Drives Gross Margin Stability and Expense Reductions Introduces Incentives to Accelerate Electric Industrial Vehicle Purchases Terminates Planned Spin off its Drivetrain Systems Segment
EAST WINDSOR, N.J., Aug. 16, 2024 /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 six months ended June 30, 2024.
Raymond Wang, Chief Executive Officer of Greenland, said, "We achieved a near 100% increase net income in the second quarter of 2024 compared to the year ago period, demonstrating the considerable scalability in our business and the momentum we are building. Our continued focus on expanding growth of our higher profit, higher return on investment opportunities is clearly paying off, which we expect to accelerate as we move forward. We are also strategically expanding our partner ecosystem to make it easier for customers to purchase and operate our electric industrial vehicles. In addition to further expanding our HEVI Authorized Service Provider ("ASP") national network, we announced an exciting new financing program agreement. Taken together, our growth plans remain firmly on track, which we believe will help us unlock far greater value for shareholders as we continue to successfully execute."
"In line with our strategic focus and portfolio assessment, on June 28, 2024, the Company’s board of directors held a board meeting, during which the directors of the Company unanimously approved a decision to terminate its previously announced plan of spinning off its drivetrain systems segment. After due diligence review, the Company’s board of directors has identified that the spin-off would likely not generate significant value to its shareholders due to changing market conditions. We have achieved significant milestones over our history as an integrated company and look forward to now working to accelerate growth as still integrated and unified company."
Jing Jin, Chief Financial Officer of Greenland, commented, "Despite the market fluctuations and challenges, we exited the first half of 2024 in a strong financial position with a healthy balance sheet and positive outlook. We are particularly encouraged with the earnings per share ("EPS") growth we delivered with an 88.89% increase in the second quarter of 2024 compared to the second quarter of 2023, and an equally impressive 76.67% increase in EPS for the six months ended June 30, 2024, as compared to the six months ended June 30, 2023. We do not believe our stock price accurately reflects this strong profit growth, the strength of our core business or the size of the opportunities ahead of us over both the near- and long-term."
2Q 2024 Financial Highlights
Greenland’s revenue was approximately $23.02 million for the three months ended June 30, 2024, representing a decrease of approximately $0.55 million, or 2.3%, as compared to that of approximately $23.57 million for the three months ended June 30, 2023. The decrease in revenue was primarily a result of the decrease of approximately $1.62 million in the Company’s sales volume of transmission products for the three months ended June 30, 2024. On an Renminbi ("RMB") basis, Greenland’s revenue for the three months ended June 30, 2024 increased by approximately 0.9% as compared to that for the three months ended June 30, 2023.
Greenland’s gross profit was approximately $6.77 million for the three months ended June 30, 2024, representing a decrease of approximately $0.15 million, or 2.2%, as compared to that of approximately $6.93 million for the three months ended June 30, 2023. The decrease in gross profit in the three months ended June 30, 2024 compared to the three months ended June 30, 2023 was primarily due to the decrease in the Company’s sales volume. For the three months ended June 30, 2024 and 2023, Greenland’s gross margin was approximately 29.4%.
Greenland’s cost of goods sold consists primarily of material costs, freight charges, purchasing and receiving costs, inspection costs, internal transfer costs, wages, employee compensation, amortization, depreciation and related costs, which are directly attributable to the Company’s manufacturing activities. The write down of inventory using the net realizable value impairment test is also recorded in cost of goods sold. The total cost of goods sold was approximately $16.24 million for the three months ended June 30, 2024, representing a decrease by approximately $0.40 million, or 2.4%, as compared to that of approximately $16.64 million for the three months ended June 30, 2023. Cost of goods sold decreased due to the decrease in the Company’s sales volume.
Total operating expenses were $2.79 million, a decrease of 20.7% from $3.52 million in the second quarter of 2023. The decrease was primarily due to lower shipping fees, staffing costs and general and administrative expenses.
Income from operations for the three months ended June 30, 2024 was approximately $3.99 million, representing an increase of approximately $0.58 million, as compared to that of approximately $3.41 million for the three months ended June 30, 2023.
Net income was approximately $5.87 million for the three months ended June 30, 2024, an increase of 99.66% from approximately $2.94 million for the three months ended June 30, 2023. Net income per basic and diluted share was $0.34 for the three months ended June 30, 2024, representing an increase of 88.89%, as compared to $0.18 for the three months ended June 30, 2023.
