Greenland Technologies Reports Third Quarter 2022 Unaudited Financial Results

Rhea-AI Summary

Greenland Technologies Holding Corporation (NASDAQ: GTEC) reported a 67% increase in net income for Q3 2022, reaching $2.1 million compared to $1.3 million in Q3 2021. Total revenue decreased to $21.8 million from $23.1 million a year earlier, primarily due to unfavorable foreign exchange impacts. Gross margin remained steady at 22.1%. The company opened a new 54,000 sq. ft. assembly facility in Baltimore, enhancing production capabilities. A recent $10 million capital raise strengthens its balance sheet and supports growth initiatives.

Positive

• Net income increased 67% to $2.1 million.
• Operating expenses decreased 10% to $2.7 million.
• Opened new assembly facility in Baltimore expected to produce 500 units annually.
• Launched exclusive vehicle tracking system enhancing product offering.

Negative

• Total revenue decreased 5.6% to $21.8 million, impacted by foreign exchange.
• Gross profit declined to $4.8 million from $5.1 million.

-3Q22 Net Income Increases 67% Compared to 3Q21

EAST WINDSOR, N.J., Nov. 9, 2022 /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 third quarter ended September 30, 2022.

Third Quarter 2022 Financial and Operating Highlights

• Total revenue was $21.8 million, compared with $23.1 million a year ago.
• Gross margin was 22.1%, on par with the same period of 2021.  
• Total operating expenses was $2.7 million, 10% lower from a year ago due to improved operating efficiencies.
• Net income was $2.1 million, an increase of 67% from $1.3 million in the same period of 2021.
• Transmissions products sold were 31,303 units, slightly higher than 31,050 units last year.

Mr. Raymond Wang, Chief Executive Officer of Greenland Technologies Holding Corporation, commented, "While we are not immune to the ongoing global supply chain challenges, inflationary pressures and lockdowns in China, we made significant progress in the areas that will drive our long-term growth and build value for shareholders. For example, we are firmly on track with our capacity plans for the U.S., and we are seeing an improvement in the supply chain with lower freight costs and speed.  We are also benefitting from the full support of Maryland's local and state level officials after formally opening our new Baltimore facility. They share in our leadership vision of the opportunities for electrification of industrial vehicles and the positive economic impact from job creation, related commerce and positives for the environment.  This represents a significant opportunity for Greenland and the communities we operate in."

"We are also pleased with the additional innovation and further development with our strategic partners of new features for our vehicles that not only differentiate our HEVI brand but add premium value for our customers, including tracking now available with vehicle purchase. This is an essential selling point as operators laser focus on fleet ROI and asset utilization. Overall, we continue to benefit from several Greenland-specific catalysts. We are entering Q4 with a solid backlog and expect our results to more accurately reflect our business fundamentals as we move through 2023 and current headwinds become tailwinds. Longer-term we continue to make steady progress toward our ambitious goals, including the ramping our new U.S. assembly facility. This will serve as a powerful, high visibility showcase for our vehicles, which we expect will drive sales by helping us convert customer interest into orders when they see our innovative vehicles in person." 

Mr. Jing Jin, Chief Financial Officer of Greenland, commented: "Our third quarter revenue was negatively impacted by the stronger dollar. Excluding FX impact, our revenue in Chinese RMB actually grew 2% year-over-year.  During Q3, we also improved our operating efficiency by streamlining and simplifying our product lines, which led to a 10% decrease in our operating expenses and contributed to our 67% increase in net income. Looking ahead, we will continue to manage operating expenses closely as we shift our focus towards ramping up HEVI production capacity and deployment capabilities."

Recent Developments and Strategic Highlights:

• Launched Vehicle Tracking System: Greenland selected Cyngn Inc. ("Cyngn") (Nasdaq: CYN), a developer of innovative autonomous driving solutions for industrial and commercial applications, as the exclusive supplier of Infinitracker asset tracking systems for the Company's HEVI electric industrial vehicles. The Infinitrackers will enable HEVI vehicle consumers to track their vehicle locations through a simple web portal.
• Launch of Assembly Site in Baltimore, Maryland: Greenland opened a 54,000 square foot assembly facility in Baltimore, Maryland to support local service, assembly, and distribution of its electric industrial heavy equipment product line. The Company anticipates this facility will be able to produce over 500 units a year and create 4 to 5 dozen green jobs at full capacity.
• Siemens EV Chargers Compatible with HEVI Products: HEVI electric products has successfully tested compatible with Siemens's EV charging station network at their site in Wendell, NC.  This is the start of a campaign to ensure HEVI compatibility with all major EV charging station providers in the US.
• Closed $10 Million Registered Direct and Private Placement: Greenland raised $10.0 million via a registered offering and a private placement with Aegis Capital Corp as the placement agent. This transaction significantly strengthen Greenland's balance sheet and the Company intends to use the net proceeds for working capital and general corporate purposes.

