Tantech Reports Financial Results for the First Six Months of 2021

Published: Oct. 22, 2021 at 3:30 PM CDT

LISHUI, China, Oct. 22, 2021 /PRNewswire/ -- Tantech Holdings Ltd (NASDAQ: TANH) ("Tantech" or the "Company"), a clean energy company in China, today reported its unaudited financial results for the six months ended June 30, 2021.

Mr. Wangfeng Yan, Chief Executive Officer of Tantech, said, "While we continue to have a competitive edge in selling our bamboo-based charcoal products, we have been working hard on the strategic shift in our business from being solely engaged in consumer product sales to expanding into the specialty vehicle market. We have focused on product costs as we have increased operating cash flow for our longer-term growth in the vehicle market. Ongoing COVID-19 challenges, including supply chain and logistics bottlenecks, have added cost and margin pressure in our ongoing consumer business, but we hope to see some stabilization into next year."

"As to our specialty vehicle and electric vehicle (EV) business, we believe our feature-rich, environmentally friendly customizable midibuses present an attractive option for corporate customer as businesses return to normal operations. We have invested heavily in technology advancements for specialty-use EVs rather than the more competitive, domestic general consumer EV market for this reason. We are fully committed to the EV segment, which we expect will be a key long-term growth driver for us. Despite some recent delays in government rebates related to EVs, longer term we expect our specialty EV business will expand with customer demand for a cleaner environment and for zero-emission vehicles. Importantly, we had approximately $40.7 million cash at June 30, 2021, which gives us the ability to fund our growth initiatives and build value for shareholders."



Financial Results

For the Six Months Ended
June 30,


($ millions, except per share data and
percentages)


2021



2020



Change


Revenues


$

20.6



$

22.9




(9.9)

%

Gross profit


$

4.0



$

3.1




29.3

%

Gross margin



19.3

%



13.4

%



5.9

 percentage points

Operating expenses


$

9.7



$

1.3




666.0

%

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


$

(6.6)



$

1.2




(636.8)

%

Basic/Diluted (loss) earnings per share


$

(0.18)



$

0.04



$

(0.22)


 

  • Total revenue decreased by approximately $2.3 million, or 9.9%, to approximately $20.6 million in the six months ended June 30, 2021 from approximately $22.9 million in the same period of 2020. The decrease was mainly attributable to the decrease of the sales volume of the Company's consumer products.

 

  • Our gross profit increased by approximately $0.9 million, or 29.3% to approximately $4.0 million in the six months ended June 30, 2021 from approximately $3.1 million in the same period of 2020. The gross profit margin was 19.3% in the six months ended June 30, 2021, as compared to 13.4% in the same period of 2020. On a segment basis, gross margins for consumer product and EV segments were 19.1% and 38.5%, respectively, for the six months ended June 30, 2021, compared to 13.6% and 5.3%, respectively, for the six months ended June 30, 2020. The increase in overall gross margin was primarily attributable to the higher average selling price of our charcoal-based products, offset by the decease of selling volume as compared to the same period last year.

 

  • Research and development expenses increased by $6.0 million, or 1,996.4%, to $6.4 million in the six months ended June 30, 2021 from $0.3 million in the same period of 2020. The increase was primarily due to the R&D activities in connection with our EV segment. During the six months ended June 30, 2021, we increased our investment significantly for the smart electric sanitation vehicles designed for closed industrial parks and residential communities. We have manufactured two prototype model vehicles and expect to receive orders from potential customers in the near future.

 

  • Total operating expenses increased by $8.4 million, or 666.0%, to $9.7 million in the six months ended June 30, 2021 from $1.3 million in the same period of 2020, which was mainly due to  increased research and development expenses of $6.0 million and  increased share based compensation of $1.8 million for the six months ended June 30, 2021 as compared to the same period of 2020. 

 

  • Our loss before income tax was approximately $5.7 million for the six months ended June 30, 2021, compared to an income before income tax of approximately $1.7 million for the six months ended June 30, 2020.

 

  • The Company had approximately $40.7 million cash on hand, and maintained positive working capital as of June 30, 2021.

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, Lishui Smart New Energy Automobile Co., Ltd. and Zhejiang Shangchi New Energy Automobile Co., Ltd., in November 2020, 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 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.

Tantech Holdings Ltd and Subsidiaries

Consolidated Balance Sheets

(Unaudited)




June 30,

2021



December 31,

2020


Assets









Current Assets









Cash and cash equivalents*


$

40,711,801



$

37,119,195


Restricted cash*



-




220,109


Accounts receivable, net*



36,369,508




34,410,597


Inventories, net*



420,194




671,251


Advances to suppliers, net *



7,054,987




6,854,461


Advances to suppliers – related party



-




1,533,000


Prepaid taxes*



1,177,989




1,046,667


Prepaid expenses and other receivables, net*



463,974




45,467


Total Current Assets*



86,198,453




81,900,747











Property, plant and equipment, net*



2,273,629




2,477,912











Other Assets









Manufacturing rebate receivable*



5,815,305




5,755,237


Intangible assets, net*



434,913




664,033


Long-term Investment



25,763,433




25,497,316


Total Other Assets*



32,013,651




31,916,586


Total Assets*


$

120,485,733



$

116,295,245











Liabilities and Stockholders' Equity









Current Liabilities









Short-term bank loans


$

5,313,070



$

5,564,790


Bank acceptance notes payable*



-




1,753,109


Accounts payable*



2,305,363




1,543,994


Due to related parties*



2,194,460




2,019,087


Customer deposits*



6,167,807




3,183,088


Taxes payable*



1,050,811




571,354


Due to third parties



-




306,600


Accrued liabilities and other payables*



960,446




1,861,835


Total Current Liabilities*



17,991,957




16,803,857


Total Liabilities*



17,991,957




16,803,857











Stockholders' Equity









Common stock, $0.001 par value, 50,000,000 shares authorized,
42,874,097 and 35,894,097 shares issued and outstanding as of June
30, 2021 and December 31, 2020, respectively



