Tantech Announces Full Year 2020 Financial Results
LISHUI, China, April 28, 2021 /PRNewswire/ — Tantech Holdings Ltd (NASDAQ: TANH) ("Tantech" or the "Company"), a clean energy company in China, today announced its audited financial results for the year ended December 31, 2020.
Full Year 2020 Financial Results
|
For the Twelve Months Ended |
||||||||||||
|
($ millions, expect per share data and percentages) |
2020 |
2019 |
Change |
|||||||||
|
Revenues |
$ |
42.3 |
$ |
49.2 |
(14.1) |
% |
||||||
|
Consumer product |
$ |
29.4 |
$ |
45.8 |
(35.8) |
% |
||||||
|
Trading |
$ |
12.5 |
$ |
3.4 |
269.3 |
% |
||||||
|
Gross profit |
$ |
4.5 |
$ |
6.0 |
(25.0) |
% |
||||||
|
Gross margin |
10.6 |
% |
12.1 |
% |
(1.5) |
percentage points |
||||||
|
Net income (loss) attributable to common stockholders of Tantech Holdings Ltd |
$ |
(6.5) |
$ |
(6.3) |
$ |
(0.2) |
||||||
|
Basic/ Diluted earnings (loss) per share |
$ |
(0.22) |
$ |
(0.22) |
$ |
0.0 |
||||||
|
• |
Total revenues decreased 14.1% to $42.3 million from $49.2 million. The decrease was mainly attributable to the significant decrease of the Company’s revenues from consumer products due to COVID-19. However, the Company’ revenue from trading segment increased due to higher demands for its bamboo charcoal used for active charcoal masks, air purification and sanitation products in order to combat COVID-19. The Company also had higher revenue from EV segment as compared to 2019. |
|
• |
During the year 2020, due to the impact of COVID-19, our subsidiary Shangchi Automobile Co., Ltd. ("Shangchi Automobile") was unable to maintain normal operations and all sales and marketing events were disrupted due to travel restrictions and other government regulations. While the spread of COVID-19 has gradually been under control in China, it could adversely affect the Company’s business for the future. Shangchi Automobile has no immediate business plan to start manufacturing the electric vehicles. Management determined that the electric vehicle manufacturing license should be impaired. The Company recorded an impairment of $12.0 million for the year ended December 31, 2020. For the year ended December 31, 2019, the Company recorded an impairment of $1.1 million because the carrying amount was not recoverable and it exceeded its fair value based on the management’s assessment for the electric vehicle manufacturing license. |
|
• |
Gross profit decreased 25% to $4.5 million in 2020 from $6.0 million in 2019, and gross margin decreased to 10.6% from 12.1%, primarily due to lower revenues, and higher raw materials and supply chain costs, in the full year 2020 compared to the full year 2019. As a joint effort to fight COVID-19, the Company charged lower gross margin for certain orders. As a result, the gross margin of trading segment decreased to 5.4% in fiscal 2020 from 32.8% in fiscal 2019. |
|
• |
Selling expenses increased 205.3% to $1.0 million in 2020 from $0.3 million in 2019, as the Company complied with new, higher-cost sales activities, while continuing to invest in online marketing support and expanding its electric vehicle (the "EV") sales efforts during 2020. |
|
• |
General and administration expenses decreased 79.5% to $1.0 million in 2020 from $4.7 million in 2019. The decrease was primarily attributable to the recovery of bad debt provision of $1.3 million in 2020 as compared to 2019. |
|
• |
Research and development expenses increased $0.9 million in 2020 from $0.3 million in 2019, primarily due to increased activities related to electrical battery and vehicle research in the Company’s electric vehicle segment, mainly on driverless street sweepers, as compared to the same period last year. |
|
• |
Other expenses decreased 25.3% to $0.3 million from $0.4 million, primarily due to lower interest expense in 2020, as compared to 2019. |
|
• |
Net loss attributable to common stockholders of Tantech Holdings Ltd was increased to $6.5 million for the full year 2020 from a net loss of $6.3 million for the full year 2019, with net loss per share on both a basic and diluted basis of $0.22 in 2020 compared to $0.22 in 2019. |
|
• |
The Company maintains a positive working capital as of December 31, 2020 and generated positive cash flows from its operations for the years ended December 31, 2020 and 2019. As of December 31, 2020, the Company had a $37.1 million balance of cash and cash equivalents, with total shareholders’ equity of approximately $99.5 million. |
Mr. Wangfeng Yan, Chief Executive Officer of Tantech, said, "Our team remained focused during 2020 and adjusted to the global COVID-19 challenges. Government restrictions and closures slowed growth in our business, including the sales of our electric vehicles. We moved quickly, however, when the economy re-opened to restart our R&D efforts and re-engage with our supply channel and customers. On the other side, demand was stable in 2020 for our bamboo-based charcoal products, and our revenue from trading segment increased due to higher demands for our bamboo charcoal used for active charcoal masks, air purification and sanitation products in order to combat COVID-19. We were pleased that our strong supply chain relationships put us in a position to help people in such a difficult time."
