Tantech Announces Full Year 2022 Financial Results

About this update from Tantech Holdings Ltd.

LISHUI, China , May 1, 2023 /PRNewswire/ -- Tantech Holdings Ltd (NASDAQ: TANH ) (" Tantech " or the "Company"), a clean energy company, today reported its audited financial results for the twelve months ended December 31, 2022. For the year ended December 31 , 2022 2021 Change Revenues $ 53,490 55,264 -3.2 % Gross profit 10,093 10,431 -3.2 % Gross Margin 18.9 % 18.9 % 0.0 % Operating expenses 5,520 18,946 -70.9 % Net income (loss) attributable to common stockholders $ 3,021 (8,358) -136.1 % Earnings (loss) from continuing operations per share $ 3.03 (48.35) N/A Revenues decreased by approximately $1.8 million , or 3.2%, to approximately $53.5 million in fiscal 2022 from approximately $55.3 million in fiscal 2021. The decreased was mainly attributable to decrease of approximately $4.4 million in revenues from consumer products and decrease of approximately $1.3 million in revenues from EV segment, due to weak consumer market as the result of soft economy, partially offset by increase of approximately $4.0 million in revenues from biodegradable packaging business which we started in fiscal 2022. Our gross profit decreased by approximately $0.3 million , or 3.2% to approximately $10.1 million in fiscal 2022 from approximately $10.4 million in fiscal 2021. The gross profit margin were 18.9% in both fiscal 2022 and 2021. On segment basis, gross margins for consumer product segment, EV segment, and biodegradable packaging business were 20.4%, (3.4)% and 2.7%, respectively, in fiscal 2022, compared to 18.7%, 24.2%, and nil, respectively, in fiscal 2021. Research and development expenses decreased by approximately $7.8 million , or 97.2%, to approximately $0.2 million in fiscal 2022 from approximately $8.1 million in fiscal 2021. The decrease was primarily due to less R&D activities in connection with our EV segment in fiscal 2022. Total operating expenses decreased by approximately $13.4 million , or 70.9%, to approximately $5.5 million in fiscal 2022 from approximately $18.9 million in fiscal 2021, which was mainly due to decrease of approximately $7.8 million in research and development expenses, decrease of approximately $3.8 million in general and administrative expense and decrease of approximately $1.8 million in share-based compensation in fiscal 2022 compared to fiscal 2021. Our income before income tax was approximately $5.7 million in fiscal 2022, an increase of approximately $14.0 million compared to loss of approximately $8.3 million in fiscal 2021. The increase was primarily attributable to a decrease of approximately $13.4 million in operating expenses compared to fiscal 2021. As of December 31, 2022 , we had cash and restricted cash of approximately $19.0 million . Our current assets were approximately $106.8 million and our current liabilities were approximately $13.5 million , which resulted in a current ratio of 7.9:1. Total shareholders' equity as of December 31, 2022 was approximately $115.9 million . Mr. Wangfeng Yan, Chief Executive Officer of Tantech , said, "Our revenue is stable at $53.5 million for the full year 2022, and net income attributable to common shareholders is positive at $3 million after losses in the proceeding 3 years. We are very glad to achieve this result given the COVID-19 pandemic and closures in China in 2022." "In the meantime, we expanded our business into several sectors and transformed our business to focus more on the specialty electric vehicles (EVs) market. We are building our presence methodically, with our R&D investments and technology advancements more in specialty-use EVs which we believe will be a key long-term growth driver for us, rather than general consumer EV market." Mr. Wangfeng Yan continued, "in 2022 we also started biodegradable packaging business. This market has been growing rapidly in recent years, driven by increased awareness of environmental issues and the desire to reduce plastic waste. Biodegradable packaging can break down naturally in the environment without leaving behind harmful pollutants or waste." Mr. Wangfeng Yan concluded, "In 2022 we had $106.8 million current assets balance with just $13.5 million in current liabilities. There are many opportunities for us to explore and add value for shareholders. With continuing leadership in bamboo charcoal-based products and our unique knowledge in specialty EV segment, we have full confidence in