Tantech Announces Interim Financial Results for Six Months E

|Sep 30|magazine30 min read

 

LISHUI, China, Sept. 30, 2020 /PRNewswire/ -- Tantech Holdings Ltd. (NASDAQ: TANH), ("Tantech" or the "Company"), a clean energy company in China, today announced its unaudited interim financial results for the six months ended June 30, 2020.

Financial Highlights



For the Six Months Ended June 30,


($ millions, expect per share data and percentages)


2020



2019



%Change

Revenues


$

22.9



$

21.0




9.3%

Consumer product


$

16.2



$

20.7




(21.9)%

Trading


$

6.3



$

0.2




3,180%

Gross profit


$

3.1



$

3.7




(16.5)%

Gross margin



13.4%



17.6%



(4.2) percentage points

Operating margin



7.9%



9.0%



(1.1) percentage points

Net income from continuing operations


$

1.0



$

1.2




(18.5)%

Net income (loss) from discontinued operations


$

0.00



$

(0.76)




(100)%

Net income


$

1.0



$

0.4




125.3%

Basic/ Diluted earnings per share


$

0.04



$

0.02




100%

 



  • Total revenues increased 9.3% to $22.9 million from $21.0 million.  Sales in the Company's trading segment increased significantly due to a demand surge for bamboo charcoal used for air purification and sanitation products, which more than offset a decrease in the Company's consumer product segment primarily due to the impact of COVID-19 disruptions and closures.


  • Gross profit decreased 16.5% to $3.1 million from $3.7 million, and gross margin decreased by 4.2% to 13.4% from 17.65, primarily due to product mix. 


  • Selling expenses decreased 25% to $0.20 million from $0.27 million, primarily reflects a decrease in in-person sales activities due to COVID-19 closures and a shift toward lower cost, online marketing support during the first six months in fiscal 2020 compared to the same period last year.


  • General and administration expenses decreased 48% to $0.76 million from $1.5 million The decrease was primarily attributable to COIVD-19 closures, along with a decrease in professional fees and consulting expenses, as compared to the same period last year.


  • Research and development expenses increased $0.30 million from $0.04 million, primarily due to increased activities related to electrical battery and vehicle research in the Company's electric vehicle segment, as compared to the same period last year.


  • Other income decreased 50% to $0.02 million from $0.04 million, primarily due to lower government subsidy income, as compared to the same period last year.  


  • Net income increased 125.3% to $1.0 million from $0.4 million, with a 100% increase in earnings per share on both a basic and diluted basis to $0.04 from $0.02 in the same period last year.


  • As of June 30, 2020, the Company had a $15.4 million balance of cash and cash equivalents, with total shareholders' equity of approximately $94.1 million.

Mr. Wangfeng Yan, Chief Executive Officer of Tantech, said, "2020 has been a very challenging year across all industries worldwide.  We are truly fortunate that we were able to help people in this time of incredible need and loss.  Revenue in our trading segment surged to $6.3 million in the first six months of 2020 from $0.2 million in the year ago period.  The strong increase was driven by demand for our bamboo charcoal used for active charcoal masks, air purification and sanitation products in order to combat COVID-19.  This growth more than offset the decline in our consumer product segment, which declined due to the temporary suspension of manufacturing activities in compliance with government restrictions around COVID-19.  We were able to restart manufacturing activities in the middle of February but had to work with customers and suppliers that continued to face business disruptions and closures.  We are pleased to report that we have seen a steady rebound in sales in our consumer product segment, with demand strong through September, as customers continued to purchase our cleaning, purification and deodorization products.  We are working to meet the higher than normal seasonal demand levels and expect higher growth in the second half of 2020.  Earlier investments we made in our brand, supply chain, strategic inventory and time spent nurturing meaningful relationships are proving critical to us as we maintain full access to raw materials, production facilities and our distribution channel." 

