Tantech Announces Interim Financial Results for Six Months Ended June 30, 2020
Reports 9.3% Increase in Revenue and 100% Increase in Earnings Per Share
LISHUI, China, Sept. 30, 2020 /PRNewswire/ -- Tantech Holdings Ltd. (NASDAQ: TANH), ("Tantech" or the "Company"), a clean energy company in China, today announced its unaudited interim financial results for the six months ended June 30, 2020.
Financial Highlights
For the Six Months Ended June 30, | ||||||||||||
($ millions, expect per share data and percentages) | 2020 | 2019 | %Change | |||||||||
Revenues | $ | 22.9 | $ | 21.0 | 9.3% | |||||||
Consumer product | $ | 16.2 | $ | 20.7 | (21.9)% | |||||||
Trading | $ | 6.3 | $ | 0.2 | 3,180% | |||||||
Gross profit | $ | 3.1 | $ | 3.7 | (16.5)% | |||||||
Gross margin | 13.4% | 17.6% | (4.2) percentage points | |||||||||
Operating margin | 7.9% | 9.0% | (1.1) percentage points | |||||||||
Net income from continuing operations | $ | 1.0 | $ | 1.2 | （18.5)% | |||||||
Net income (loss) from discontinued operations | $ | 0.00 | $ | (0.76) | (100)% | |||||||
Net income | $ | 1.0 | $ | 0.4 | 125.3% | |||||||
Basic/ Diluted earnings per share | $ | 0.04 | $ | 0.02 | 100% | |||||||
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Mr. Wangfeng Yan, Chief Executive Officer of Tantech, said, "2020 has been a very challenging year across all industries worldwide. We are truly fortunate that we were able to help people in this time of incredible need and loss. Revenue in our trading segment surged to $6.3 million in the first six months of 2020 from $0.2 million in the year ago period. The strong increase was driven by demand for our bamboo charcoal used for active charcoal masks, air purification and sanitation products in order to combat COVID-19. This growth more than offset the decline in our consumer product segment, which declined due to the temporary suspension of manufacturing activities in compliance with government restrictions around COVID-19. We were able to restart manufacturing activities in the middle of February but had to work with customers and suppliers that continued to face business disruptions and closures. We are pleased to report that we have seen a steady rebound in sales in our consumer product segment, with demand strong through September, as customers continued to purchase our cleaning, purification and deodorization products. We are working to meet the higher than normal seasonal demand levels and expect higher growth in the second half of 2020. Earlier investments we made in our brand, supply chain, strategic inventory and time spent nurturing meaningful relationships are proving critical to us as we maintain full access to raw materials, production facilities and our distribution channel."
"Given the challenging macro environment at the start of 2020, we made the strategic decision to temporarily scale back our EV development and production efforts at the same time we temporarily suspended our consumer product manufacturing activities. In addition to the COVID-19 closures in the first half of 2020, it was evident our EV production costs would not be covered due to changes in the government rebate policy issued in 2019. We have since resumed full activities in this segment given the strong underlying market growth dynamics for electric vehicles led by a sustainability focus, China's environmental protection policy, and an improved, state-of-the-art driver experience. We are building our presence slowly and methodically, in order to maximize the impact of our R&D investments and technology advancements in specialty-use EV motors rather than the more competitive, domestic general consumer EV market. We are confident in our position and remain fully committed to the EV sector, which we expect will be a key long-term growth driver for us, but are also open to evaluating certain international markets in Asia, including those for gasoline powered motors, as we strive to maintain well-balanced working capital and positive operating cash flow."
About Tantech Holdings Ltd.
Established in 2001 and headquartered in Lishui City, Zhejiang Province, China, Tantech, together with its subsidiaries, is now, in addition to be a developer and manufacturer of bamboo-based charcoal, an innovative leader in the design, manufacture and distribution of electric vehicles. The Company has also invested in mining business in 2018 and 2019.
For more information please visit: http://ir.tantech.cn.
