Greenland Technologies Reports Second Quarter and First Half 2023 Unaudited Financial Results
- 2Q23 Revenue Increased 14% Year-over-Year
- 2Q23 Gross Margin Improved 590 Basis Points Year-over-Year
- 2Q23 Net Income Increased 24% Year-over-Year
- Cash and Cash Equivalents Grew 373% Year-over-Year to $15.2 Million
EAST WINDSOR, N.J., Aug. 21, 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 second quarter and first half ended June 30, 2023.
Second Quarter 2023 Financial and Operating Highlights
- Revenue was $23.6 million, an increase of 14% from $20.6 million a year ago.
- Gross margin was 29.4%, up 590 basis points from 23.5% a year ago on improved product mix.
- Net income was $2.9 million, an increase of 24% from $2.4 million in the second quarter of 2022.
- Transmissions products sold were 38,256 units, an increase of 32% from 28,939 units a year ago.
First Half 2023 Financial and Operating Highlights
- Revenue was $45.7 million, compared with $49.9 million a year ago.
- Gross margin was 27.2%, up 470 basis points from 22.5% a year ago on improved product mix.
- Net income was $5.4 million, a slight increase of 2% from $5.3 million in the first half of 2022.
- Transmissions products sold were 75,097 units, an increase of 6% from 70,841 units a year ago.
"We are pleased to deliver strong second quarter results as our core markets in China have largely returned to a new-normal following years of COVID disruptions", said Mr. Raymond Wang, Chief Executive Officer of Greenland Technologies. "Demand for our transmission products increased significantly from the second quarter of last year and drove revenue growth of 14%. On a constant currency basis, our revenue growth was even stronger at 19% year-over-year, after excluding the impact of FX. Further, our strategic focus on higher value products continued to pay off and drove our gross margin to improve nearly 600 basis points to 29.4%, which is a record high for us over the last few years. Looking into the second half of the year, we expect demand to remain strong and we continue to anticipate revenue growth for our core transmission business in 2023."
Mr. Jing Jin, Chief Financial Officer of Greenland, commented: "Improved demand and product mix in the second quarter drove strong financial results across almost every metric. Notably, our net income to grew 24% year-over-year and we ended the quarter with $15.2 million of cash, up nearly 400% from a year ago. These impressive results demonstrate our leading position in the industry and the effectiveness of our business strategies. Going forward, we will continue to leverage our core strengths and execute growth strategies to bolster our core transmission business while also expanding our HEVI division."
Second Quarter 2023 Financial Results
Revenue was $23.6 million, an increase of 14% from $20.6 million in the second quarter of 2022, due to the increase in the Company's sales volume of its transmission products. On an RMB basis, excluding the impact of FX, revenue increased approximately 19% from the second quarter of 2022. The number of transmission products sold was 38,256 units, an increase of 32% from 28,939 in the second quarter of 2022.
Costs of goods sold were $16.6 million, an increase of 6% from $15.8 million in the second quarter of 2022, primarily due to the increase in sales volume.
Gross profit was $6.9 million, an increase of 43% from $4.8 million in the second quarter of 2022. Gross margin was 29.4%, up 590 basis points from 23.5% in the second quarter of 2022, resulting from a strategic shift in Greenland's product mix towards higher value and sophistication products such as hydraulic transmissions.
Total operating expenses were $3.5 million, an increase of 34% from $2.6 million in the second quarter of 2022. The increase was primarily due to the Company's focus on R&D investment as well as advertising, marketing, general and administrative activities related to its expansion, along with higher shipping fees.
Income from operations was $3.4 million, an increase of 54% from $2.2 million in the second quarter of 2022.
Net income was $2.9 million, an increase of 24% from $2.4 million in the second quarter of 2022.
Basic and diluted net income per ordinary share were both $0.18, an increase of 38% from $0.13 per ordinary share in the second quarter of 2022.
First Half 2023 Financial Results
Revenue was $45.7 million, a decrease of 8% from $49.9 million in the first half of 2022, primarily due to logistical and supply chain challenges in the first quarter from 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. Revenue was also impacted by a stronger dollar relative to the Chinese RMB. On an RMB basis, excluding the impact of FX, revenue decreased approximately 2% from the first half of 2022. The number of transmission products sold was 75,097 units, an increase of 6% from 70,841 units in the first half of 2022.
