Tantech Announces Full Year 2020 Financial Results

LISHUI, China, April 27, 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
December 31,

($ 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,
2020



December 31,
2019


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



$

-

 

SOURCE Tantech Holdings Ltd.

For further information: For more information, please contact: Global IR Partners, David Pasquale, New York Phone: +1-914-337-8801, TANH@globalirpartners.com