CCSC Technology International Holdings Limited Reports Financial Results for Fiscal Year 2024
HONG KONG, July 22, 2024 /PRNewswire/ -- CCSC Technology International Holdings Limited (the "Company" or "CCSC") (NASDAQ:CCTG), a Hong Kong-based company that engages in the sale, design and manufacturing of interconnect products, including connectors, cables and wire harnesses, today announced its financial results for the fiscal year ended March 31, 2024.
Mr. Kung Lok Chiu, Chief Executive Officer and Director of the Company, commented, "We believe we have demonstrated resilience and adaptability throughout a challenging fiscal year 2024. Despite market fluctuations, we remain dedicated to innovation and excellence. We have worked to enhance our operational efficiencies and invested strategically in research and development to advance our product developments. Additionally, our Nasdaq listing in January 2024 marks a significant milestone for the Company, providing us with a platform for future growth. Furthermore, we entered into a strategic cooperation framework agreement with Innogetic International Limited ("Innogetic") in May 2024. In the future, we anticipate exploring and applying digital technology such as artificial intelligence ("AI") in the field of manufacturing to further advancements in our business. As we explore AI applications in the manufacturing sector in partnership with Innogetic, we endeavor to further the innovation and efficiency in our manufacturing process and enhance our position in the industry. Moreover, CCSC is planning to commence construction of a new European supply chain management center in the Republic of Serbia in second half of 2024. We believe that this strategic expansion, if and when it is established, will support our business by driving long-term growth."
"We are committed to adopting advanced technologies, developing replicable and scalable solutions, and fostering innovative ideas and products. Looking forward, we are excited about our strategic initiatives aimed at market expansion, product innovation, and enhancing client services. We believe that our commitment to quality and customer satisfaction can drive us forward and create long-term value for our shareholders," concluded Mr. Kung Lok Chiu.
Fiscal Year 2024 Financial Highlights
- Revenue was $14.7 million for fiscal year 2024, compared to $24.1 million for fiscal year 2023.
- Gross profit was $3.9 million for fiscal year 2024, compared to $7.9 million for fiscal year 2023.
- Loss from operations was $1.8 million for fiscal year 2024, compared to income from operations of $1.8 million for fiscal year 2023.
- Net loss was $1.3 million for fiscal year 2024, compared to net income of $2.2 million for fiscal year 2023.
- Basic and diluted loss per share was $0.13 for fiscal year 2024, compared to basic and diluted earnings per share of $0.22 for fiscal year 2023.
Fiscal Year 2024 Financial Results
Revenue
Total revenue was $14.7 million for fiscal year 2024, which decreased by 38.7% from $24.1 million for fiscal year 2023.
The following table sets forth revenue by interconnect products:
For the years ended March 31, | Change | |||||||||||||||||||||||
($ millions) | 2024 | % | 2023 | % | Amount | % | ||||||||||||||||||
Cables and wire harnesses | 13.6 | 92.4 | % | 22.2 | 92.3 | % | (8.6) | (38.7) | % | |||||||||||||||
Connectors | 1.1 | 7.6 | % | 1.8 | 7.7 | % | (0.7) | (39.3) | % | |||||||||||||||
Total | 14.7 | 100.0 | % | 24.0 | 100.0 | % | (9.3) | (38.7) | % | |||||||||||||||
Revenue generated from cables and wire harnesses decreased by 38.7%, to $13.6 million for fiscal year 2024, from $22.2 million for fiscal year 2023. Revenue generated from connectors decreased by 39.3%, to $1.1 million for fiscal year 2024, from $1.8 million for fiscal year 2023.
The decrease was primarily attributable to the decrease in the total sales volume due to customers' shift towards zero inventory instead of advanced procurement, and the decrease of the average selling price of our products for fiscal year 2024.
The following table sets forth the disaggregation of revenue by regions:
For the years ended March 31, | Change | |||||||||||||||||||||||
($ millions) | 2024 | % | 2023 | % | Amount | % | ||||||||||||||||||
Europe | 8.5 | 57.8 | % | 15.0 | 62.5 | % | (6.5) | (43.3) | % | |||||||||||||||
Asia | 4.8 | 32.8 | % | 7.4 | 30.9 | % | (2.6) | (34.9) | % | |||||||||||||||
Americas | 1.4 | 9.4 | % | 1.6 | 6.6 | % | (0.2) | (12.4) | % | |||||||||||||||
Total | 14.7 | 100.0 | % | 24.0 | 100.0 | % | (9.3) | (38.7) | % | |||||||||||||||
Revenue generated from Europe decreased by 43.3%, to $8.5 million for fiscal year 2024, from $15.0 million for fiscal year 2023. The decrease was primarily due to the decrease of sales in Denmark, Hungary and Bulgaria, which was partially offset by the increase of sales in Italy.