Costs of goods sold were $33.3 million, a decrease of 14% from $38.7 million in the first half of 2022, primarily due to the decrease in sales.
Gross profit was $12.5 million, an increase of 11% from $11.2 million in the first half of 2022. Gross margin was 27.2%, up 470 basis points from 22.5% in the first half of 2022, resulting from a strategic shift in Greenland's product mix towards higher value and sophistication products such as hydraulic transmissions.
Total operating expenses were $6.7 million, an increase of 18% from $5.6 million in the first half of 2022. The Company has focused on R&D investment and general and administrative activities related to the Company's expansion, which offset the decrease in after-sales service fees.
Income from operations was $5.8 million, an increase of 4% from $5.6 million in the first half of 2022.
Net income was $5.4 million, a slight increase of 2% from $5.3 million in the first half of 2022.
Basic and diluted net income per ordinary share were both $0.3, up 3% from $0.29 per ordinary share in the first half of 2022.
Conference Call
Greenland Technologies management will host an earnings conference call at 4:30 PM on Monday, August 21, 2023, U.S. Eastern Time (4:30 AM on August 22, 2023, Beijing/Hong Kong Time).
Participant Registration
Investors and analysts interested in participating in Greenland's second quarter and first half 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/BI3891950c447148bf9c94f6a78f21defb
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 BALANCE SHEETS | ||||||||
AS OF JUNE 30, 2023 AND DECEMBER 31, 2022 | ||||||||
(IN U.S. DOLLARS) | ||||||||
June 30, | December 31, | |||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 15,232,289 | $ | 16,295,695 | ||||
Restricted cash | 3,815,661 | 3,433,361 | ||||||
Short Term Investment | 5,653,055 | 7,800,723 | ||||||
Notes receivable | 31,366,381 | 28,748,879 | ||||||
Accounts receivable, net of allowance for doubtful accounts of $1,104,705 and | 20,908,968 | 14,337,760 | ||||||
Inventories | 20,216,673 | 23,096,382 | ||||||
Due from related parties-current | 34,675,437 | 36,669,907 | ||||||
Advance to suppliers | 1,068,716 | 412,766 | ||||||
Prepayments and other current assets | 375,495 | 1,568,687 | ||||||
Total Current Assets | $ | 133,312,675 | $ | 132,364,160 | ||||
Non-current asset | ||||||||
Property, plant, equipment and construction in progress, net | 14,132,165 | 15,585,214 | ||||||
Land use rights, net | 3,418,932 | 3,639,067 | ||||||
Other intangible assets | 120,947 | 147,465 | ||||||
Long term investment | 300,000 | 250,000 | ||||||
Deferred tax assets | 277,222 | 219,207 | ||||||
Operating lease right-of-use assets | 2,379,271 | 2,627,110 | ||||||
Other non-current assets | 255,977 | 283,118 | ||||||
Total non-current assets | $ | 20,884,514 | $ | 22,751,181 | ||||
TOTAL ASSETS | $ | 154,197,189 | $ | 155,115,341 | ||||
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
AS OF JUNE 30, 2023 AND DECEMBER 31, 2022 (Continued) | ||||||||
(IN U.S. DOLLARS) | ||||||||
June 30, | December 31, | |||||||
2023 | 2022 | |||||||
Current Liabilities | ||||||||
Short-term bank loans | $ | 7,309,034 | $ | 8,986,255 | ||||
Notes payable-bank acceptance notes | 28,120,761 | 28,272,472 | ||||||
Accounts payable | 24,983,677 | 24,817,165 | ||||||
Taxes payables | - | 192,478 | ||||||
Customer deposits | 217,674 | 227,432 | ||||||
Due to related parties | 1,690,031 | 1,693,315 | ||||||
Other current liabilities | 2,433,957 | 1,547,390 | ||||||
Current portion of operating lease liabilities | 533,157 | 472,182 | ||||||