"Given the challenging macro environment at the start of 2020, we made the strategic decision to temporarily scale back our EV development and production efforts at the same time we temporarily suspended our consumer product manufacturing activities.  In addition to the COVID-19 closures in the first half of 2020, it was evident our EV production costs would not be covered due to changes in the government rebate policy issued in 2019.  We have since resumed full activities in this segment given the strong underlying market growth dynamics for electric vehicles led by a sustainability focus, China's environmental protection policy, and an improved, state-of-the-art driver experience.  We are building our presence slowly and methodically, in order to maximize the impact of our R&D investments and technology advancements in specialty-use EV motors rather than the more competitive, domestic general consumer EV market.  We are confident in our position and remain fully committed to the EV sector, which we expect will be a key long-term growth driver for us, but are also open to evaluating certain international markets in Asia, including those for gasoline powered motors, as we strive to maintain well-balanced working capital and positive operating cash flow."

About Tantech Holdings Ltd.

Established in 2001 and headquartered in Lishui City, Zhejiang Province, China, Tantech, together with its subsidiaries, is now, in addition to be a developer and manufacturer of bamboo-based charcoal, an innovative leader in the design, manufacture and distribution of electric vehicles. The Company has also invested in mining business in 2018 and 2019.

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
Condensed Consolidated Balance Sheets
(Unaudited)



June 30,



December 31,




2020



2019









Assets









Current Assets









Cash and cash equivalents (Note 3 at VIE)


$

15,418,825



$

12,440,457


Restricted cash (Note 3 at VIE)



2,830




205,520


Accounts receivable, net (Note 3 at VIE)



43,407,119




39,352,408


Inventories, net (Note 3 at VIE)



1,898,128




595,627


Advances to suppliers, net (Note 3 at VIE)



3,328,762




13,079,889


Advances to suppliers – related party



1,415,000




-


Prepaid taxes (Note 3 at VIE)



2,249,606




2,396,349


Prepaid expenses and other receivables, net (Note 3 at VIE)



81,801




91,377


Total Current Assets (Note 3 at VIE)



67,802,071




68,161,627











Property, plant and equipment, net (Note 3 at VIE)



2,419,897




2,700,034











Other Assets









Manufacturing rebate receivable (Note 3 at VIE)



7,632,838




7,746,116


Intangible assets, net (Note 3 at VIE)



12,553,791




12,959,017


Long-term Investment



23,534,705




23,883,983


Total Other Assets (Note 3 at VIE)



43,721,334




44,589,116


Total Assets (Note 3 at VIE)


$

113,943,302



$

115,450,777











Liabilities and Stockholders' Equity









Current Liabilities









Short-term bank loans


$

6,619,370



$

6,861,208


Bank acceptance notes payable (Note 3 at VIE)



1,417,830




205,520


Accounts payable (Note 3 at VIE)



2,653,740




1,650,851


Due to related parties (Note 3 at VIE)



1,055,926




1,626,120


Customer deposits (Note 3 at VIE)



3,959,521




6,955,142


Taxes payable (Note 3 at VIE)



396,930




102,704


Due to third parties



283,000




287,200


Accrued liabilities and other payables (Note 3 at VIE)



1,655,377




1,444,896


Total Current Liabilities (Note 3 at VIE)



18,041,694




19,133,641


Deferred tax liability (Note 3 at VIE)



1,758,774




1,784,875


Total Liabilities (Note 3 at VIE)



19,800,468




20,918,516











Stockholders' Equity









Common stock, $0.001 par value, 50,000,000 shares authorized, 28,888,834 and 28,853,242 shares issued and outstanding



28,889




28,853


Additional paid-in capital



39,343,954




39,310,178


Statutory reserves



6,379,276




6,379,276


Retained earnings



53,283,096




52,058,681


Accumulated other comprehensive loss



(8,986,623)




(7,590,943)


Total Stockholders' Equity attributable to the Company



90,048,592




90,186,045


Noncontrolling interest



4,094,242




4,346,216


Total Stockholders' Equity



94,142,834




94,532,261


Total Liabilities and Stockholders' Equity


$

113,943,302



$

115,450,777


Tantech Holdings Ltd and Subsidiaries
Condensed Consolidated Statements of Comprehensive Loss
(Unaudited)



For the Six Months Ended June 30,




2020



2019









Revenues


$

22,889,784



$

20,950,575


Cost of revenues



19,817,263




17,271,777


Gross Profit



3,072,521




3,678,798











Operating expenses









Selling expenses



201,217




266,516


General and administrative expenses



763,945




1,480,952


Research and development expenses



302,553




35,751


Total operating expenses



1,267,715




1,783,219











Income (loss) from operations



1,804,806




1,895,579











Other income (expenses)