Mr. Wangfeng Yan, Chief Executive Officer of Tantech, added, "We will continue to leverage our leadership position in the charcoal products industry to drive revenue, profit growth and increased operating cash flow. There are many opportunities in front of us given the estimated $30 billion size of the domestic China market for bamboo production, and bamboo’s position as a pillar industry of economic development. Our many innovations and strong brand recognition give us a competitive advantage, as we work to achieve the Company’s long-term strategic objectives. At the same time, we continue to build momentum in the EV market, where we currently hold more than 20 core technologies and patents about EV, including nanotechnology for raw materials for power lithium electronics, group technology of power lithium electronics and battery management technology. Our priority remains on leveraging our R&D expertise to develop new energy-efficient specialty-use electric vehicles, including driverless street sweepers. Our engineers have built sleek, high efficiency, low-operating-cost vehicles for the industrial market. Overall, we like the industrial EV market segment given its size, global footprint and support of favorable infrastructure policies in major markets."
About Tantech Holdings Ltd
For the past decade, Tantech has been a highly specialized high-tech enterprise producing, researching and developing bamboo charcoal-based products with an established domestic and international sales and distribution network. Since 2017 when the Company acquired 70% of Shangchi Automobile, a vehicle manufacturer based in Zhangjiagang City, Jiangsu Province, it has manufactured and sold vehicles. The Company established two new subsidiaries in November 2020, with the plan to produce and sell street sweepers and other electric vehicles. The Company is fully ISO 90000 and ISO 14000 certified and has received a number of national, provincial and local honors, awards and certifications for its quality products and scientific research efforts. For more information please visit: http://ir.tantech.cn.
Forward-Looking Statements
This news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulations, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the Company, are expressly qualified by this cautionary statement and any other cautionary statements which may accompany the forward-looking statements. In addition, the Company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
|
Tantech Holdings Ltd and Subsidiaries |
||||||||
|
Consolidated Balance Sheets |
||||||||
|
December 31, |
December 31, |
|||||||
|
Assets |
||||||||
|
Current Assets |
||||||||
|
Cash and cash equivalents (Note 3 at VIE) |
$ |
37,119,195 |
$ |
12,440,457 |
||||
|
Restricted cash (Note 3 at VIE) |
220,109 |
205,520 |
||||||
|
Accounts receivable, net (Note 3 at VIE) |
34,410,597 |
39,352,408 |
||||||
|
Inventories, net (Note 3 at VIE) |
671,251 |
595,627 |
||||||
|
Advances to suppliers, net (Note 3 at VIE) |
6,854,461 |
13,079,889 |
||||||
|
Advances to suppliers – related party |
1,533,000 |
– |
||||||
|
Prepaid taxes (Note 3 at VIE) |
1,046,667 |
2,396,349 |
||||||
|
Prepaid expenses and other receivables, net (Note 3 at VIE) |
