Microvast Reports Fiscal 2021 Second Quarter Results
Microvast Holdings (NASDAQ: MVST) reported Q2 2021 revenues of $33.4 million, marking a 53.8% increase year-over-year. However, the company faced a gross loss of $6.8 million, a significant downturn from a gross profit of $3.6 million in Q2 2020, driven by inventory write-downs and manufacturing cost increases due to semiconductor shortages. Net loss rose to $27.1 million from $7.9 million the previous year. Despite challenges, Microvast expects revenue growth in 2021 between $145 million and $155 million, with plans to expand manufacturing capacity.
- Q2 2021 revenue increased by 53.8%, reaching $33.4 million.
- Revenue guidance for FY 2021 is $145 million to $155 million, indicating potential growth of 34.9% to 44.2%.
- Plans to add 4 GWh manufacturing capacity in Tennessee and China are in progress, with completion expected in early 2023.
- Gross loss of $6.8 million in Q2 2021 compared to a gross profit of $3.6 million in Q2 2020.
- Net loss increased to $27.1 million from $7.9 million year-over-year.
- Challenges from inventory write-downs and increased manufacturing costs due to semiconductor shortages.
Microvast Holdings, Inc. (NASDAQ: MVST), a technology innovator that designs, develops and manufactures lithium-ion battery solutions, today announced the consolidated financial results for Microvast, Inc. (“Microvast”), its wholly owned subsidiary, for the quarter ended June 30, 2021 (“Q2 2021”). These business results were achieved prior to the completion of the business combination with Tuscan Holdings Corp. (“Tuscan”) on July 23, 2021.
Business Results
Q2 2021 revenue was
“Microvast posted solid revenue growth in Q2 2021 and we are excited to see continued growth in demand for our products,” said Yang Wu, Microvast’s Chief Executive Officer. “The closing of our recent business combination with Tuscan provided us with more than
“Our plans to add a total of 4 GWh of high-volume manufacturing capacity in our Clarksville, Tennessee and Huzhou, China facilities are moving forward,” said Shane Smith, Microvast’s Chief Operating Officer. “As a result of the delay in the closing of our business combination with Tuscan, we expect the new capacity to be online in early 2023. This timeline aligns with the updated production schedules and forecast requirements from our key customers as they also work to overcome industry-wide supply chain and logistics challenges. The demand for vehicle electrification and energy storage remains high as our customers and governments around the globe continue to emphasize the importance of clean energy. We are excited about our future opportunities.”
Business Outlook
Based on current business conditions, trends and other factors, Microvast is introducing a revenue guidance range for the fiscal year ending December 31, 2021 of
In addition, Microvast expects capital expenditures to be approximately
Microvast recently announced key strategic customer wins and will continue to collaborate with additional leading OEMs in the commercial vehicle sector on their electrification strategies. Microvast continues to believe its battery technologies are well positioned to see strong demand from OEMs of electric and fuel cell logistics and transport vehicles.
Explanatory Note
On July 23, 2021, Microvast completed its previously announced business combination with Tuscan and the resulting company was renamed Microvast Holdings, Inc. The business combination and related PIPE financing provided
The business results presented in this press release are for Microvast, Inc., a wholly owned subsidiary of Microvast Holdings, Inc., for the quarter ended June 30, 2021 (prior to the completion of the business combination with Tuscan). The quarterly financial results for Microvast, Inc. for the period ended June 30, 2021 were filed with the Securities and Exchange Commission (the “SEC”) on Form 8-K/A on Monday, August 16, 2021. The quarterly financial results for Microvast Holdings, Inc. (formerly known as Tuscan Holdings Corp.) for the period ended June 30, 2021 were filed with the SEC on Form 10-Q on August 16, 2021.
About Microvast
Microvast, Inc. is a technology innovator that designs, develops and manufactures lithium-ion battery solutions. Microvast is renowned for its cutting-edge cell technology and its vertical integration capabilities which extend from core battery chemistry (cathode, anode, electrolyte, and separator) to battery packs. By integrating the process from raw material to system assembly, Microvast has developed a family of products covering a breadth of market applications. Microvast was founded in 2006 and is headquartered in Houston, Texas. More information can be found on the corporate website: www.microvast.com.