Third Quarter 2022 Financial Results

Total revenue was $21.8 million, compared with $23.1 million in the third quarter of 2021, primarily due to the impact of unfavorable foreign exchange. On an RMB basis, total revenues increased by approximately 2% from the third quarter of 2021. The number of transmission products sold was 31,303 units, up 1% from 31,050 units in the third quarter of 2021.

Costs of goods sold were $17.0 million, a decrease of 6% from $18.0 million in the third quarter of 2021, primarily due to the impact of foreign exchange.

Gross profit was $4.8 million, compared with $5.1 million in the third quarter of 2021, primarily due to the impact of unfavorable foreign exchange. Gross margin was 22.1%, on par with the third quarter of 2021.

Total operating expenses were $2.7 million, a decrease of 10% from $3.0 million in the third quarter of 2021. Operating expenses as a percentage of total revenues was 12.6%, down 60 basis points from 13.2% in the third quarter of 2021. The decrease in operating expenses was primarily due to improved operating efficiency.

Income from operations was $2.07 million, an increase of 1% from $2.05 million in the third quarter of 2021. 

Net income was $2.1 million, an increase of 67% from $1.3 million in the third quarter of 2021, primarily due to improved operating efficiency, increase in grant income and lower effective tax rate.

Basic and diluted net income per ordinary share were both $0.1, compared with $0.09 in the third quarter of 2021.

Conference Call

Greenland Technologies management will host an earnings conference call at 8:00 AM on Wednesday, November 9, 2022, U.S. Eastern Time (9:00 PM on November 9, 2022, Beijing/Hong Kong Time).

Participant Registration

Investors and analysts interested in participating in Greenland's third quarter 2022 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/BIe16b8fc2914c4c76ba13993c76c2a903

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.

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 and Definitive Proxy Statement on Schedule 14A filed with the 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 STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2022 AND 2021
(UNAUDITED, IN U.S. DOLLARS)
		For the three months ended September 30,								For the nine months ended September 30,
		2022				2021				2022				2021
REVENUES		$	21,786,862			$	23,084,793			$	71,696,324			$	75,899,994
COST OF GOODS SOLD			16,974,566				17,987,363				55,676,893				59,993,008
GROSS PROFIT			4,812,296				5,097,430				16,019,431				15,906,986
Selling expenses			521,865				522,770				1,679,600				1,397,462
General and administrative expenses			1,192,210				1,150,769				3,716,590				2,814,120
Research and development expenses			1,023,443				1,372,215				2,968,572				3,337,056
Total operating expenses		$	2,737,518			$	3,045,754			$	8,364,762			$	7,548,638
INCOME FROM OPERATIONS		$	2,074,778			$	2,051,676			$	7,654,669			$	8,358,348
Interest income			12,790				4,737				35,239				14,165
Interest expense			(125,981)				(106,506)				(322,641)				(508,359)
Loss on disposal of property and equipment			(301)				-				(695)				(959)
Other income			655,838				231,466				1,418,580				830,515
INCOME BEFORE INCOME TAX		$	2,617,124			$	2,181,373			$	8,785,152			$	8,693,710
INCOME TAX			518,931				927,844				1,392,735				1,844,619
NET INCOME		$	2,098,193			$	1,253,529			$	7,392,417			$	6,849,091
LESS: NET INCOME ATTRIBUTABLE TO    NONCONTROLLING INTEREST			820,229				225,181				2,840,137				911,422
NET INCOME ATTRIBUTABLE TO GREENLAND    TECHNOLOGIES HOLDING CORPORATION    AND SUBSIDIARIES		$	1,277,964			$	1,028,348			$	4,552,280			$	5,937,669
OTHER COMPREHENSIVE INCOME (LOSS):			(4,552,121)				(605,515)				(8,253,663)				(29,781)
Unrealized foreign currency translation income (loss)    attributable to Greenland Technologies Holding    Corporation and subsidiaries			(2,974,517)				(433,694)				(5,446,475)				(31,313)
Unrealized foreign currency translation income (loss)    attributable to Noncontrolling interest			(1,577,604)				(171,821)				(2,807,188)				1,532
Comprehensive income (loss)			(1,696,553)				594,654				(894,195)				5,906,356
Noncontrolling interest			(757,375)				53,360				32,949				912,954
WEIGHTED AVERAGE ORDINARY SHARES    OUTSTANDING:
Basic and diluted			12,222,387				11,329,530				11,628,243				10,715,132
NET INCOME PER ORDINARY SHARE    ATTRIBUTABLE TO OWNERS OF THE    COMPANY:
Basic and diluted			0.10				0.09				0.39				0.55