42,874




35,894


Additional paid-in capital



57,164,201




48,392,181


Statutory reserves



6,437,506




6,437,506


Retained earnings



38,909,553




45,480,031


Accumulated other comprehensive loss



(517,118)




(1,493,070)


Total Stockholders' Equity attributable to the Company



102,037,016




98,852,542


Noncontrolling interest



456,760




638,846


Total Stockholders' Equity



102,493,776




99,491,388


Total Liabilities and Stockholders' Equity


$

120,485,733



$

116,295,245



* please see "Note 3: Variable Interest Entities" in the notes accompanying the unaudited financial
statements filed on the Company's Report of Foreign Private Issuer on Form 6-K dated October 22, 2021.

Tantech Holdings Ltd and Subsidiaries

Consolidated Statements of Comprehensive Loss

(Unaudited)




For the Six Months Ended

June 30,




2021



2020


Revenues


$

20,633,188



$

22,889,784


Cost of revenues



16,660,387




19,817,263


Gross Profit



3,972,801




3,072,521











Operating expenses









Selling expenses



122,045




201,217


General and administrative expenses



1,399,295




763,945


Share-based compensation



1,840,000




-


Research and development expenses



6,351,853




302,553


Total operating expenses



9,713,193




1,267,715











 (Loss) income from operations



(5,740,392)




1,804,806











Other income (expenses)









Interest income



57,374




17,962


Interest expense



(137,594)




(184,288)


Government subsidy income



47,033




10,926


Rental income from a related party



67,166




-


Other income, net



1,796




6,593


Total other income (expenses)



35,775




(148,807)











(Loss) income before provision for income taxes



(5,704,617)




1,655,999


Provision for income taxes



1,047,595




684,804


Net (loss) income



(6,752,212)




971,195


Less: net loss attributable to noncontrolling interest



(181,734)




(253,220)


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


$

(6,570,478)



$

1,224,415











Net (loss) income



(6,752,212)




971,195


Other comprehensive income (loss):









Foreign currency translation adjustment



975,600




(1,394,434)


Comprehensive loss



(5,776,612)




(423,239)


Less: Comprehensive loss attributable to noncontrolling interest



(182,086)




(251,974)


Comprehensive loss attributable to common stockholders of
Tantech Holdings Ltd.


$

(5,594,526)



$

(171,265)











(Loss) earnings per share - Basic and Diluted


$

(0.18)



$

0.04


Weighted Average Shares Outstanding - Basic and Diluted



37,253,764




28,872,602


Tantech Holdings Ltd and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)




For the Six Months Ended June 30,




2021



2020


Cash flows from operating activities









Net (loss) income


$

(6,752,212)



$

971,195


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









Depreciation expense



234,756




227,049


Amortization of intangible asset



235,593




216,781


Allowance for doubtful accounts - accounts receivable



14,395




-


Loss from disposal of property, plant and equipment



-




2,867


Issuance of common stock for services



1,840,000




33,812


Inventory markdown



296,702




-


Changes in operating assets and liabilities:









Accounts receivable



(1,611,062)




(4,653,105)


Advances to suppliers



(128,735)




9,607,140


Advances to suppliers - related party



1,546,000




(1,422,000)


Inventory



(39,140)




(1,317,697)


Prepaid expenses and other receivables



(417,223)




8,280


Accounts payable



743,811




1,032,112


Accrued liabilities and other payables



(917,137)




232,756


Customer deposits



2,945,780




(2,908,226)


Taxes payable, net of prepaid taxes



352,443




409,442


Net cash (used in) provided by operating activities



(1,656,029)




2,440,406











Cash flows from investing activities









Acquisition of property, plant and equipment



(5,086)




(9,524)


Proceeds from disposal of property, plant and equipment



-




21,450


Net cash (used in) provided by investing activities



(5,086)




11,926











Cash flows from financing activities









Proceeds from equity financing



6,939,000




-


Repayment of loans from third party



(309,200)




-


Bank acceptance notes payable, net of repayment



(1,767,975)




1,221,327


Proceeds from bank loans



2,473,600




6,652,116


Repayment of bank loans



(2,782,800)




(6,794,316)


Proceeds from (repayment of) loans from related parties, net



161,589




(557,765)


Net cash provided by financing activities



4,714,214




521,362











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



319,398




(198,016)











Net increase in cash, restricted cash and cash equivalents



3,372,497




2,775,678











Cash, restricted cash and cash equivalents, beginning of period



37,339,304




12,645,977











Cash, restricted cash and cash equivalents, end of period


$

40,711,801



$

15,421,655











Supplemental disclosure information:









Income taxes paid


$

709,980



$

28,487


Interest paid


$

137,594



$

168,560


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SOURCE Tantech Holdings Ltd.

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