Forward-Looking Statements
This news 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. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulations, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by this cautionary statement and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
Tantech Holdings Ltd and Subsidiaries
Condensed Consolidated Balance Sheets
(Unaudited)
June 30, | December 31, | |||||||
2020 | 2019 | |||||||
Assets | ||||||||
Current Assets | ||||||||
Cash and cash equivalents (Note 3 at VIE) | $ | 15,418,825 | $ | 12,440,457 | ||||
Restricted cash (Note 3 at VIE) | 2,830 | 205,520 | ||||||
Accounts receivable, net (Note 3 at VIE) | 43,407,119 | 39,352,408 | ||||||
Inventories, net (Note 3 at VIE) | 1,898,128 | 595,627 | ||||||
Advances to suppliers, net (Note 3 at VIE) | 3,328,762 | 13,079,889 | ||||||
Advances to suppliers – related party | 1,415,000 | - | ||||||
Prepaid taxes (Note 3 at VIE) | 2,249,606 | 2,396,349 | ||||||
Prepaid expenses and other receivables, net (Note 3 at VIE) | 81,801 | 91,377 | ||||||
Total Current Assets (Note 3 at VIE) | 67,802,071 | 68,161,627 | ||||||
Property, plant and equipment, net (Note 3 at VIE) | 2,419,897 | 2,700,034 | ||||||
Other Assets | ||||||||
Manufacturing rebate receivable (Note 3 at VIE) | 7,632,838 | 7,746,116 | ||||||
Intangible assets, net (Note 3 at VIE) | 12,553,791 | 12,959,017 | ||||||
Long-term Investment | 23,534,705 | 23,883,983 | ||||||
Total Other Assets (Note 3 at VIE) | 43,721,334 | 44,589,116 | ||||||
Total Assets (Note 3 at VIE) | $ | 113,943,302 | $ | 115,450,777 | ||||
Liabilities and Stockholders' Equity | ||||||||
Current Liabilities | ||||||||
Short-term bank loans | $ | 6,619,370 | $ | 6,861,208 | ||||
Bank acceptance notes payable (Note 3 at VIE) | 1,417,830 | 205,520 | ||||||
Accounts payable (Note 3 at VIE) | 2,653,740 | 1,650,851 | ||||||
Due to related parties (Note 3 at VIE) | 1,055,926 | 1,626,120 | ||||||
Customer deposits (Note 3 at VIE) | 3,959,521 | 6,955,142 | ||||||
Taxes payable (Note 3 at VIE) | 396,930 | 102,704 | ||||||
Due to third parties | 283,000 | 287,200 | ||||||
Accrued liabilities and other payables (Note 3 at VIE) | 1,655,377 | 1,444,896 | ||||||
Total Current Liabilities (Note 3 at VIE) | 18,041,694 | 19,133,641 | ||||||
Deferred tax liability (Note 3 at VIE) | 1,758,774 | 1,784,875 | ||||||
Total Liabilities (Note 3 at VIE) | 19,800,468 | 20,918,516 | ||||||
Stockholders' Equity | ||||||||
Common stock, $0.001 par value, 50,000,000 shares authorized, 28,888,834 and 28,853,242 shares issued and outstanding | 28,889 | 28,853 | ||||||
Additional paid-in capital | 39,343,954 | 39,310,178 | ||||||
Statutory reserves | 6,379,276 | 6,379,276 | ||||||
Retained earnings | 53,283,096 | 52,058,681 | ||||||
Accumulated other comprehensive loss | (8,986,623) | (7,590,943) | ||||||
Total Stockholders' Equity attributable to the Company | 90,048,592 | 90,186,045 | ||||||
Noncontrolling interest | 4,094,242 | 4,346,216 | ||||||
Total Stockholders' Equity | 94,142,834 | 94,532,261 | ||||||
Total Liabilities and Stockholders' Equity | $ | 113,943,302 | $ | 115,450,777 | ||||
Tantech Holdings Ltd and Subsidiaries
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)
For the Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
Revenues | $ | 22,889,784 | $ | 20,950,575 | ||||
Cost of revenues | 19,817,263 | 17,271,777 | ||||||
Gross Profit | 3,072,521 | 3,678,798 | ||||||
Operating expenses | ||||||||
Selling expenses | 201,217 | 266,516 | ||||||
General and administrative expenses | 763,945 | 1,480,952 | ||||||
Research and development expenses | 302,553 | 35,751 | ||||||
Total operating expenses | 1,267,715 | 1,783,219 | ||||||
Income (loss) from operations | 1,804,806 | 1,895,579 | ||||||
Other income (expenses) | ||||||||
Interest income | 17,962 | 31,614 | ||||||
Interest expense | (184,228) | (228,855) | ||||||
Government subsidy income | 10,926 | - | ||||||
Other income, net | 6,593 | 38,200 | ||||||
Total other income (expenses) | (148,807) | (159,041) | ||||||
Income before provision for income taxes | 1,655,999 | 1,736,538 | ||||||
Provision for income taxes | 684,804 | 545,520 | ||||||
Net income from continuing operations | 971,195 | 1,191,018 | ||||||
Discontinued operation: | ||||||||
Income from discontinued operations, net of tax | - | (759,695) | ||||||
