was 12%, a decrease of 1 percentage point from the same period of 2020. The inflation in raw material prices resulted in the increase in production costs.

Total operating expenses were $4.3 million, an increase of 339% from $1.0 million in the same period of 2020. Most of the increase in all expense categories was due to growing headcount and research and development expenses associated with the Nanjing production facility, along with the expiration of the Chinese government's COVID-19 relief policy that had reduced social insurance contributions during the pandemic.

• Research and development expenses were $1.8 million, an increase of 307% from $0.4 million in the same period of 2020.  The increase in research and development expenses was also due to the Company's efforts in optimizing performance and cost-efficiency for battery products.
• Sales and marketing expenses were $0.5 million, an increase of 223% from $0.2 million in the same period of 2020. Given the growth in revenues from high power lithium batteries, we increased salaries and benefits for sales and marketing employees.
• General and administrative expenses were $2.2 million, an increase of 191% from $0.7 million in the same period of 2020.  The Company's rental expenses increased as it rented spaces for manufacturing, warehouse, and staff accommodation for the Nanjing production facility.
• Recovery of doubtful accounts was $0.2 million, compared to a recovery of doubtful accounts of $0.4 million in the same period of 2020.

Operating Loss was $3.2 million, compared to operating profit of $0.4 million in the same period of 2020.

Finance income, net was $0.1 million, compared to finance expenses of $0.4 million in the same period of 2020, and was a result of lower loan balances and interest income generated from vehicle leasing in 2021.

Change in fair value of warrant liabilities was $23.0 million, compared to nil in the same period of 2020. The change in fair value of warrant liabilities is mainly due to share price decline.

Net Income was $20.0 million, compared to net income of $41,715 in the same period of 2020.

Basic and diluted earnings per share were both $0.23. In comparison, basic and diluted earnings per share in the same period of 2020 were both $0.00.

Cash and cash equivalents were $2.0 million as of September 30, 2021, compared to $33.3 million as of June 30, 2021.

Conference Call

CBAK's management will host an earnings conference call at 8:00 AM U.S. Eastern Time on Friday, November 12, 2021 (9:00 PM Beijing/Hong Kong Time on November 12, 2021).

For participants who wish to join the call, please register in advance for the conference using the link provided below at least 15 minutes prior to the scheduled call start time. Upon registration, participants will receive the conference call access information, including dial-in numbers, Direct Event passcode, a unique registrant ID and an email with detailed instructions to join the conference call.

Participant Online Registration: 
http://apac.directeventreg.com/registration/event/9955106

Once completing the registration, please dial-in at least 10 minutes before the scheduled start time of the earnings call and enter the Direct Event passcode and registrant ID as instructed to connect to the call.

Additionally, a live and archived webcast of the conference call will be available at: https://edge.media-server.com/mmc/p/3k3p9eyw.

A replay of the conference call may be accessed by phone approximately two hours after the conclusion of the live call at the following numbers until November 20, 2021. To access the replay, please reference the conference ID 5182755.

About CBAK Energy

CBAK Energy Technology, Inc. (NASDAQ:CBAT）is a leading high-tech enterprise in China engaged in the development, manufacturing, and sales of new energy high power lithium batteries. The applications of the Company's products and solutions include light electric vehicles, electric vehicles, electric tools, energy storage, uninterruptible power supply (UPS), and other high-power applications. In January 2006, CBAK Energy became the first lithium battery manufacturer in China listed on the Nasdaq Stock Market. CBAK Energy has multiple operating subsidiaries in Dalian and Nanjing, as well as a large-scale R&D and production base in Dalian.

For more information, please visit www.cbak.com.cn.

Safe Harbor Statement

This press release contains forward-looking statements, which are subject to change. The forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. All "forward-looking statements" relating to the business of CBAK Energy Technology, Inc. and its subsidiary companies, which can be identified by the use of forward-looking terminology such as "believes", "expects" or similar expressions, involve known and unknown risks and uncertainties which could cause actual results to differ materially. These factors include but are not limited to: the ability of the Company to meet its contract or agreement obligations; the uncertain market for the Company's lithium battery cells; business, macroeconomic, technological, regulatory, or other factors affecting the profitability of battery cells designed for energy storage; and risks related to CBAK Energy's business and risks related to operating in China. Please refer to CBAK Energy's most recent Annual Report on Form 10-K, as well as other SEC reports that have been filed since the date of such annual report, for specific details on risk factors. Given these risks and uncertainties, you are cautioned not to place undue reliance on forward-looking statements. CBAK Energy's actual results could differ materially from those contained in the forward-looking statements. CBAK Energy undertakes no obligation to revise or update its forward-looking statements in order to reflect events or circumstances that may arise after the date of this release unless expressly requested by applicable law.

For investor and media inquiries, please contact:

In China:

CBAK Energy Technology, Inc.
Investor Relations Department
Phone: 86-411-39185985
Email: [email protected]

The Blueshirt Group
Ms. Feifei Shen
Phone: +86 13466566136
Email: [email protected]

The Blueshirt Group
Ms. Suwen Feng
Phone: +86 13917110134
Email: [email protected]

In the United States:

The Blueshirt Group
Ms. Julia Qian
Phone: +1 973-619-3227
Email: [email protected]

SOURCE CBAK Energy Technology, Inc.