Revenue generated from Asia decreased by 34.9%, to $4.8 million for fiscal year 2024, from $7.4 million for fiscal year 2023. The decrease was primarily due to sales decreases in China of $1.6 million, and sales decreases in the Association of Southeast Asian Nations, or ASEAN, of $1.0 million.
Revenue generated from the Americas decreased by 12.4%, to $1.4 million for fiscal year 2024, from $1.6 million for fiscal year 2023. The decrease was primarily due to the sales decrease in North America of $0.2 million.
Cost of Revenue
Cost of revenue decreased by 33.1%, to $10.8 million for fiscal year 2024, from $16.2 million for fiscal year 2023, which was in line with the decrease of total revenue.
Inventory costs amounted to $7.3 million for fiscal year 2024, compared to $12.1 million for fiscal year 2023. The decrease of inventory costs was primarily due to a 44.1% decrease in the total sales volume, which was partially offset by an 8.5% increase in the inventory cost per unit.
Labor costs amounted to $2.5 million for fiscal year 2024, compared to $2.9 million for fiscal year 2023. The decrease of labor costs was primarily because we reduced the number of manufacturing employees.
Gross Profit and Gross Margin
Gross profit decreased by 50.1%, to $3.9 million for fiscal year 2024, from $7.9 million for fiscal year 2023.
Gross profit margin decreased by 6.1%, to 26.6% for fiscal year 2024, from 32.7% for fiscal year 2023.
Operating Expenses
Operating expenses decreased by 5.1%, to $5.8 million for fiscal year 2024, from $6.1 million for fiscal year 2023. The expense reduction was mainly due to the decline in selling expenses and research and development expenses. The decrease was partially offset by the increase in the general and administrative expenses.
Other Income
Other income decreased to $0.5 million for fiscal year 2024, from $0.7 million for fiscal year 2023.
Net (Loss)/Income
Net income decreased by 158.7%, to net loss of $1.3 million for fiscal year 2024, from net income of $2.2 million for fiscal year 2023.
Basic and Diluted (Loss)/Earnings per Share
Basic and diluted loss per share was $0.13 for fiscal year 2024, compared to earnings per share of $0.22 for fiscal year 2023.
About CCSC Technology International Holdings Limited
CCSC Technology International Holdings Limited, is a Hong Kong-based company that engages in the sale, design and manufacturing of interconnect products. The Company specializes in customized interconnect products, including connectors, cables and wire harnesses that are used for a range of applications in a diversified set of industries, including industrial, automotive, robotics, medical equipment, computer, network and telecommunication, and consumer products. The Company produces both OEM ("original equipment manufacturer") and ODM ("original design manufacture") interconnect products for manufacturing companies that produce end products, as well as electronic manufacturing services ("EMS") companies that procure and assemble products on behalf of such manufacturing companies. The Company has a diversified global customer base located in more than 25 countries throughout Asia, Europe and the Americas. For more information, please visit the Company's website: http://ir.ccsc-interconnect.com.
Forward-Looking Statements
Certain statements in this announcement are forward-looking statements, including, but not limited to, the Company's proposed Offering. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as "may," "will," "could," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "is/are likely to," "propose," "potential," "continue", or other similar expressions in this press release. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the U.S. Securities and Exchange Commission.
