TOYO Co., Ltd Announces First Half 2024 Unaudited Financial Results

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TOYO's first half 2024 results show a remarkable turnaround from the previous year. With $138.1 million in revenue and a 19.3% gross margin, the company has quickly established itself as a significant player in the solar industry. The net income of $19.6 million is particularly impressive, considering the $1.9 million loss in H1 2023.

However, investors should note the potential headwinds. The ongoing U.S. trade investigation into Southeast Asian solar manufacturers could impact TOYO's shipments and pricing. This uncertainty has already led to a reduction in expected annual shipments from 2.5 GW to 1.9 GW. The company's strategy to diversify markets and establish U.S. manufacturing is prudent but may impact short-term profitability.

TOYO's rapid ramp-up to 985 MW shipped in just six months is noteworthy in the competitive solar market. The planned 2 GW U.S. module manufacturing facility signals a strategic move to mitigate trade risks and capture the growing U.S. market. However, the company faces challenges:

Expiration of the two-year tariff exemption
Ongoing anti-dumping and countervailing duties investigation
Potential application of measures despite Japanese parentage

TOYO's pivot to other markets like India and the Middle East is a smart diversification strategy, but success will depend on their ability to compete in these price-sensitive markets while maintaining profitability.

TOYO's performance indicates strong demand for advanced N-Topcon solar modules, particularly in the U.S. market. The global cooperation agreement with OCI Company enhances their supply chain credibility, which is important in the current environment of increased scrutiny on solar product origins.

The reduction in expected shipments from 2.5 GW to 1.9 GW for 2024 reflects the market's sensitivity to trade investigations. This adjustment, while significant, still represents substantial growth. The company's cash position improvement from $19.0 million to $44.4 million in six months demonstrates strong cash generation, providing a buffer for potential market volatilities and planned expansions.

08/21/2024 - 08:00 AM

TOKYO, Aug. 21, 2024 /PRNewswire/ -- TOYO Co., Ltd (Nasdaq: TOYO) ("TOYO" or the "Company"), a solar solution company, today announced its financial results for the six months ended June 30, 2024.

First Six Months of 2024 Highlights

Revenues of $138.1 million versus $0 revenues in the first half of 2023
Gross Margin of 19.3%
Net income of $19.6 million versus a loss of $1.9 million in the first half of 2023
985 MW shipped

"We are pleased with our financial and operational achievements in the first half of 2024, highlighting our team's outstanding execution capabilities," said Junsei Ryu, Chairman and CEO of TOYO. "Since we commenced manufacturing in October 2023, our facility has successfully delivered 1.3 GW of solar cells to customers. Customer feedback on the product's technical specifications and quality has been exceptional, and our team showed that they were able to establish high-volume cell manufacturing using advanced automation in the industry in record time. Confident in our ability to replicate this success, we are gearing up and expecting to begin the construction of a 2 GW solar module manufacturing facility in the U.S. in the fourth quarter of 2024."

Revenues for the first half of 2024 were $138.1 million, increased from zero in the comparable six months in 2023. The increase was primarily driven by sales as the facility increased its production capacity, which commenced in October 2023.

The cost of revenues was $111.4 million for the first six months of 2024, compared to zero for the same period of the last year, reflecting the absence of production in the same period of 2023.

Selling and marketing expenses were $0.36 million for the first six months of 2024 compared to zero for the same period of the last year.

General and administrative expenses were $3.8 million for the first six months of 2024, compared to $1.8 million for the same period of the last year.

Total operating expenses increased to $4.2 million for the first six months of 2024, from $1.8 million for the same period of the last year.

Net income was $19.6 million for the first six months of 2024, compared to a net loss of $1.9 million for the same period of the last year.

Earnings per share, basic and diluted, was $0.48 for the first six months of 2024, compared to a loss per share, basic and diluted of $0.05 for the same period of the last year3.

As of June 30, 2024, the Company had $44.4 million in cash and restricted cash in total, compared to $19.0 million as of December 31, 2023.