Net income from discontinued operations | - | (759,695) | ||||||
Net income | 971,195 | 431,323 | ||||||
Less: net loss attributable to noncontrolling interest from continuing operations | (253,220) | (233,808) | ||||||
Net income attributable to common stockholders of Tantech Holdings Ltd. | $ | 1,224,415 | $ | 665,131 | ||||
Net income | 971,195 | 431,323 | ||||||
Other comprehensive income (loss): | ||||||||
Foreign currency translation adjustment | (1,394,434) | (4,059,144) | ||||||
Comprehensive income (loss) | (423,239) | (3,627,821) | ||||||
Less: Comprehensive loss attributable to noncontrolling interest | (251,974) | (218,403) | ||||||
Comprehensive income (loss) attributable to common stockholders of Tantech Holdings Ltd. | $ | (171,265) | $ | (3,409,418) | ||||
Earnings (loss) per share - Basic and Diluted | ||||||||
Continuing operations | $ | 0.04 | $ | 0.05 | ||||
Discontinued operations | $ | - | $ | (0.03) | ||||
Total | $ | 0.04 | $ | 0.02 | ||||
Weighted Average Shares Outstanding - Basic and diluted | ||||||||
Continuing operations and discontinued operations | 28,872,602 | 28,853,242 | ||||||
Tantech Holdings Ltd and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
For the Six Months Ended June 30, | ||||||||
2020 | 2019 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 971,195 | $ | 431,323 | ||||
Net loss from discontinued operations | - | 759,695 | ||||||
Net income from continuing operations | 971,195 | 1,191,018 | ||||||
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation expense | 227,049 | 237,039 | ||||||
Amortization of intangible asset | 216,781 | 224,708 | ||||||
Amortization of prepaid consulting expense | - | 140,738 | ||||||
Loss (gain) from disposal of property, plant and equipment | 2,867 | (8,017) | ||||||
Issuance of common stock for service | 33,812 | - | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable - non-related party | (4,653,105) | (2,250,145) | ||||||
Advances to suppliers | 9,607,140 | 8,132,865 | ||||||
Advances to suppliers- related party | (1,422,000) | - | ||||||
Inventory | (1,317,697) | 123,653 | ||||||
Prepaid expenses and other receivables | 8,280 | (17,958) | ||||||
Manufacturing rebate receivable | - | 1,591,920 | ||||||
Accounts payable | 1,032,112 | (303,835) | ||||||
Accrued liabilities and other payables | 232,756 | (370,284) | ||||||
Customer deposits | (2,908,226) | 69,605 | ||||||
Taxes payable | 409,442 | (25,988) | ||||||
Net cash provided by continuing operations | 2,440,406 | 8,735,319 | ||||||
Net cash provided by discontinued operations | - | 2,630,211 | ||||||
Net cash provided by operating activities | 2,440,407 | 11,365,530 | ||||||
Cash flows from investing activities | ||||||||
Acquisition of property, plant and equipment | (9,524) | (104,815) | ||||||
Proceeds from disposal of property, plant and equipment | 21,450 | 16,214 | ||||||
Net cash provided by (used in) continuing operations | 11,926 | (88,601) | ||||||
Net cash used in discontinued operations | - | (470) | ||||||
Net cash provided by (used in) investing activities | 11,926 | (89,071) | ||||||
Cash flows from financing activities | ||||||||
Proceeds from (repayment of) loans from third parties | - | (2,874,595) | ||||||
Bank acceptance notes payable, net of repayment | 1,221,327 | (2,048,388) | ||||||
Proceeds from bank loans | 6,652,116 | 4,242,172 | ||||||
Repayment of bank loans | (6,794,316) | (4,684,372) | ||||||
Repayment of loans from related parties, net | (557,765) | (534,993) | ||||||
Net cash used in continuing operations | 521,362 | (5,900,176) | ||||||
Net cash provided by discontinued operations | - | - | ||||||
Net cash used in financing activities | 521,362 | (5,900,176) | ||||||
Effect of exchange rate changes on cash, restricted cash and cash equivalents | (198,016) | (429,963) | ||||||
Net increase (decrease) in cash, restricted cash and cash equivalents | 2,775,678 | 4,946,320 | ||||||
Cash, restricted cash and cash equivalents, beginning of year | 12,645,977 | 9,869,793 | ||||||
Cash, restricted cash and cash equivalents, end of year | $ | 15,421,655 | $ | 14,816,113 | ||||
Supplemental disclosure information: | ||||||||
Income taxes paid | $ | 28,487 | $ | 581,843 | ||||
Interest paid | $ | 168,560 | $ | 237,568 | ||||
SOURCE Tantech Holdings Ltd.
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