45,467 |
91,377 |
||||||
|
Total Current Assets (Note 3 at VIE) |
81,900,747 |
68,161,627 |
||||||
|
Property, plant and equipment, net (Note 3 at VIE) |
2,477,912 |
2,700,034 |
||||||
|
Other Assets |
||||||||
|
Manufacturing rebate receivable (Note 3 at VIE) |
5,755,237 |
7,746,116 |
||||||
|
Intangible assets, net (Note 3 at VIE) |
664,033 |
12,959,017 |
||||||
|
Long-term Investment |
25,497,316 |
23,883,983 |
||||||
|
Total Other Assets (Note 3 at VIE) |
31,916,586 |
44,589,116 |
||||||
|
Total Assets (Note 3 at VIE) |
$ |
116,295,245 |
$ |
115,450,777 |
||||
|
Liabilities and Stockholders’ Equity |
||||||||
|
Current Liabilities |
||||||||
|
Short-term bank loans |
$ |
5,564,790 |
$ |
6,861,208 |
||||
|
Bank acceptance notes payable (Note 3 at VIE) |
1,753,109 |
205,520 |
||||||
|
Accounts payable (Note 3 at VIE) |
1,543,994 |
1,650,851 |
||||||
|
Due to related parties (Note 3 at VIE) |
2,019,087 |
1,838,603 |
||||||
|
Customer deposits (Note 3 at VIE) |
3,183,088 |
6,742,659 |
||||||
|
Taxes payable (Note 3 at VIE) |
571,354 |
102,704 |
||||||
|
Due to third parties |
306,600 |
287,200 |
||||||
|
Accrued liabilities and other payables (Note 3 at VIE) |
1,861,835 |
1,444,896 |
||||||
|
Total Current Liabilities (Note 3 at VIE) |
16,803,857 |
19,133,641 |
||||||
|
Deferred tax liability (Note 3 at VIE) |
– |
1,784,875 |
||||||
|
Total Liabilities (Note 3 at VIE) |
16,803,857 |
20,918,516 |
||||||
|
Stockholders’ Equity |
||||||||
|
Common stock, $0.001 par value, 50,000,000 shares authorized, 35,894,097 and 28,853,242 shares issued and outstanding as of December 31, 2020 and 2019, respectively |
35,894 |
28,853 |
||||||
|
Additional paid-in capital |
48,392,181 |
39,310,178 |
||||||
|
Statutory reserves |
6,437,506 |
6,379,276 |
||||||
|
Retained earnings |
45,480,031 |
52,058,681 |
||||||
|
Accumulated other comprehensive loss |
(1,493,070) |
(7,590,943) |
||||||
|
Total Stockholders’ Equity attributable to the Company |
98,852,542 |
90,186,045 |
||||||
|
Noncontrolling interest |
638,846 |
4,346,216 |
||||||
|
Total Stockholders’ Equity |
99,491,388 |
94,532,261 |
||||||
|
Total Liabilities and Stockholders’ Equity |
$ |
116,295,245 |
$ |
115,450,777 |
||||
|
Tantech Holdings Ltd and Subsidiaries |
||||||||||
|
Consolidated Statements of Comprehensive Income (Loss) |
||||||||||
|
For the Years Ended December 31 |
||||||||||
|
2020 |
2019 |
|||||||||
|
Revenues |
$ |
42,283,670 |
$ |
49,230,570 |
||||||
|
Cost of revenues |
37,807,297 |
43,253,070 |
||||||||
|
Gross Profit |
4,476,373 |
5,977,500 |
||||||||
|
Operating expenses |
||||||||||
|
Selling expenses |
977,201 |
319,946 |
||||||||
|
General and administrative expenses |
955,210 |
4,655,382 |
||||||||
|
Impairment of goodwill and intangible asset |
11,998,606 |
9,584,000 |
||||||||
|
Research and development expenses |
890,316 |
327,260 |
||||||||
|
Total operating expenses |
14,821,333 |
14,886,588 |
||||||||
|
Income (loss) from operations |
(10,344,960) |
(8,909,088) |
||||||||
|
Other income (expenses) |
||||||||||
|
Interest income |
50,732 |
53,060 |
||||||||
|
Interest expense |
(300,125) |
(443,262) |
||||||||
|
Other (loss) income, net |
(39,530) |
3,669 |
||||||||
|
Total other expenses |