Recent Developments

Completed business combination with Blue World Acquisition Corporation and, the ordinary shares of TOYO started trading on the Nasdaq Stock Market on July 2, 2024
Signed a global cooperation agreement with OCI Company Limited, a major Korean silicon material supplier, to offer our customers trustworthy and verifiable photovoltaic products
Reached the final stage of negotiations to build a 2GW solar module manufacturing plant in the United States

Business Outlook

At the beginning of the year, annual shipments were expected to reach 2.5 GW based on the demands of solar utilities, primarily in the U.S., for advanced N-Topcon solar modules and the strong brand reputation of TOYO Solar's affiliate, Vietnam Sunergy Joint Stock Company. However, due to the U.S. trade investigation into Southeast Asian solar manufacturers, which included TOYO's facility in Vietnam, the Company and its major clients have decided to reduce shipment volumes until the announcement of preliminary investigation results expected to be available between September to November 2024. As a result, the Company currently expects to deliver over 1.9 GW in orders during the full year 2024.

"The expiration of the two-year tariff exemption period at the beginning of June, combined with the probe into anti-dumping and countervailing duties by the U.S. Department of Commerce and International Trade Commission, have injected near-term uncertainty into pricing and demand for advanced solar products from the U.S., TOYO's primary market," commented Mr. Ryu.

"While these measures are targeted towards Chinese solar companies with operations in Southeast Asia, they also might apply to TOYO, despite having a Japanese parent company. To address this situation, we are accelerating plans to build out our U.S. manufacturing presence while increasing shipments to customers based in India, the Middle East, and other markets. Our strategy to build an integrated value chain in North America serving our U.S. customers remains unchanged, and we will continue to observe and adapt to dynamic industry conditions."

Conference Call

TOYO will host a webcast and conference call to discuss its first half of 2024 results on August 21, 2024, at 9:30 a.m. ET. A live webcast and a slide presentation will be available on TOYO's investor relations website in the "Events" section at investors.toyo-solar.com.

The dial-in numbers for the conference call are as follows:

Participant (toll-free): 1-800-579-2543

Participant (international): 1-203-518-9843

A webcast replay will be available for one year following the call's completion on the Company's investor relations website at investors.toyo-solar.com.

Exchange Rate Information

This announcement contains translations of certain Vietnamese Dong, or VND, amounts into U.S. dollars at a specified rate solely for the reader's convenience. Unless otherwise noted, except for the ash balance made at a rate of VND25,455 to US$1.00, the exchange rate as of June30, 2024, all translations from VND to U.S. dollars and from U.S. dollars to VND are made at a rate of VND 24,962 to US$1.00, the average exchange rate for period of six months ended June 30, 2024, set forth in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the VND or U.S. dollar amounts referenced could be converted into U.S. dollars or VND, as the case may be, at any particular rate or at all.

About TOYO Co., Ltd.

TOYO is a solar solutions company that is committed to becoming a full-service solar solutions provider in the global market, integrating the upstream production of wafers and silicon, midstream production of solar cells, downstream production of photovoltaic modules, and potentially other stages of the solar power supply chain. TOYO is well-positioned to produce high-quality solar cells at a competitive scale and cost.

Forward-Looking Statements

This press release includes "forward-looking statements" within the meaning of the "safe harbor" provisions of the United States Private Securities Litigation Reform Act of 1995. Forward-looking statements may be identified by the use of words such as "estimate," "plan," "project," "forecast," "intend," "will," "expect," "anticipate," "believe," "seek," "target" or other similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding the expected growth of TOYO, the expected order delivery of TOYO, TOYO's construction plan of manufactures and strategies of building up integrated value chain in the U.S. . These statements are based on various assumptions, whether or not identified in this press release, and on the current expectations of TOYO's management and are not predictions of actual performance.

These statements involve risks, uncertainties, and other factors that may cause actual results, levels of activity, performance, or achievements to be materially different from those expressed or implied by these forward-looking statements. Although TOYO believes that it has a reasonable basis for each forward-looking statement contained in this press release, TOYO caution you that these statements are based on a combination of facts and factors currently known and projections of the future, which are inherently uncertain. In addition, there are risks and uncertainties described in the documents filed by TOYO from time to time with the SEC. These filings may identify and address other important risks and uncertainties that could cause actual events and results to differ materially from those contained in the forward-looking statements.

