Greenland Technologies Reports First Quarter 2023 Unaudited Financial Results
- 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 | $ | 1,446,975 | $ | 1,787,052 | ||||
OTHER COMPREHENSIVE INCOME (LOSS): | 317,332 | 373,910 | ||||||
Unrealized foreign currency translation income (loss) attributable to Greenland | 212,352 | 248,082 | ||||||
Unrealized foreign currency translation income (loss) attributable to Noncontrolling | 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 | ||||||||
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 | 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 | - | - | ||||||
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 | ||||
SOURCE Greenland Technologies Holding Corporation
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