For more information, please contact:
CCSC Technology International Holdings Limited
Investor Relations Department
Email: [email protected]
Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: [email protected]
CCSC TECHNOLOGY INTERNATIONAL HOLDINGS LIMITED | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
(Amount in U.S. dollars, except for number of shares) | ||||||||
As of March 31, | ||||||||
2024 | 2023 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash | $ | 5,525,430 | $ | 7,708,310 | ||||
Restricted cash | 209,317 | 9,305 | ||||||
Accounts receivable | 2,750,214 | 2,260,222 | ||||||
Inventories, net | 2,023,456 | 2,187,518 | ||||||
Deferred initial public offering costs | - | 1,051,038 | ||||||
Prepaid expenses and other current assets | 1,474,405 | 814,308 | ||||||
Total current assets | 11,982,822 | 14,030,701 | ||||||
Non-current assets: | ||||||||
Property, plant and equipment, net | 198,901 | 211,949 | ||||||
Intangible asset, net | 38,183 | 88,319 | ||||||
Operating right-of-use assets | 1,659,297 | 2,121,070 | ||||||
Finance lease right-of-use asset | 17,788 | - | ||||||
Deferred tax assets, net | 287,394 | 41,015 | ||||||
Other non-current assets | 3,753,646 | 41,844 | ||||||
Total non-current assets | 5,955,209 | 2,504,197 | ||||||
TOTAL ASSETS | $ | 17,938,031 | $ | 16,534,898 | ||||
Liabilities and Shareholders' Equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 2,175,974 | $ | 1,663,749 | ||||
Advance from customers | 207,293 | 186,874 | ||||||
Accrued expenses and other current liabilities | 1,523,843 | 1,648,970 | ||||||
Taxes payable | 24,974 | 365,851 | ||||||
Operating lease liabilities, current | 506,061 | 485,051 | ||||||
Finance lease liabilities, current | 4,454 | - | ||||||
Long-term bank loan, current portion | - | 39,725 | ||||||
Total current liabilities | 4,442,599 | 4,390,220 | ||||||
Non-current liabilities: | ||||||||
Operating lease liabilities, non-current | 1,184,056 | 1,653,411 | ||||||
Finance lease liabilities, non-current | 13,709 | - | ||||||
Total non-current liabilities | 1,197,765 | 1,653,411 | ||||||
TOTAL LIABILITIES | 5,640,364 | 6,043,631 | ||||||
Commitments and Contingencies | - | - | ||||||
Shareholders' equity | ||||||||
Ordinary Shares (par value of US$0.0005 per share; 100,000,000 shares | 5,791 | 5,000 | ||||||
Subscription receivable | - | (5,000) | ||||||
Additional paid-in capital | 4,855,795 | 1,236,773 | ||||||
Statutory reserve | 813,235 | 813,235 | ||||||
Retained earnings | 8,491,783 | 9,786,946 | ||||||
Accumulated other comprehensive loss | (1,868,937) | (1,345,687) | ||||||
Total shareholders' equity | 12,297,667 | 10,491,267 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 17,938,031 | $ | 16,534,898 | ||||
CCSC TECHNOLOGY INTERNATIONAL HOLDINGS LIMITED | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)/INCOME | ||||||||||||
(Amount in U.S. dollars, except for number of shares) | ||||||||||||
For the years ended March 31, | ||||||||||||
2024 | 2023 | 2022 | ||||||||||
Net revenue | $ | 14,748,551 | $ | 24,059,556 | $ | 27,169,935 | ||||||
Cost of revenue | (10,825,943) | (16,190,985) | (19,694,031) | |||||||||
Gross profit | 3,922,608 | 7,868,571 | 7,475,904 | |||||||||
Operating expenses: | ||||||||||||
Selling expenses | (1,039,882) | (1,097,150) | (866,136) | |||||||||
General and administrative expenses | (4,134,394) | (3,898,894) | (3,318,815) | |||||||||
Research and development expenses | (594,521) | (1,084,119) | (829,024) | |||||||||
Total operating expenses | (5,768,797) | (6,080,163) | (5,013,975) | |||||||||
(Loss)/income from operations | (1,846,189) | 1,788,408 | 2,461,929 | |||||||||
Other (expenses)/income: | ||||||||||||
Other non-operating (expenses)/income, net | (35,509) | 49,873 | 415,934 | |||||||||
Government subsidy | 7,255 | 62,627 | 17,910 | |||||||||
Foreign currency exchange income/(loss) | 425,308 | 562,527 | (199,759) | |||||||||
Financial and interest income/(expenses), net | 67,636 | 22,455 | (7,028) | |||||||||
Total other income | 464,690 | 697,482 | 227,057 | |||||||||
(Loss)/income before income tax expense | (1,381,499) | 2,485,890 | 2,688,986 | |||||||||
Income tax benefit/(expense) | 86,336 | (277,738) | (399,828) | |||||||||
Net (loss)/income | (1,295,163) | 2,208,152 | 2,289,158 | |||||||||
Other comprehensive (loss)/income | ||||||||||||
Foreign currency translation adjustment | (523,250) | (728,399) | 368,037 | |||||||||
Total comprehensive (loss)/income | $ | (1,818,413) | $ | 1,479,753 | $ | 2,657,195 | ||||||