(288,923) |
(386,533) |
||||||||
|
(Loss) income before income tax expense (credit) |
(10,633,883) |
(9,295,621) |
||||||||
|
Income tax expense (credit) |
(611,655) |
363,662 |
||||||||
|
Net (loss) income from continuing operations |
(10,022,228) |
(9,659,283) |
||||||||
|
Discontinued operation: |
||||||||||
|
Income from discontinued operations, net of tax |
– |
270,479 |
||||||||
|
Loss from disposal of discontinued operations |
– |
(569,891) |
||||||||
|
Net (loss) income from discontinued operations |
– |
(299,412) |
||||||||
|
Net (loss) income |
(10,022,228) |
(9,958,695) |
||||||||
|
Less: net loss attributable to noncontrolling interest from continuing operations |
(3,501,808) |
(3,601,728) |
||||||||
|
Net (loss) income attributable to common stockholders of Tantech Holdings Ltd |
$ |
(6,520,420) |
$ |
(6,356,967) |
||||||
|
Net (loss) income |
(10,022,228) |
(9,958,695) |
||||||||
|
Other comprehensive income (loss): |
||||||||||
|
Foreign currency translation adjustment |
5,892,311 |
(5,494,731) |
||||||||
|
Comprehensive (loss) income |
(4,129,917) |
(15,453,426) |
||||||||
|
Less: Comprehensive loss attributable to noncontrolling interest |
(3,707,370) |
(3,571,880) |
||||||||
|
Comprehensive income (loss) attributable to common stockholders of Tantech Holdings Ltd |
$ |
(422,547) |
$ |
(11,881,546) |
||||||
|
(Loss) earnings per share – Basic and Diluted |
||||||||||
|
Continuing operations |
$ |
(0.22) |
$ |
(0.21) |
||||||
|
Discontinued operations |
$ |
0.00 |
$ |
(0.01) |
||||||
|
Total |
$ |
(0.22) |
$ |
(0.22) |
||||||
|
Weighted Average Shares Outstanding – Basic and Diluted |
||||||||||
|
Continuing operations and discontinued operations |
29,566,243 |
28,853,242 |
||||||||
|
Tantech Holdings Ltd and Subsidiaries |
||||||||||
|
Consolidated Statements of Cash Flows |
||||||||||
|
For the Years Ended December 31 |
||||||||||
|
2020 |
2019 |
|||||||||
|
Cash flows from operating activities |
||||||||||
|
Net (loss) income |
$ |
(10,022,228) |
$ |
(9,958,695) |
||||||
|
Net loss (income) from discontinued operations |
– |
299,412 |
||||||||
|
Net (loss) income from continuing operations |
(10,022,228) |
(9,659,283) |
||||||||
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities: |
||||||||||
|
(Reversal of) Allowance for doubtful accounts – accounts receivable |
(845,416) |
1,297,752 |
||||||||
|
(Reversal of) Allowance for doubtful accounts – advance to suppliers |
(378,233) |
164,220 |
||||||||
|
(Reversal of) Allowance for doubtful accounts – other receivables |
(84,573) |
705,400 |
||||||||
|
Allowance for doubtful accounts – due from related party |
– |
– |
||||||||
|
Inventory reserve |
92,064 |
1,030,236 |
||||||||
|
Impairment of goodwill and intangible asset |
11,998,606 |
9,584,000 |
||||||||
|
Decrease in deferred tax liability |
(1,799,791) |
(165,500) |
||||||||
|
Depreciation expense |
436,427 |
462,639 |
||||||||
|
Amortization of intangible asset |
441,489 |
441,489 |
||||||||
|
Amortization of prepaid consulting expense |
– |
140,738 |
||||||||
|
Loss (gain) from disposal of property, plant and equipment |
68,614 |
(8,047) |
||||||||
|
Issuance of common stock for service |
33,812 |
– |
||||||||
|
