Cenntro Electric Group Announces Second Quarter 2023 Unaudited Financial Results
- Q2 2023 net revenue increased 32% to $4.2 million
- Number of vehicles sold increased by 82% to 235 vehicles
- Gross profit margin increased to 27.1%
- Average selling price increased 11% to approximately $18.6 thousand
- None.
Q2 2023 Net Revenue Increased
Number of Vehicles Sold Increased Sequentially by
Gross Profit Margin Increased 2,180 bps to
Average Selling Price Increased
Second Quarter 2023 Financial and Operating Highlights
-
Net revenue of
increased$4.2 million 32% year over year. -
Sales volume increased by
26% year over year and82% sequentially quarter over quarter to 235 vehicles. -
Average selling price (“ASP”) increased
11% year over year to approximately .$18,600 -
Adjusted EBITDA for the quarter is a loss of
compared to a loss of$12.5 million for Q2 2022.$12.2 million - Entered collaboration agreement with EAVX, a JB Poindexter & Co Inc. Business Unit, to develop innovative and industry-leading All-Electric last mile and vocational work truck solutions.
- Achieved certification by the California Air Resources Board for the LS400 and the Metro®, allowing the vehicle to be considered for monetary incentives including the California Hybrid and Zero-Emission Truck and Bus Voucher Incentive Project (“HVIP”).
-
Cenntro was recognized as a Clean Vehicle Manufacturer by the
U.S. Internal Revenue Service which will allow Cenntro vehicles to be eligible for vehicle tax credits of up to under Internal Revenue Code (IRC) 45W.$40,000 -
Announced a new assembly plant in
Ontario, California , scheduled to be operational in the third quarter of 2023, to position the company for future sales on West Coast, the leading market for EV adoption. -
Opened sales in the Central American and
Caribbean markets with the Logistar® 100 and Logistar® 260.
“Our sales momentum in the second quarter continued to ramp up as distribution expanded from the first quarter of 2023. We also qualified as a Commercial Clean Vehicle Manufacturer with the
“Building on our first quarter results with the expansion of our vehicle lineup, the expansion of our assembly capabilities in
“We continue to expand our product line to meet the diverse demand for our ECVs. During the quarter we announced a strategic partnership with EAVX, a unit of JB Poindexter & Co Inc., which will focus on the integration of their commercial truck bodies with Cenntro’s All-Electric LS300 and LS400 cab chassis.
“Our recent announcement of a new facility in
“Looking ahead, we continue to position Cenntro to capture market share with a diverse and innovative lineup of all-electric vehicles, and an expanded geographic footprint for production, distribution, and service infrastructure. Combined with our hybrid EV Center and distribution partner sales model, we are beginning to gain traction with customers,” concluded Wang.
Edmond Cheng, Chief Financial Officer added, “Sales volume in the second quarter of 2023 of our electric commercial vehicles increased
“The average selling price was approximately
“As of June 30, 2023, we had approximately
Second Quarter 2023 Financial Results
Net Revenues
Net revenue was
Gross Profit
Gross profit was
Operating Expenses
Total operating expenses were approximately
Net Loss Attributable to the Company’s Shareholders
Net loss was approximately
Balance Sheet
Cash and cash equivalents were approximately
Adjusted EBITDA1
Adjusted EBITDA was approximately
We define Adjusted EBITDA as net income (or net loss) before net interest expense, income tax expense, depreciation and amortization as further adjusted to exclude the impact of stock-based compensation expense and other non-recurring expenses including expenses related to TME Acquisition, expenses related to one-off payment inherited from the original Naked Brand Group, impairment of goodwill, convertible bond issuance fee, loss on redemption of convertible promissory notes, loss on exercise of warrants, and change in fair value of convertible promissory notes and derivative liability. We present Adjusted EBITDA because we consider it to be an important supplemental measure of our performance and believe it is frequently used by securities analysts, investors, and other interested parties in the evaluation of companies in our industry. Management believes that investors’ understanding of our performance is enhanced by including this non-GAAP financial measure as a reasonable basis for comparing our ongoing results of operations.