(Loss)/earnings per share | ||||||||||||
Basic and Diluted | $ | (0.13) | $ | 0.22 | $ | 0.23 | ||||||
Weighted average number of ordinary shares | ||||||||||||
Basic and Diluted | 10,288,525 | 10,000,000 | 10,000,000 | |||||||||
CCSC TECHNOLOGY INTERNATIONAL HOLDINGS LIMITED | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
(Amount in U.S. dollars, except for number of shares) | ||||||||||||
For the years ended March 31, | ||||||||||||
2024 | 2023 | 2022 | ||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||||||
Net (loss)/income | $ | (1,295,163) | $ | 2,208,152 | $ | 2,289,158 | ||||||
Adjustments to reconcile net (loss)/income to net cash (used in)/provided | ||||||||||||
Inventory write-down | 188,268 | 369,512 | 117,807 | |||||||||
Depreciation and amortization | 238,757 | 221,106 | 330,269 | |||||||||
Amortization of right-of-use asset | 509,086 | 526,546 | 330,812 | |||||||||
Losses/(gains) from disposal of fixed assets | 2,188 | 5,621 | (61,205) | |||||||||
Deferred tax (benefit)/expense | (249,892) | 51,780 | (17,927) | |||||||||
Foreign currency exchange (gains)/losses | (227,691) | (562,527) | 199,759 | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | (500,747) | 586,559 | 286,662 | |||||||||
Inventories | (101,220) | 2,028,980 | (1,272,692) | |||||||||
Amount due from related parties | - | 478,285 | (51,421) | |||||||||
Prepaid expenses and other current assets | (704,610) | 179,619 | 16,666 | |||||||||
Operating right-of-use assets | - | (2,240,092) | 62,343 | |||||||||
Other non-current assets | (77,220) | 41,314 | 19,310 | |||||||||
Accounts payable | 563,226 | (2,054,385) | 757,114 | |||||||||
Advance from customers | 22,060 | 113,383 | (92,699) | |||||||||
Taxes payable | (340,992) | 112,295 | 220,736 | |||||||||
Accrued expenses and other current liabilities | (64,258) | (91,373) | 117,673 | |||||||||
Operating lease liabilities | (490,319) | 1,704,248 | (409,019) | |||||||||
Financing Lease liabilities | 24 | - | - | |||||||||
Amount due to related parties | - | (215,388) | 78,270 | |||||||||
Net cash (used in)/provided by operating activities | (2,528,503) | 3,463,635 | 2,921,616 | |||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||
Purchase of property and equipment | (156,999) | (153,409) | (376,785) | |||||||||
Prepayment of long-term equipment and mold model | (3,639,312) | - | - | |||||||||
Proceed from disposal of property and equipment | - | 10,891 | 199,146 | |||||||||
Purchase of intangible asset | (29,476) | (64,364) | - | |||||||||
Net cash used in investing activities | (3,825,787) | (206,882) | (177,639) | |||||||||
CASH FLOWS FORM FINANCING ACTIVITIES | ||||||||||||
Proceeds from short-term bank loans | - | 136,784 | 107,076 | |||||||||
Repayments of short-term bank loans | - | (136,784) | (107,076) | |||||||||
Repayments of long-term bank loans | (39,853) | (156,174) | (153,053) | |||||||||
Proceeds from issuance of ordinary shares, net of issuance cost | 4,665,444 | - | - | |||||||||
Payment for deferred initial public offering costs | - | (596,446) | (459,265) | |||||||||
Capital contribution by shareholder | 5,000 | - | 462,469 | |||||||||
Payment made for principal portion of financing lease liabilities | (4,322) | - | (7,553) | |||||||||
Net cash provided by/(used in) financing activities | 4,626,269 | (752,620) | (157,402) | |||||||||
Effect of exchange rate changes on cash and restricted cash | (254,847) | (72,458) | 46,415 | |||||||||
Net change in cash and restricted cash | (1,982,868) | 2,431,675 | 2,632,990 | |||||||||
Cash and restricted cash, beginning of the year | 7,717,615 | 5,285,940 | 2,652,950 | |||||||||
Cash and restricted cash, end of the year | $ | 5,734,747 | $ | 7,717,615 | $ | 5,285,940 | ||||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||||||
Cash paid for income tax | $ | (859,882) | $ | (119,679) | $ | (471,259) | ||||||
Cash received from income tax refund | $ | - | $ | 126,413 | $ | 461,418 | ||||||
Cash paid for interest | $ | (228) | $ | (4,986) | $ | (8,650) | ||||||
Cash paid for operating lease | $ | (575,014) | $ | (601,953) | $ | (635,499) | ||||||
Supplemental disclosure of non-cash investing and financing activities: | ||||||||||||
Right-of-use assets obtained in exchange for operating lease obligations | $ | 137,617 | $ | 2,263,898 | $ | 138,450 | ||||||
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SOURCE CCSC Technology International Holdings Limited