TOYO cannot assure you that the forward-looking statements in this press release will prove to be accurate. These forward-looking statements are subject to several risks and uncertainties, including, among others, the outcome of any potential litigation, government or regulatory proceedings, the sales performance of TOYO, and other risks and uncertainties, including but not limited to those included under the heading "Risk Factors" of the filings of TOYO with the SEC. There may be additional risks that TOYO does not presently know or that TOYO currently believes are immaterial that could also cause actual results to differ from those contained in the forward-looking statements. In light of the significant uncertainties in these forward-looking statements, nothing in this press release should be regarded as a representation by any person that the forward-looking statements set forth herein will be achieved or that any of the contemplated results of such forward-looking statements will be achieved. The forward-looking statements in this press release represent the views of TOYO as of the date of this press release. Subsequent events and developments may cause those views to change. However, while TOYO may update these forward-looking statements in the future, there is no current intention to do so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing the views of TOYO as of any date subsequent to the date of this press release. Except as may be required by law, TOYO does not undertake any duty to update these forward-looking statements.

Contact Information:

For TOYO Co., Ltd.
IR@toyo-solar.com

Crocker Coulson
Email: crocker.coulson@aummedia.org
Tel: (646) 652-7185

TOYO Co., Ltd.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(Currency expressed in United States Dollars ("US$"), except for number of shares)

	June 30,		December 31,
	2024		2023
	(unaudited)
ASSETS
Current Assets
Cash	$	41,669,523	$	18,035,405
Restricted cash		129,635		82,195
Accounts receivable – a related party		121,118		—
Prepayments		229,992		149,304
Prepayments – a related party		27,048,348		24,400,798
Inventories, net		27,190,797		39,999,992
Other current assets		169,005		85,702
Total Current Assets		96,558,418		82,753,396

Non-current Assets
Restricted cash, non-current		2,587,665		879,893
Deferred offering costs		2,576,390		2,084,810
Long-term prepaid expenses		7,311,709		7,757,193
Deposits for property and equipment		1,364,798		1,466,878
Property and equipment, net		130,812,056		142,781,558
Right of use assets		233,357		537,032
Other non-current assets		—		22,250
Total Non-current Assets		144,885,975		155,529,614
Total Assets	$	241,444,393	$	238,283,010

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term bank borrowings	$	34,008,887	$	—
Accounts payable		25,018,771		37,221,124
Contract liabilities		4,913,175		530,817
Contract liabilities – a related party		9,137,458		28,815,934
Due to related parties		68,509,793		96,867,739
Other payable and accrued expenses		3,771,701		5,606,763
Lease liabilities, current		32,901		151,260
Total Current Liabilities		145,392,686		169,193,637

Lease liabilities, non-current		228,240		372,725
Long-term bank borrowings		22,412,628		11,819,527
Total Non-current Liabilities		22,640,868		12,192,252
Total Liabilities		168,033,554		181,385,889

Commitments and Contingencies

Shareholders' Equity
Ordinary shares (par value $0.0001 per share, 500,000,000 shares authorized, 41,000,000 and 41,000,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023, respectively)*		4,100		4,100
Additional paid-in capital		50,005,900		49,995,900
Retained earnings		29,252,764		9,702,316
Accumulated other comprehensive loss		(5,851,925)		(2,805,195)
Total Shareholders' Equity		73,410,839		56,897,121
Total Liabilities and Shareholders' Equity	$	241,444,393	$	238,283,010

* The share information is presented on a retroactive basis to reflect the reorganization effected on February 27, 2024.

TOYO Co., Ltd.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME (LOSS)
(Currency expressed in United States Dollars ("US$"), except for number of shares)

	For the Six Months Ended June 30,
	2024		2023
Revenues from related parties	$	112,287,775	$	—
Revenues from third parties		25,790,220		—
Revenues		138,077,995		—

Cost of revenues – related parties		(84,435,258)		—
Cost of revenues – third parties		(26,995,841)		—
Cost of revenues		(111,431,099)		—
Gross profit		26,646,896		—

Operating expenses
Selling and marketing expenses		(355,026)		—
General and administrative expenses		(3,836,158)		(1,756,468)
Total operating expenses		(4,191,184)		(1,756,468)

Income (loss) from operations		22,455,712		(1,756,468)

Other expenses, net
Interest expenses, net		(1,767,661)		(165,644)
Other expenses, net		(1,137,603)		(148)
Total other expenses, net		(2,905,264)		(165,792)