Interest income



17,962




31,614


Interest expense



(184,228)




(228,855)


Government subsidy income



10,926




-


Other income, net



6,593




38,200


Total other income (expenses)



(148,807)




(159,041)











Income before provision for income taxes



1,655,999




1,736,538


Provision for income taxes



684,804




545,520


Net income from continuing operations



971,195




1,191,018











Discontinued operation:









Income from discontinued operations, net of tax



-




(759,695)


Net income from discontinued operations



-




(759,695)











Net income



971,195




431,323


Less: net loss attributable to noncontrolling interest from continuing operations



(253,220)




(233,808)


Net income attributable to common stockholders of Tantech Holdings Ltd.


$

1,224,415



$

665,131











Net income



971,195




431,323


Other comprehensive income (loss):









Foreign currency translation adjustment



(1,394,434)




(4,059,144)


Comprehensive income (loss)



(423,239)




(3,627,821)


Less: Comprehensive loss attributable to noncontrolling interest



(251,974)




(218,403)


Comprehensive income (loss) attributable to common stockholders of Tantech Holdings Ltd.


$

(171,265)



$

(3,409,418)











Earnings (loss) per share - Basic and Diluted









Continuing operations


$

0.04



$

0.05


Discontinued operations


$

-



$

(0.03)


Total


$

0.04



$

0.02


Weighted Average Shares Outstanding - Basic and diluted









Continuing operations and discontinued operations



28,872,602




28,853,242


Tantech Holdings Ltd and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)



For the Six Months Ended June 30,




2020



2019


Cash flows from operating activities









Net income


$

971,195



$

431,323


Net loss from discontinued operations



-




759,695


Net income from continuing operations



971,195




1,191,018


Adjustments to reconcile net income (loss) to net cash provided by operating activities:









Depreciation expense



227,049




237,039


Amortization of intangible asset



216,781




224,708


Amortization of prepaid consulting expense



-




140,738


Loss (gain) from disposal of property, plant and equipment



2,867




(8,017)


Issuance of common stock for service



33,812




-


Changes in operating assets and liabilities:









Accounts receivable - non-related party



(4,653,105)




(2,250,145)


Advances to suppliers



9,607,140




8,132,865


Advances to suppliers- related party



(1,422,000)




-


Inventory



(1,317,697)




123,653


Prepaid expenses and other receivables



8,280




(17,958)


Manufacturing rebate receivable



-




1,591,920


Accounts payable



1,032,112




(303,835)


Accrued liabilities and other payables



232,756




(370,284)


Customer deposits



(2,908,226)




69,605


Taxes payable



409,442




(25,988)


Net cash provided by continuing operations



2,440,406




8,735,319


Net cash provided by discontinued operations



-




2,630,211


Net cash provided by operating activities



2,440,407




11,365,530











Cash flows from investing activities









Acquisition of property, plant and equipment



(9,524)




(104,815)


Proceeds from disposal of property, plant and equipment



21,450




16,214


Net cash provided by (used in) continuing operations



11,926




(88,601)


Net cash used in discontinued operations



-




(470)


Net cash provided by (used in) investing activities



11,926




(89,071)











Cash flows from financing activities









Proceeds from (repayment of) loans from third parties



-




(2,874,595)


Bank acceptance notes payable, net of repayment



1,221,327




(2,048,388)


Proceeds from bank loans



6,652,116




4,242,172


Repayment of bank loans



(6,794,316)




(4,684,372)


Repayment of loans from related parties, net



(557,765)




(534,993)


Net cash used in continuing operations



521,362




(5,900,176)


Net cash provided by discontinued operations



-




-


Net cash used in financing activities



521,362




(5,900,176)











Effect of exchange rate changes on cash, restricted cash and cash equivalents



(198,016)




(429,963)











Net increase (decrease) in cash, restricted cash and cash equivalents



2,775,678




4,946,320











Cash, restricted cash and cash equivalents, beginning of year



12,645,977




9,869,793











Cash, restricted cash and cash equivalents, end of year


$

15,421,655



$

14,816,113











Supplemental disclosure information:









Income taxes paid


$

28,487



$

581,843


Interest paid


$

168,560



$

237,568


 

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SOURCE Tantech Holdings Ltd.