US-GAAP NET INCOME (LOSS) TO ADJUSTED EBITDA RECONCILIATION |
||||||||||||||||
|
|
Three Months ended June 30, |
|
|
Six Months ended June 30, |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
(Expressed in |
|
(Unaudited) |
|
|
(Unaudited) |
|
||||||||||
Net loss |
|
$ |
(14,077,166 |
) |
|
$ |
(13,705,920 |
) |
|
$ |
(25,191,143 |
) |
|
$ |
(23,054,289 |
) |
Interest expense, net |
|
|
(1,262 |
) |
|
|
(222,672 |
) |
|
|
53,153 |
|
|
|
(286,873 |
) |
Income tax expense |
|
|
25,468 |
|
|
|
(48,861 |
) |
|
|
25,468 |
|
|
|
(48,861 |
) |
Depreciation and amortization |
|
|
455,779 |
|
|
|
344,507 |
|
|
|
786,411 |
|
|
|
484,937 |
|
Share-based compensation expense |
|
|
1,256,484 |
|
|
|
1,110,440 |
|
|
|
2,410,291 |
|
|
|
1,309,856 |
|
Loss on redemption of convertible promissory notes |
|
|
(1,900 |
) |
|
|
|
|
|
|
101 |
|
|
|
- |
|
Loss on exercise of warrants |
|
|
14,745 |
|
|
|
|
|
|
|
227,615 |
|
|
|
|
|
Change in fair value of convertible promissory notes and derivative liability |
|
|
(199,697 |
) |
|
|
|
|
|
|
(73,425 |
) |
|
|
- |
|
Expenses related to TME Acquisition |
|
|
|
|
|
|
348,987 |
|
|
|
|
|
|
|
348,987 |
|
Expenses related to one-off payment inherited from the original Naked Brand Group |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8,299,178 |
|
Adjusted EBITDA |
|
|
(12,527,549 |
) |
|
|
(12,173,520 |
) |
|
$ |
(21,761,529 |
) |
|
$ |
(12,947,065 |
) |
1 Represents a non-GAAP financial measure.
About Cenntro Electric Group Ltd.
Cenntro Electric Group Ltd. (or "Cenntro") (NASDAQ: CENN) is a leading designer and manufacturer of electric commercial vehicles. Cenntro's purpose-built ECVs are designed to serve a variety of organizations in support of city services, last-mile delivery, and other commercial applications. Cenntro plans to lead the transformation in the automotive industry through scalable, decentralized production, and smart driving solutions empowered by the Cenntro iChassis. For more information, please visit Cenntro's website at: www.cenntroauto.com.