Cash equivalents refers to all highly liquid investments purchased with original maturity of three months or less. As of June 30, 2024, Greenland had approximately $17.12 million of cash and cash equivalents, representing a decrease of approximately $5.86 million, or 25.51%, as compared to approximately $22.98 million as of December 31, 2023. The decrease of cash and cash equivalents was mainly due to a decrease in short-term bank loans and notes payable, as compared to that as of December 31, 2023.
Restricted cash represents the amount held by a bank as security for bank acceptance notes and therefore is not available for use until the bank acceptance notes are fulfilled or expired, which typically takes less than twelve months. As of June 30, 2024, Greenland had approximately $3.91 million of restricted cash, representing a decrease of approximately $1.30 million, or 25.00%, as compared to that of approximately $5.21 million as of December 31, 2023. The decrease of restricted cash was due to a decrease of notes payable.
As of June 30, 2024, Greenland had $30.96 million of notes receivables, which it expects to collect within twelve months. The increase was $3.82 million, or 14.10%, as compared to $27.14 million as of December 31, 2023.
Six Months Ended June 30, 2024 Financial Highlights
Greenland’s revenue was approximately $45.74 million for the six months ended June 30, 2024, representing an increase of approximately $0.02 million, or 0.0%, as compared to that of approximately $45.72 million for the six months ended June 30, 2023. The increase in revenue was primarily a result of the increase of approximately $1.07 million in the Company’s sales volume, driven by increasing market demand of approximately $1.1 million for electric industrial equipment for the six months ended June 30, 2024. On an RMB basis, Greenland’s revenue for the six months ended June 30, 2024 increased by approximately 4.2% as compared to that for the six months ended June 30, 2023.
Greenland’s gross profit was approximately $12.42 million for the six months ended June 30, 2024, representing a decrease by approximately $0.03 million, or 0.2%, as compared to that of approximately $12.45 million for the six months ended June 30, 2023. For the six months ended June 30, 2024 and 2023, Greenland’s gross margins were approximately 27.16% and 27.23%, respectively. The decrease in gross margins in the six months ended June 30, 2024 compared to the six months ended June 30, 2023 was primarily due to an increase in raw material costs.
Greenland’s cost of goods sold consists primarily of material costs, freight charges, purchasing and receiving costs, inspection costs, internal transfer costs, wages, employee compensation, amortization, depreciation and related costs, which are directly attributable to the Company’s manufacturing activities. The write down of inventory using the net realizable value impairment test is also recorded in cost of goods sold. The total cost of goods sold was approximately $33.32 million for the six months ended June 30, 2024, representing an increase by approximately $0.05 million, or 0.2%, as compared to that of approximately $33.27 million for the six months ended June 30, 2023. Cost of goods sold increased due to the increase in the Company’s sales volume.
Total operating expenses were $6.51 million, a decrease of 2.40% from $6.67 million in the first six months of 2023. The decrease was primarily due to lower shipping fees, staffing costs and general and administrative expenses.
Income from operations for the six months ended June 30, 2024 was approximately $5.91 million, representing an increase of approximately $0.13 million, as compared to that of approximately $5.78 million for the six months ended June 30, 2023.
Net income was approximately $9.44 million for the six months ended June 30, 2024, representing an increase of approximately $4.04 million, as compared to that of approximately $5.40 million for the six months ended June 30, 2023. Net income per basic and diluted share was $0.53 for the six months ended June 30, 2024, representing an increase of 76.67%, as compared to $0.30 for the six months ended June 30, 2023.