Changes in operating assets and liabilities: |
||||||||||
|
Accounts receivable – non-related party |
8,024,036 |
(9,879,682) |
||||||||
|
Accounts receivable – related party |
– |
– |
||||||||
|
Advances to suppliers |
7,093,022 |
415,727 |
||||||||
|
Advances to suppliers, non-current |
– |
– |
||||||||
|
Advances to suppliers – related party |
(1,448,000) |
– |
||||||||
|
Inventory |
(125,492) |
242,142 |
||||||||
|
Prepaid expenses and other receivables |
133,768 |
9,127 |
||||||||
|
Manufacturing rebate receivable |
2,374,720 |
1,563,840 |
||||||||
|
Accounts payable |
(206,261) |
(751,363) |
||||||||
|
Accrued liabilities and other payables |
313,552 |
(78,923) |
||||||||
|
Customer deposits |
(3,792,409) |
6,184,836 |
||||||||
|
Collection of receivable from discontinued operations |
– |
8,962,187 |
||||||||
|
Taxes payable |
1,863,853 |
(597,392) |
||||||||
|
Net cash provided by continuing operations |
14,171,560 |
10,064,143 |
||||||||
|
Net cash provided by discontinued operations |
– |
4,632,769 |
||||||||
|
Net cash provided by operating activities |
14,171,560 |
14,696,912 |
||||||||
|
Cash flows from investing activities |
||||||||||
|
Acquisition of property, plant and equipment |
(144,806) |
(92,369) |
||||||||
|
Proceeds from disposal of property, plant and equipment |
21,842 |
16,580 |
||||||||
|
Additions to intangible assets |
– |
– |
||||||||
|
Payment for investment |
– |
(6,707,570) |
||||||||
|
Proceeds from disposition of subsidiaries |
– |
854,567 |
||||||||
|
Net cash used in continuing operations |
(122,964) |
(5,928,792) |
||||||||
|
Net cash used in discontinued operations |
– |
(1,522) |
||||||||
|
Net cash used in investing activities |
(122,964) |
(5,930,314) |
||||||||
|
Cash flows from financing activities |
||||||||||
|
Proceeds from (repayment of) loans from third parties |
– |
(2,823,890) |
||||||||
|
Notes receivable |
– |
– |
||||||||
|
Bank acceptance notes payable, net of repayment |
1,448,667 |
(1,823,003) |
||||||||
|
Proceeds from bank loans |
9,568,384 |
6,918,544 |
||||||||
|
Repayment of bank loans |
(11,230,688) |
(7,352,944) |
||||||||
|
Proceeds from (repayment of) loans from related parties, net |
98,474 |
(378,833) |
||||||||
|
Proceeds from issuance of common stock and warrants |
9,055,232 |
– |
||||||||
|
Net cash provided by (used in) continuing operations |
8,940,069 |
(5,460,126) |
||||||||
|
Net cash provided by discontinued operations |
– |
– |
||||||||
|
Net cash provided by (used in) financing activities |
8,940,069 |
(5,460,126) |
||||||||
|
Effect of exchange rate changes on cash, restricted cash and cash equivalents |
1,704,662 |
(530,288) |
||||||||
|
Net increase (decrease) in cash, restricted cash and cash equivalents |
24,693,327 |
2,776,184 |
||||||||
|
Cash, restricted cash and cash equivalents, beginning of year |
12,645,977 |
9,869,793 |
||||||||
|
Cash, restricted cash and cash equivalents, end of year |
$ |
37,339,304 |
$ |
12,645,977 |
||||||
|
Supplemental disclosure information: |
||||||||||
|
Income taxes paid |
$ |
436,566 |
$ |
1,105,876 |
||||||
|
Interest paid |
$ |
308,690 |
$ |
439,869 |
||||||
|
Supplemental non-cash activities: |
||||||||||
|
Common shares issued for service |
$ |
33,812 |
$ |
– |
||||||