Forward-Looking Statements
This communication contains "forward-looking statements" within the meaning of the safe harbor provisions of the
CENNTRO ELECTRIC GROUP LIMITED CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) |
||||||||||
|
|
|
|
June 30, 2023 |
|
|
December 31, 2022 |
|
||
|
|
|
|
(Unaudited) |
|
|
|
|
||
ASSETS |
|
|
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
|
|
||
Cash and cash equivalents |
|
|
|
$ |
60,390,172 |
|
|
$ |
153,966,777 |
|
Restricted cash |
|
|
|
|
92,461 |
|
|
|
130,024 |
|
Accounts receivable, net |
|
|
|
|
2,646,333 |
|
|
|
565,398 |
|
Inventories |
|
|
|
|
41,798,511 |
|
|
|
31,843,371 |
|
Prepayment and other current assets |
|
|
|
|
18,339,914 |
|
|
|
16,138,330 |
|
Deferred cost- current |
|
|
|
|
10,273 |
|
|
|
- |
|
Amounts due from a related party |
|
|
|
|
212,320 |
|
|
|
366,936 |
|
Total current assets |
|
|
|
|
123,489,984 |
|
|
|
203,010,836 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
|
|
|
|
|
Long-term investment, net |
|
|
|
|
4,959,769 |
|
|
|
5,325,741 |
|
Investment in equity securities |
|
|
|
|
30,472,663 |
|
|
|
29,759,195 |
|
Property, plant and equipment, net |
|
|
|
|
18,508,847 |
|
|
|
14,962,591 |
|
Intangible assets, net |
|
|
|
|
6,439,333 |
|
|
|
4,563,792 |
|
Right-of-use assets |
|
|
|
|
19,734,961 |
|
|
|
8,187,149 |
|
Deferred cost - non-current |
|
|
|
|
207,974 |
|
|
|
- |
|
Other non-current assets, net |
|
|
|
|
2,232,206 |
|
|
|
2,039,012 |
|
Total non-current assets |
|
|
|
|
82,555,753 |
|
|
|
64,837,480 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
|
|
|
$ |
206,045,737 |
|
|
$ |
267,848,316 |
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES |
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
|
|
Accounts payable |
|
|
|
$ |
3,364,228 |
|
|
$ |
3,383,021 |
|
Accrued expenses and other current liabilities |
|
|
|
|
3,543,840 |
|
|
|
5,048,641 |
|
Contractual liabilities |
|
|
|
|
3,314,661 |
|
|
|
2,388,480 |
|
Operating lease liabilities, current |
|
|
|
|
4,303,890 |
|
|
|
1,313,334 |
|
Convertible promissory notes |
|
|
|
|
11,904,153 |
|
|
|
57,372,827 |
|
Deferred government grant, current |
|
|
|
|
53,046 |
|
|
|
26,533 |
|
Amounts due to related parties |
|
|
|
|
41,302 |
|
|
|
716,372 |
|
Total current liabilities |
|
|
|
|
26,525,120 |
|
|
|
70,249,208 |
|
|
|
|
|
|
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
|
|
|
|
|
Deferred government grant, non-current |
|
|
|
|
968,079 |
|
|
|
497,484 |
|
Derivative liability - investor warrant |
|
|
|
|
12,205,830 |
|
|
|
14,334,104 |
|
Derivative liability - placement agent warrant |
|
|
|
|
3,456,137 |
|
|
|
3,456,404 |
|
Operating lease liabilities, non-current |
|
|
|
|
16,001,387 |
|
|
|
7,421,582 |
|
Total non-current liabilities |
|
|
|
|
32,631,433 |
|
|
|
25,709,574 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities |
|
|
|
$ |
59,156,553 |
|
|
$ |
95,958,782 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
||
|
|
|
|
|
|
|
|
|
|
|
EQUITY |
|
|
|
|
|
|
|
|
|
|
Ordinary shares (No par value; 304,449,091 and 300,841,995 shares issued and outstanding as of June 30, 2023 and December 31, 2022, respectively) |
|
|
|
|
- |
|
|
|
- |
|
Additional paid in capital |
|
|
|
|
399,517,411 |
|
|
|
397,497,817 |
|
Accumulated deficit |
|
|
|
|