MICROVAST, INC. |
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(In thousands of U.S. dollars, except share and per share data, or otherwise noted) |
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Three months ended |
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Six months ended |
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June 30, |
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June 30, |
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2020 |
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2021 |
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2020 |
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2021 |
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Revenues |
|
$ |
21,698 |
|
|
$ |
33,372 |
|
|
$ |
28,647 |
|
|
$ |
48,310 |
|
Cost of revenues |
|
|
(18,144 |
) |
|
|
(40,146 |
) |
|
|
(23,875 |
) |
|
|
(56,321 |
) |
Gross profit |
|
|
3,554 |
|
|
|
(6,774 |
) |
|
|
4,772 |
|
|
|
(8,011 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
|
(3,760 |
) |
|
|
(6,178 |
) |
|
|
(7,949 |
) |
|
|
(10,752 |
) |
Research and development expenses |
|
|
(4,242 |
) |
|
|
(5,895 |
) |
|
|
(7,960 |
) |
|
|
(9,681 |
) |
Selling and marketing expenses |
|
|
(2,686 |
) |
|
|
(3,706 |
) |
|
|
(6,008 |
) |
|
|
(6,862 |
) |
Total operating expenses |
|
|
(10,688 |
) |
|
|
(15,779 |
) |
|
|
(21,917 |
) |
|
|
(27,295 |
) |
Subsidy income |
|
|
650 |
|
|
|
213 |
|
|
|
841 |
|
|
|
2,131 |
|
Loss from operations |
|
|
(6,484 |
) |
|
|
(22,340 |
) |
|
|
(16,304 |
) |
|
|
(33,175 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
125 |
|
|
|
111 |
|
|
|
436 |
|
|
|
207 |
|
Interest expense |
|
|
(1,357 |
) |
|
|
(1,537 |
) |
|
|
(2,837 |
) |
|
|
(3,383 |
) |
Loss on changes in fair value of convertible notes |
|
|
- |
|
|
|
(3,243 |
) |
|
|
- |
|
|
|
(6,843 |
) |
Other expense, net |
|
|
(4 |
) |
|
|
49 |
|
|
|
(5 |
) |
|
|
44 |
|
Loss before provision for income taxes |
|
|
(7,720 |
) |
|
|
(26,960 |
) |
|
|
(18,710 |
) |
|
|
(43,150 |
) |
Income tax expense |
|
|
(137 |
) |
|
|
(109 |
) |
|
|
(275 |
) |
|
|
(218 |
) |
Net loss |
|
$ |
(7,857 |
) |
|
$ |
(27,069 |
) |
|
$ |
(18,985 |
) |
|
$ |
(43,368 |
) |
Cautionary Statement Regarding Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “guidance,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding Microvast’s industry and market sizes, future opportunities for Microvast and the combined company and Microvast’s estimated future results. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.
In addition to factors identified elsewhere in this communication, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) a delay or failure to realize the expected benefits from the business combination; (2) the impact of the ongoing COVID-19 pandemic; (3) changes in the highly competitive market in which Microvast competes, including with respect to its competitive landscape, technology evolution or regulatory changes; (4) changes in the markets that Microvast targets; (5) risk that Microvast may not be able to execute its growth strategies or achieve profitability; (6) the risk that Microvast is unable to secure or protect its intellectual property; (7) the risk that Microvast’s customers or third-party suppliers are unable to meet their obligations fully or in a timely manner; (8) the risk that Microvast’s customers will adjust, cancel, or suspend their orders for Microvast’s products; (9) the risk that Microvast will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all; (10) the risk of product liability or regulatory lawsuits or proceedings relating to Microvast’s products or services; (11) the risk that Microvast may not be able to develop and maintain effective internal controls; (12) the outcome of any legal proceedings that may be instituted against Microvast or any of its directors or officers; and (13) risks of operations in the People’s Republic of China.
Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond our control. All information set forth herein speaks only as of the date hereof in the case of information about Microvast or the date of such information in the case of information from persons other than Microvast, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding Microvast’s industry and end markets are based on sources we believe to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part. Annualized, pro forma, projected and estimated numbers are used for illustrative purpose only, are not forecasts and may not reflect actual results.
View source version on businesswire.com: https://www.businesswire.com/news/home/20210816005714/en/
FAQ
What were the financial results for Microvast in Q2 2021?
What is Microvast's revenue guidance for 2021?
How is the semiconductor shortage affecting Microvast?
What capacity expansion plans does Microvast have?
