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Dec 22, 2019 2:03 AM ET

Tantech Holdings Announces Interim Financial Results for Six Months Ended June 30, 2019


iCrowd Newswire - Dec 22, 2019

LISHUI, China,– 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, 2019.

Six-Month 2019 Financial Highlights

   

For the Six Months Ended June 30,

 

($ millions, expect per share data and
percentages)

 

2019

 

2018

 

% Change

 

Revenues

 

$

20.95

 

$

14.93

   

40.3

%

Consumer product

 

$

20.76

 

$

11.23

   

84.9

%

Trading

 

$

0.19

 

$

3.70

   

(94.9)

%

Gross profit

 

$

4.48

 

$

4.59

   

(2.4)

%

Gross margin

   

21.4

%

 

30.7

%

 

(9.3)

 percentage points

Operating margin

   

9.0

%

 

17.2

%

 

(8.2)

 percentage points

Net income from continuing operations

 

$

1.19

 

$

2.09

   

(43.1)

%

Net loss from discontinued operations

 

$

(0.76)

 

$

(0.50)

   

50.7

%

Net income

 

$

0.43

 

$

1.59

   

(72.9)

%

Basic/ Diluted earnings per share

 

$

0.02

 

$

0.07

   

(71.4)

%

The Company has reclassified certain amounts on the financial statements for the six months ended June 30, 2018. These reclassifications are related to the revenue and cost allocations between continuing and discontinued operations, as well as the change of presentation from gross basis to net basis for the revenues generated from one of the Company’s subsidiaries. The effects of these reclassifications on the Company’s consolidated financial statements for the six months ended June 30, 2018 are summarized as follows:

These reclassifications on the financial statements had no effect on the reported net income, comprehensive income/loss, total cash flows and the consolidated balance sheets as of and for the six months ended June 30, 2018.

Mr. Zhengyu Wang, Chairman of Board of Directors and former Chief Executive Officer of Tantech, said, “We are pleased with the acceleration in our revenue growth, which was up 40.3% for the first six months of 2019 as compared to the same period in 2018.  In the past, our primary sales channel for charcoal products was directly through supermarkets.  We found that given required credit terms, the payback period was too long for the working capital required.  As a result, we changed our distribution to leverage the wholesale channel, while driving sales and a significant improvement in our collection process.  Our actions along with increased Chinese consumer environmental awareness, helped positively improve our overall sales and cash flow generation. Our net income, on a per share basis, was adversely impacted by the loss per share of $0.03 from discontinued operations which are no longer strategic to our Company.  These headwinds are not operational issues and should therefore not impact our results moving forward.  Adding to our confidence is our healthy balance sheet, with a cash and cash equivalents balance of $14.8 million at June 30, 2019, compared to $7.7 million at December 31, 2018.”

“While our Company’s core business remains charcoal consumer products, we continue our business transformation over the longer term into a leading developer of electric motor vehicles. We are taking a cautious approach and funding our transformation primarily through the operating cash flow of our core charcoal product sales as we maintain our competitive advantages in that business.  We view the long-term opportunities for electric motor vehicles as highly compelling in China and worldwide.  Over the short term, however, growth is likely to fluctuate as government incentives, subsidy policies and financing availability evolves.  Our goal is to develop a business that can thrive even without government subsidies, knowing that future success will require that.  We must achieve a great driver experience in a low-cost model, able to withstand typical developing market growth rate fluctuations.  While we expect the transformation process to remain challenging, we are confident we can be successful as we maintain our core business and seek new, diversified business opportunities in the electric motor vehicle market.  This strategic approach will allow us to also continue protecting the Company’s long-term mine investments and to maintain appropriate working capital levels.”

Recent Updates

Management Transition

In conjunction with the Company’s long-term transition as an electric vehicle developer, it disclosed a series of management changes on December 6, 2019 in a Form 6-K filed with the U.S. Securities and Exchange Commission.  Wangfeng Yan, was appointed Chief Executive Officer after serving as the Company’s Chief Operating Officer and in other executive roles over the past ten years at Tantech.  Mr. Yan replaces Mr. Zhengyu Wang, who will continue to serve in his role as Chairman of the Board.  Mr. Mingqin Dong, who has been responsible for developing the Company’s electric motor vehicle business, has taken over responsibilities as Chief Operating Officer from Mr. Yan.  The Company believes that the separation of executive roles is in the best interests of the Company and shareholders, and inline with corporate governance best practices, as it will enable Tantech to better leverage the respective operational and business expertise of each executive. 

Disposition of Tantech Energy

On December 14, 2017, the Company entered into a sale agreement and related agreements to transfer its Electric Double-Layer Capacitor (“EDLC”) carbon business (including intellectual property rights and equipment) to Zhejiang Apeikesi Energy Co., Ltd. After the completion of the transactions, the Company intends to focus its core business on the development of electric vehicle products. Further to the sale of EDLC carbon business, during the six months ended June 30, 2019, the Company decided to dispose all the remaining assets in Tantech Energy, one of its subsidiaries. On June 26, 2019, with the approval of the Board, the Company’s wholly-owned subsidiary Zhejiang Tantech Bamboo Tech Co., Ltd entered a share transfer agreement to sell all of its shares in its wholly-owned subsidiary Tantech Energy to an unrelated third party. The consideration is RMB 6,500,000 (approximately US$ 941,000). Pursuant to the agreement, the buyer is obligated to pay RMB 3,900,000 within 15 days after the agreement is signed, and pay the remaining RMB 2,600,000 within 15 days after the share transfer is recorded at the local industrial and commerce bureau. The shareholder’s rights and obligations were transferred after the share transfer was approved by local government in July 2019. As a result, the Company separately presented Tantech Energy as discontinued operation on its condensed consolidated financial statements as of June 30, 2019. The Company completed the disposition process in July 2019.

About Tantech Holdings Ltd.

Established in 2001 and headquartered in Lishui City, Zhejiang ProvinceChina, Tantech Holdings Ltd., together with its subsidiaries (the “Company’), 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 a marble business in 2018.

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.



Contact Information:

Ms. Nancy Wang
IR Manager
+86-578-261-2869
[email protected]








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