the future development of the Company." About Tantech Holdings Ltd For the last two decades, Tantech has been a leading high-tech enterprise pioneering and specializing in producing, researching and developing products based on bamboo charcoals with a well-established domestic and international sales and distribution network. Tantech expanded into the clean vehicle industry in 2017 through acquiring 70% shares of Shangchi Automobile. In November 2020 , Tantech established two additional subsidiaries, Lishui Smart New Energy Automobile Co., Ltd. and Zhejiang Shangchi New Energy Automobile Co., Ltd. , to produce and market electric vehicles, including automatic high-speed street sweepers and others. The Company's subsidiary, First International Commercial Factoring (Shenzhen) Co., LTD , is engaged in commercial factoring for businesses in and related to its supply chain. Tantech has recently expanded its operation into international markets. In May and July 2022 , the Company established wholly-owned subsidiaries, EPakia Inc. and EPakia Canada Inc. , in the United States and Canada to develop biodegradable packaging business in the North American and other international markets. The Company is fully ISO 90000 and ISO 14000 certified and has received numerous national, provincial and local honors, awards and certifications for its 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 the sales, 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, except as expressly required by applicable laws. Tantech Holdings Ltd and Subsidiaries Consolidated Balance Sheets December 31 , December 31 , 2022 2021 Assets Current Assets Cash and cash equivalents $ 18,976,684 $ 43,144,049 Restricted cash 4,827 422,832 Accounts receivable, net 40,174,332 44,962,926 Financing receivable 43,864,192 — Inventories, net 898,686 1,069,698 Due a from related party — 10,354,051 Advances to suppliers, net 1,291,998 3,420,628 Prepaid taxes 494,467 1,609,466 Prepaid expenses and other receivables, net 1,051,631 824,239 Total Current Assets 106,756,817 105,807,889 Other Assets Property, plant and equipment, net 1,656,442 2,103,947 Intangible assets, net 184,822 205,971 Right of use assets 1,417,088 313,172 Long-term investment 24,116,835 26,096,079 Total Non-current Assets 27,375,187 28,719,169 Total Assets $ 134,132,004 $ 134,527,058 Liabilities and Stockholders' Equity Current Liabilities Short-term bank loans $ 3,636,591 $ 4,719,552 Accounts payable 2,118,705 1,563,787 Due to related parties 1,047,512 1,847,421 Customer deposits 1,826,996 3,580,622 Taxes payable 1,251,975 823,701 Loan payable to third parties — 7,002,385 Lease liabilities-current 161,480 115,330 Accrued liabilities and other payables 3,497,532 2,114,258 Total Current Liabilities 13,540,791 21,767,056 Due to third parties-long term 3,395,861 — Lease liabilities-non-current 1,259,958 223,291 Total Liabilities 18,196,610 21,990,347 Stockholders' Equity Common stock, $0.24 par value, 6,000,000 shares authorized, 1,217,906and 266,640 shares issued and outstanding as of December 31, 2022 and2021, respectively* 292,299 63,995 Additional paid-in capital 79,454,309 69,566,786 Statutory reserves 7,490,398 6,874,614 Retained earnings 39,090,079 36,684,794 Accumulated other comprehensive (loss) income (8,242,727) 1,071,149 Total Stockholders' Equity attributable to the Company 118,084,358 114,261,338 Noncontrolling interest (2,148,964) (1,724,627) Total Stockholders' Equity 115,935,394 112,536,711 Total Liabilities and Stockholders' Equity $ 134,132,004 $ 134,527,058 *Retroactively restated for one-for-twenty-four reverse split with effective date of November 9, 2022 . Tantech Holdings Ltd and Subsidiaries Consolidated Statements of Income (Loss) and Comprehensive Loss Ended December 31 , 2022 2021 Revenues $ 53,490,294 $ 55,263,673 Cost of revenues 43,397,756 44,832,347 Gross Profit 10,092,538 10,431,326 Operating expenses Selling expenses 278,013 221,364 General and administrative expenses 5,013,933 8,831,407 Share based compensation — 1,840,000 Impairment of goodwill and intangible asset — Research and development expenses 227,829 8,053,400 Total operating expenses 5,519,775 18,946,171 Income (loss) from operations 4,572,763 (8,514,845) Other income (expenses) Interest income 208,142 117,735 Interest expense (602,037) (740,400) Financing interest income 1,400,227 — Rental income from related party 89,039 117,958 Gain from sale property to a related party — 545,874 Other income (loss), net 60,031 210,176 Total other (expenses) income 1,155,402 251,343 Income (loss) before income tax 5,728,165 (8,263,502) Income tax provision (benefit) 3,141,969 2,429,480 Net income (loss) 2,586,196 (10,692,982) Less: net loss attributable to noncontrolling interest (434,873) (2,334,853) Net income (loss) attributable to common stockholders of Tantech Holdings Ltd $ 3,021,069 $ (8,358,129) Net income (loss) 2,586,196 (10,692,982) Other comprehensive income (loss): Foreign currency translation adjustment (9,303,340) 2,535,599 Comprehensive loss (6,717,144) (8,157,383) Less: Comprehensive loss attributable to noncontrolling interest (424,337) (2,363,473) Comprehensive loss attributable to common stockholdersof Tantech Holdings Ltd $ (6,292,807) $ (5,793,910) Earnings (loss) per share - Basic and Diluted* Basic $ 3.03 $ (48.35) Diluted $ 3.00 $ (48.35) Weighted Average Shares Outstanding Basic 996,934 172,864 Diluted 1,006,169 172,864 *Retroactively restated for one-for-twenty-four reverse split with effective date of November 9, 2022 . Tantech Holdings Ltd and Subsidiaries Consolidated Statements of Cash Flows Ended December 31 , 2022 2021 Cash flows from operating activities Net income (loss) $ 2,586,196 $ (10,692,982 ) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Allowance (reversal of) for doubtful accounts - accountsreceivable 738,922 (52,789 ) Allowance for (reversal of) doubtful accounts - advance tosuppliers 49,038 (142,799 ) Write off manufacturing rebate receivable — 5,819,059 Reversal of for doubtful accounts – other receivables — — Share based compensation — 1,840,000 Inventory reserve 51,676 359,501 Impairment of goodwill and intangible asset — — Decrease in deferred tax liability — — Depreciation expense 344,852 444,462 Amortization of intangible asset 8,356 472,140 Amortization of right of use assets 347,127 44,964 (Gain) Loss from disposal of property, plant and equipment (6,291 ) (545,844 ) Issuance of common stock for service — — Contingent liability — 535,389 Changes in operating assets and liabilities: Accounts receivable - non-related party 673,738 (9,573,463 ) Advances to suppliers 1,885,042 3,694,066 Advances to suppliers - related party — 1,550,000 Inventory 43,811 (737,552 ) Prepaid expenses and other receivables (296,077 ) (768,288 ) Manufacturing rebate receivable — — Accounts payable 671,669 (16,266 ) Accrued liabilities and other payables 1,560,046 (323,441 ) Customer deposits (1,518,851 ) 318,875 Lease liabilities (366,772 ) (19,824 ) Taxes payable 1,520,519 (295,666 ) Net cash provided by (used in) operating activities 8,293,001 (8,090,458 ) Cash flows from investing activities Acquisition of property, plant and equipment (79,273 ) (220,308 ) Proceeds from disposal of property, plant and equipment 35,792 748,612 Additions to intangible assets (2,692 ) (4,220 ) Financing receivable (44,953,234 ) — Net cash (used in) provided by investing activities (44,999,407 ) 524,084 Cash flows from financing activities (Repayment of) proceeds from (repayment of) loans fromthird parties — 6,917,589 Repayment of loans from third parties (3,151,786 ) (310,000 ) Bank acceptance notes payable, net of repayment — (1,772,550 ) Cancellation of common stock due to reverse split (4,573 ) — Proceeds from bank loans 3,875,478 7,774,800 Repayment of bank loans (4,618,488 ) (8,738,900 ) Proceeds from (repayment of) loans from related parties,net 9,071,272 (10,428,196 ) Proceeds from issuance of common stock and warrants 10,120,400 19,362,706 Net cash provided by financing activities 15,292,303 12,805,449 Effect of exchange rate changes on cash, restricted cash and cashequivalents (3,171,267 ) 988,502 Net (decrease) increase in cash, restricted cash and cashequivalents (24,585,370 ) 6,227,577 Cash, restricted cash and cash equivalents, beginning of year 43,566,881 37,339,304 Cash, restricted cash and cash equivalents, end of year $ 18,981,511 $ 43,566,881 Supplemental disclosure information: Income taxes paid $ 2,590,282 $ 2,278,134 Interest paid $ 474,579 $ 265,248 The accompanying notes are an integral part of these consolidated financial statements. For more information, please contact: Golden Communication International, LLC William Tu , [email protected] Tel: +1 202-656-3688 View original content: https://www.prnewswire.com/news-releases/tantech-announces-full-year-2022-financial-results-301812040.html SOURCE Tantech Holdings Ltd.

View stock analysis, news, and events for Tantech Holdings Ltd.