(244,856,609 |
) |
|
|
(219,824,176 |
) |
Accumulated other comprehensive loss |
|
|
|
|
(7,770,097 |
) |
|
|
(5,306,972 |
) |
Total equity attributable to shareholders |
|
|
|
|
146,890,705 |
|
|
|
172,366,669 |
|
Non-controlling interests |
|
|
|
|
(1,521 |
) |
|
|
(477,135 |
) |
Total Equity |
|
|
|
$ |
146,889,184 |
|
|
$ |
171,889,534 |
|
Total Liabilities and Equity |
|
|
|
$ |
206,045,737 |
|
|
$ |
267,848,316 |
|
CENNTRO ELECTRIC GROUP LIMITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Unaudited) |
||||||||||||||||
|
|
For the Three Months Ended June 30, |
|
|
For the Six Months Ended June 30, |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net revenues |
|
$ |
4,237,520 |
|
|
$ |
3,204,689 |
|
|
$ |
7,708,064 |
|
|
$ |
5,035,322 |
|
Cost of goods sold |
|
|
(3,090,275 |
) |
|
|
(3,036,237 |
) |
|
|
(6,366,075 |
) |
|
|
(4,503,840 |
) |
Gross profit |
|
|
1,147,245 |
|
|
|
168,452 |
|
|
|
1,341,989 |
|
|
|
531,482 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling and marketing expenses |
|
|
(2,742,749 |
) |
|
|
(1,531,460 |
) |
|
|
(4,611,734 |
) |
|
|
(2,626,568 |
) |
General and administrative expenses |
|
|
(9,285,213 |
) |
|
|
(12,014,453 |
) |
|
|
(16,643,477 |
) |
|
|
(20,226,284 |
) |
Research and development expenses |
|
|
(2,143,070 |
) |
|
|
(1,389,153 |
) |
|
|
(3,712,989 |
) |
|
|
(1,814,512 |
) |
Total operating expenses |
|
|
(14,171,032 |
) |
|
|
(14,935,066 |
) |
|
|
(24,968,200 |
) |
|
|
(24,667,364 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(13,023,787 |
) |
|
|
(14,766,614 |
) |
|
|
(23,626,211 |
) |
|
|
(24,135,882 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER EXPENSE: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income (expense), net |
|
|
1,262 |
|
|
|
222,672 |
|
|
|
(53,153 |
) |
|
|
286,873 |
|
(Loss) income from long-term investment |
|
|
(148,645 |
) |
|
|
4,941 |
|
|
|
(129,603 |
) |
|
|
10,878 |
|
Impairment of long-term investment |
|
|
(8,538 |
) |
|
|
- |
|
|
|
(1,154,666 |
) |
|
|
- |
|
Gain (loss) on redemption of convertible promissory notes |
|
|
1,900 |
|
|
|
- |
|
|
|
(101 |
) |
|
|
- |
|
Loss on exercise of warrants |
|
|
(14,745 |
) |
|
|
- |
|
|
|
(227,615 |
) |
|
|
- |
|
Change in fair value of convertible promissory notes and derivative liability |
|
|
199,698 |
|
|
|
- |
|
|
|
73,425 |
|
|
|
- |
|
Change in fair value of equity securities |
|
|
60,452 |
|
|
|
- |
|
|
|
713,468 |
|
|
|
- |
|
Other (expense) income, net |
|
|
(1,119,295 |
) |
|
|
784,220 |
|
|
|
(761,219 |
) |
|
|
734,981 |
|
Loss before income taxes |
|
|
(14,051,698 |
) |
|
|
(13,754,781 |
) |
|
|
(25,165,675 |
) |
|
|
(23,103,150 |
) |
Income tax (expense) benefit |
|
|
(25,468 |
) |
|
|
48,861 |
|
|
|
(25,468 |
) |
|
|
48,861 |
|
Net loss |
|
|
(14,077,166 |
) |
|
|
(13,705,920 |
) |
|
|
(25,191,143 |
) |
|
|
(23,054,289 |
) |
Less: net loss attributable to non-controlling interests |
|
|
(2,682 |
) |
|
|
(633,922 |
) |
|
|
(158,710 |
) |
|
|
(670,641 |
) |
Net loss attributable to the Company’s shareholders |
|
$ |
(14,074,484 |
) |
|
$ |
(13,071,998 |
) |
|
$ |
(25,032,433 |
) |
|
$ |
(22,383,648 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE LOSS |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
(2,824,971 |
) |
|
|
(4,078,240 |
) |
|
|
(2,487,693 |