Income (loss) before income taxes		19,550,448		(1,922,260)

Income tax expenses		—		—
Net income (loss)	$	19,550,448	$	(1,922,260)

Other comprehensive loss
Foreign currency translation adjustment		(3,046,730)		(1,632,089)
Comprehensive income (loss)	$	16,503,718	$	(3,554,349)

Weighted average number of ordinary share outstanding – basic and diluted*		41,000,000		41,000,000
Earnings (loss) per share – basic and diluted*	$	0.48	$	(0.05)

* The share information is presented on a retroactive basis to reflect the reorganization effected on February 27, 2024.

TOYO Co., Ltd.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Currency expressed in United States Dollars ("US$")

	For the Six Months Ended June 30,
	2024		2023
Net cash provided by (used in) operating activities	$	21,798,732	$	(1,860,902)

Cash flows from investing activities:
Purchase of property and equipment		(16,592,618)		(79,638,281)
Purchase of property and equipment from a related party		—		(4,512,810)
Net cash used in investing activities		(16,592,618)		(84,151,091)

Cash flows from financing activities:
Capital injection from shareholders		10,000		42,360,581
Proceeds from short-term bank borrowings		34,680,563		—
Proceeds from long-term bank borrowings		11,363,413		—
Proceeds from borrowings from a related party		5,000,000		44,774,119
Repayment of borrowings to a related party		(27,992,018)		—
Payments of offering costs		(1,569,634)		(593,335)
Net cash provided by financing activities		21,492,324		86,541,365

Effect of exchange rate changes on cash		(1,309,108)		(1,549,580)

Net increase (decrease) in cash		25,389,330		(1,020,208)
Cash and restricted cash at beginning of period		18,997,493		2,065,448
Cash and restricted cash at end of period	$	44,386,823	$	1,045,240

Supplemental cash flow information
Cash paid for interest expense to a bank	$	1,059,748	$	—
Cash paid for interest expense to a related party	$	631,388	$	—
Cash paid for income tax	$	—	$	—

Supplemental cash flow information for non-cash operating, investing and financing activities:
Operating lease right-of-use assets obtained in exchange for operating lease liabilities	$	—	$	472,163
Purchase of property, plant and equipment financed by accounts payable	$	23,024,401	$	14,749,735
Payment of offering cost financed by other payable	$	700,000	$	—


Reconciliation of cash and restricted cash to the consolidated balance sheets
	June 30, 2024		December 31, 2023
Cash	$	41,669,523	$	18,035,405
Restricted cash		129,635		82,195
Restricted cash, non-current		2,587,665		879,893
	$	44,386,823	$	18,997,493

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SOURCE TOYO Co., Ltd

FAQ

What were TOYO's revenue and net income for H1 2024?

TOYO reported revenues of $138.1 million and a net income of $19.6 million for the first half of 2024.

How many megawatts did TOYO ship in H1 2024?

TOYO shipped 985 MW in the first half of 2024.

What is TOYO's revised shipment forecast for 2024?

TOYO has revised its 2024 shipment forecast from 2.5 GW to over 1.9 GW due to U.S. trade investigations.

When did TOYO's ordinary shares start trading on Nasdaq?

TOYO's ordinary shares started trading on the Nasdaq Stock Market on July 2, 2024.

What are TOYO's plans for U.S. manufacturing?

TOYO plans to begin construction of a 2 GW solar module manufacturing facility in the U.S. in the fourth quarter of 2024.

TOYO Co., Ltd Announces First Half 2024 Unaudited Financial Results

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FAQ

What were TOYO's revenue and net income for H1 2024?

How many megawatts did TOYO ship in H1 2024?

What is TOYO's revised shipment forecast for 2024?

When did TOYO's ordinary shares start trading on Nasdaq?

What are TOYO's plans for U.S. manufacturing?

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TOYO Co., Ltd Announces First Half 2024 Unaudited Financial Results

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FAQ

What were TOYO's revenue and net income for H1 2024?

How many megawatts did TOYO ship in H1 2024?

What is TOYO's revised shipment forecast for 2024?

When did TOYO's ordinary shares start trading on Nasdaq?

What are TOYO's plans for U.S. manufacturing?

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