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 the success of Greenland’s business execution, ability to unlock shareholder value or its ability to grow its business as an integrated company. 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
(AUDITED, IN U.S. DOLLARS)
June 30,
December 31,
2024
2023
ASSETS
Current assets
Cash and cash equivalents
$
17,119,889
$
22,981,324
Restricted cash
3,906,138
5,208,063
Short Term Investment
5,504,183
2,818,068
Notes receivable
30,962,280
27,135,249
Accounts receivable, net
21,882,869
16,483,533
Inventories, net
20,251,335
24,596,795
Due from related parties-current, net
228,311
225,927
Advance to suppliers
637,836
288,578
Prepayments and other current assets
1,944,925
53,204
Total Current Assets
$
102,437,766
$
99,790,741
Non-current asset
Property, plant, equipment and construction in progress, net
13,714,991
13,698,997
Land use rights, net
3,326,779
3,448,505
Other intangible assets
137,806
189,620
Deferred tax assets
452,248
256,556
Right-of-use assets
1,871,826
2,125,542
Fixed deposit
4,342,574
9,916,308
Other non-current assets
475,140
1,050,698
Total non-current assets
$
24,321,364
$
30,686,226
TOTAL ASSETS
$
126,759,130
$
130,476,967
Current Liabilities
Short-term bank loans
$
–
$
3,042,296
Notes payable-bank acceptance notes
31,407,248
36,712,562
Accounts payable
24,793,173
25,272,528
Taxes payables
740,850
758,307
Customer deposits
491,582
137,985
Due to related parties
3,831,576
3,831,636
Other current liabilities
2,221,355
2,281,507
Lease liabilities
495,693
487,695
Total current liabilities
$
63,981,477
$
72,524,516
Non-current liabilities
Lease liabilities
1,432,987
1,684,614
Deferred revenue
1,381,686
1,529,831
Warrant liability
1,180,281
4,084,605
Total non-current liabilities
$
3,994,954
$
7,299,050
TOTAL LIABILITIES
$
67,976,431
$
79,823,566
COMMITMENTS AND CONTINGENCIES
–
–
Shareholders’ equity
Ordinary shares, no par value, unlimited shares authorized; 13,594,530 and 13,594,530 shares issued and outstanding
as of June 30, 2024 and December 31, 2023.
–
–
Additional paid-in capital
30,286,560
30,286,560
Statutory reserves
3,842,331
3,842,331
Retained earnings
25,688,246
18,535,133
Accumulated other comprehensive loss
(3,534,987)
(2,583,794)
Total shareholders’ equity
$
56,282,150
$
50,080,230
Non-controlling interest
2,500,549
573,171
TOTAL SHAREHOLDERS’ EQUITY
$
58,782,699
$
50,653,401
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY
$
126,759,130
$
130,476,967
GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(AUDITED, IN U.S. DOLLARS)
For the three months ended
For the six months ended
June 30,
June 30,
2024
2023
2024
2023
Revenues
$
23,017,260
$
23,569,449
$
45,740,851
$
45,718,809
Cost of goods sold
16,243,205
16,641,612
33,319,727
33,267,542
Gross profit
6,774,055
6,927,837
12,421,124
12,451,267
Selling expenses
465,146
574,040
1,014,642
961,525
General and administrative expenses
1,199,492
1,519,564
3,382,921
3,161,468
Research and development expenses
1,123,063
1,425,394
2,110,787
2,545,285
Total operating expenses
$
2,787,701
$
3,518,998
$
6,508,350
$
6,668,278
INCOME FROM OPERATIONS
$
3,986,354
$
3,408,839
$
5,912,774
$
5,782,989
Interest income
215,732
44,683
384,945
75,076
Interest expense
(36,008)
(79,504)
(79,848)
(145,997)
Change in fair value of the warrant liability
1,869,018
–
2,904,324
–
Loss on disposal of property, plant and equipment
556
(239)
556
(239)
Other income (loss)
518,333
(128,768)
814,481
288,614
INCOME BEFORE INCOME TAX
$
6,553,985
$
3,245,011
$
9,937,232
$
6,000,443
INCOME TAX EXPENSE
680,801
304,815
494,800
601,673
NET INCOME
$
5,873,184
$
2,940,196
$
9,442,432
$
5,398,770
LESS: NET INCOME ATTRIBUTABLE TONONCONTROLLING INTEREST
1,222,274
541,058
2,289,319
1,552,657
NET INCOME ATTRIBUTABLE TO GREENLANDTECHNOLOGIES HOLDING CORPORATION ANDSUBSIDIARIES
$
4,650,910
$
2,399,138
$
7,153,113
$
3,846,113
OTHER COMPREHENSIVE LOSS:
(404,372)
(4,591,131)
(1,313,134)
(4,273,799)
Unrealized foreign currency translation loss attributable toGreenland Technologies Holding Corporation and subsidiaries
(297,385)
(3,185,362)
(951,193)
(2,973,010)
Unrealized foreign currency translation loss attributable to non-controlling Interest
(106,987)
(1,405,769)
(361,941)
(1,300,789)
Total comprehensive income (loss) attributable to GreenlandTechnologies Holding Corporation and subsidiaries
4,353,525
(786,224)
6,201,920
873,103
Total comprehensive income (loss) attributable to non-controlling interest
1,115,287
(864,711)
1,927,378
251,868
WEIGHTED AVERAGE ORDINARY SHARES OUTSTANDING:
13,594,530
12,978,504
13,594,530
12,978,504
Basic and diluted
0.34
0.18
0.53
0.30
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