 

GREENLAND TECHNOLOGIES HOLDING CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2022 AND DECEMBER 31, 2021
(UNAUDITED, IN U.S. DOLLARS)
		September 30,				December 31,
		2022				2021
ASSETS
Current assets
Cash and cash equivalents		$	11,306,600			$	11,062,590
Restricted cash			3,720,931				6,738,302
Short Term Investment			12,243,140				2,105,938
Notes receivable			31,606,518				37,551,121
Accounts receivable, net of allowance for doubtful accounts of $774,452 and    $859,319, respectively			18,344,356				15,915,002
Inventories			21,884,848				25,803,474
Due from related parties-current			35,462,308				39,679,565
Advance to suppliers			676,823				434,893
Prepayments and other current assets			96,323				14,518
Total Current Assets		$	135,341,847			$	139,305,403
Non-current asset
Property, plant, equipment and construction in progress, net			15,503,755				18,957,553
Land use rights, net			3,550,039				4,035,198
Other intangible assets			157,153				-
Deferred tax assets			126,872				141,623
Goodwill			3,890				3,890
Operating lease right-of-use assets			2,748,910				80,682
Other non-current assets			242,866				44,093
Total non-current assets		$	22,333,485			$	23,263,039
TOTAL ASSETS		$	157,675,332			$	162,568,442

 

		September 30,				December 31,
		2022				2021
Current Liabilities
Short-term bank loans		$	8,715,822			$	8,760,945
Notes payable-bank acceptance notes			33,716,344				42,093,061
Accounts payable			23,954,824				29,064,132
Taxes payables			-				108,058
Customer deposits			196,125				387,919
Due to related parties			1,594,227				3,619,459
Other current liabilities			1,622,362				1,198,427
Current portion of operating lease liabilities			462,365				33,308
Long-term payables - current			-				197,915
Total current liabilities		$	70,262,069			$	85,463,224
Long-term liabilities
Long-term payables – non-current			-				-
Long term operating lease liabilities			2,293,844				47,614
Other long-term liabilities			1,828,340				2,212,938
Total long-term liabilities		$	4,122,184			$	2,260,552
TOTAL LIABILITIES		$	74,384,253			$	87,723,776
COMMITMENTS AND CONTINGENCIES
EQUITY
Ordinary shares, no par value, unlimited shares authorized; 12,579,530 and    11,329,530 shares issued and outstanding as of September 30, 2022 and    December 31, 2021.			-				-
Additional paid-in capital			32,955,927				23,759,364
Statutory reserves			3,842,331				3,842,331
Retained earnings			38,220,976				33,668,696
Accumulated other comprehensive income (loss)			(4,432,076)				1,014,399
Total shareholders' equity		$	70,587,158			$	62,284,790
Non-controlling interest			12,703,921				12,559,876
TOTAL EQUITY		$	83,291,079			$	74,844,666
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	157,675,332			$	162,568,442

 

 

 

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SOURCE Greenland Technologies Holding Corporation

FAQ

What were Greenland Technologies' Q3 2022 earnings results?

In Q3 2022, Greenland Technologies reported a net income of $2.1 million, a 67% increase from Q3 2021, despite total revenue decreasing to $21.8 million.

How did foreign exchange impact Greenland Technologies' revenue?

Foreign exchange negatively affected total revenue, which would have increased by approximately 2% year-over-year in RMB.

What are Greenland Technologies' future plans following the Q3 2022 results?

The company plans to ramp up HEVI production capacity and deployment capabilities while managing operational costs closely.

What significant facility did Greenland Technologies open recently?

Greenland opened a 54,000 square foot assembly facility in Baltimore, Maryland, expected to produce over 500 units per year.