Total current liabilities | $ | 65,288,291 | $ | 66,208,689 | ||||
Long-term liabilities | ||||||||
Long term operating lease liabilities | 1,928,680 | 2,176,130 | ||||||
Other long-term liabilities | 1,641,079 | 1,812,759 | ||||||
Total long-term liabilities | $ | 3,569,759 | $ | 3,988,889 | ||||
TOTAL LIABILITIES | $ | 68,858,050 | $ | 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 | 41,074,374 | 37,228,261 | ||||||
Accumulated other comprehensive income (loss) | (5,804,429) | (2,831,419) | ||||||
Total shareholders' equity | $ | 72,068,203 | $ | 71,195,100 | ||||
Non-controlling interest | 13,270,936 | 13,722,663 | ||||||
TOTAL EQUITY | $ | 85,339,139 | $ | 84,917,763 | ||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 154,197,189 | $ | 155,115,341 | ||||
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES | ||||||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | ||||||||||||||||
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2023 AND 2022 | ||||||||||||||||
(UNAUDITED, IN U.S. DOLLARS) | ||||||||||||||||
Three months ended June 30, | Six months ended June 30, | |||||||||||||||
2023 | 2022 | 2023 | 2022 | |||||||||||||
REVENUES | $ | 23,569,449 | $ | 20,602,505 | $ | 45,718,809 | $ | 49,909,462 | ||||||||
COST OF GOODS SOLD | 16,641,612 | 15,763,344 | 33,267,542 | 38,702,327 | ||||||||||||
GROSS PROFIT | 6,927,837 | 4,839,161 | 12,451,267 | 11,207,135 | ||||||||||||
Selling expenses | 574,040 | 518,088 | 961,525 | 1,157,735 | ||||||||||||
General and administrative expenses | 1,519,564 | 1,244,634 | 3,161,468 | 2,524,380 | ||||||||||||
Research and development expenses | 1,425,394 | 862,535 | 2,545,285 | 1,945,129 | ||||||||||||
Total operating expenses | $ | 3,518,998 | $ | 2,625,257 | $ | 6,668,278 | $ | 5,627,244 | ||||||||
INCOME FROM OPERATIONS | $ | 3,408,839 | $ | 2,213,904 | $ | 5,782,989 | $ | 5,579,891 | ||||||||
Interest income | 44,683 | 9,887 | 75,076 | 22,449 | ||||||||||||
Interest expense | (79,504) | (91,651) | (145,997) | (196,660) | ||||||||||||
Loss on disposal of property and equipment | (239) | 10 | (239) | (394) | ||||||||||||
Other income | (128,768) | 501,710 | 288,614 | 762,742 | ||||||||||||
INCOME BEFORE INCOME TAX | $ | 3,245,011 | $ | 2,633,860 | $ | 6,000,443 | $ | 6,168,028 | ||||||||
INCOME TAX | 304,815 | 254,434 | 601,673 | 873,804 | ||||||||||||
NET INCOME | $ | 2,940,196 | $ | 2,379,426 | $ | 5,398,770 | $ | 5,294,224 | ||||||||
LESS: NET INCOME ATTRIBUTABLE TO NONCONTROLLING | 541,058 | 892,162 | 1,552,657 | 2,019,908 | ||||||||||||
NET INCOME ATTRIBUTABLE TO GREENLAND | $ | 2,399,138 | $ | 1,487,264 | $ | 3,846,113 | $ | 3,274,316 | ||||||||
OTHER COMPREHENSIVE INCOME (LOSS): | (4,591,131) | (4,075,452) | (4,273,799) | (3,701,542) | ||||||||||||
Unrealized foreign currency translation income (loss) | (3,185,362) | (2,720,040) | (2,973,010) | (2,471,958) | ||||||||||||
Unrealized foreign currency translation income (loss) | (1,405,769) | (1,355,412) | (1,300,789) | (1,229,584) | ||||||||||||
Comprehensive income (loss) | (786,224) | (1,232,776) | 873,103 | 802,358 | ||||||||||||
Noncontrolling interest | (864,711) | (463,250) | 251,868 | 790,324 | ||||||||||||
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING: | ||||||||||||||||
Basic and diluted | 12,978,504 | 11,329,530 | 12,978,504 | 11,329,530 | ||||||||||||
NET INCOME PER ORDINARY SHARE ATTRIBUTABLE TO | ||||||||||||||||
Basic and diluted | 0.18 | 0.13 | 0.30 | 0.29 | ||||||||||||
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SOURCE Greenland Technologies Holding Corporation