) |
|
|
(3,825,086 |
) |
Total comprehensive loss |
|
|
(16,902,137 |
) |
|
|
(17,784,160 |
) |
|
|
(27,678,836 |
) |
|
|
(26,879,375 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: total comprehensive loss attributable to non-controlling interests |
|
|
(2,683 |
) |
|
|
(483,216 |
) |
|
|
(183,278 |
) |
|
|
(540,805 |
) |
Total comprehensive loss to the Company’s shareholders |
|
$ |
(16,899,454 |
) |
|
$ |
(17,300,944 |
) |
|
|
(27,495,558 |
) |
|
|
(26,338,570 |
) |
CENNTRO ELECTRIC GROUP LIMITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) |
||||||||
|
|
For the Six Months Ended June 30, |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
|
|
|
|
|
|
|
||
CASH FLOWS FROM OPERATING ACTIVITIES: |
|
|
|
|
|
|
||
Net cash used in operating activities |
|
$ |
(35,499,138 |
) |
|
$ |
(29,071,262 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES: |
|
|
|
|
|
|
|
|
Purchase of equity investment |
|
|
(680,932 |
) |
|
|
- |
|
Purchase of plant and equipment |
|
|
(5,082,473 |
) |
|
|
(145,857 |
) |
Purchase of land use right and property |
|
|
(2,200,559 |
) |
|
|
(9,260,497 |
) |
Acquisition of CAE’s equity interests |
|
|
(1,924,557 |
) |
|
|
(3,612,717 |
) |
Cash acquired from acquisition of CAE |
|
|
- |
|
|
|
1,118,700 |
|
Payment of expense for Acquisition of CAE’s equity interests |
|
|
- |
|
|
|
(348,987 |
) |
Proceeds from disposal of property, plant and equipment |
|
|
- |
|
|
|
320 |
|
Loans provided to third parties |
|
|
(100,000 |
) |
|
|
(5,149,884 |
) |
Repayment of loans from related parties |
|
|
- |
|
|
|
286,920 |
|
Net cash used in investing activities |
|
|
(9,988,521 |
) |
|
|
(17,112,002 |
) |
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Repayment of loans to related parties |
|
|
- |
|
|
|
(1,741,868 |
) |
Repayment of loans to third parties |
|
|
- |
|
|
|
(1,155,829 |
) |
Purchase of CAE’s loan |
|
|
- |
|
|
|
(13,228,101 |
) |
Reduction of capital |
|
|
- |
|
|
|
(13,930,000 |
) |
Redemption of convertible promissory notes |
|
|
(45,583,321 |
) |
|
|
- |
|
Payment of expense for the reverse recapitalization |
|
|
- |
|
|
|
(904,843 |
) |
Net cash used in financing activities |
|
|
(45,583,321 |
) |
|
|
(30,960,641 |
) |
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash |
|
|
(2,543,188 |
) |
|
|
(981,467 |
) |
|
|
|
|
|
|
|
|
|
Net decrease in cash, cash equivalents and restricted cash |
|
|
(93,614,168 |
) |
|
|
(78,125,372 |
) |
Cash, cash equivalents and restricted cash at beginning of period |
|
|
154,096,801 |
|
|
|
261,664,962 |
|
Cash, cash equivalents and restricted cash at end of period |
|
$ |
60,482,633 |
|
|
$ |
183,539,590 |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
|
|
|
|
|
|
|
|
Interest paid |
|
$ |
1,051,054 |
|
|
$ |
374,745 |
|
Income tax paid |
|
$ |
4,903 |
|
|
$ |
- |
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: |
|
|
|
|
|
|
|
|
Right of use assets obtained in exchange for operating lease obligations |
|
$ |
- |
|
|
$ |
7,613,564 |
|
Cashless exercise of warrants |
|
$ |
2,168,185 |
|
|
$ |
- |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20230814873892/en/
Investor Relations Contact:
MZ North America
CENN@mzgroup.us
949-491-8235
Company Contact:
PR@cenntroauto.com
IR@cenntroauto.com
Source: Cenntro Electric Group Ltd.