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Net Revenue increased by 57%
Number of vehicles sold increased 30% year over year
Management to Host Conference Call on Monday, April 25 at 5:00 p.m. ET
Cenntro Electric Group Limited (NASDAQ:CENN) (“Cenntro” or “the Company”), a leading EV technology company with advanced, market-validated electric commercial vehicles, today announced its financial results for the year ended December 31, 2021.
Full Year 2021 Operational and Financial Highlights
- The number of commercial vehicles sold was 918 units, an increase of 29.8% from 707 units sold in 2020.
- Net revenue was $8.6 million, an increase of 57.1% from $5.5 million in 2020.
- Gross margin was 17.5%, up 7.1 percentage points from 10.4% in 2020.
- Cash and cash equivalents were $261.1 million as of December 31, 2021, compared with $4.5 million as of December 31, 2020.
“2021 was a year of significant progress for Cenntro as we successfully became a publicly traded company following our stock purchase transaction with Naked Brand Group. The transaction provided Cenntro with over $250 million of cash on hand to fund capacity expansion and to support our growth initiatives,” said Peter Wang, Chief Executive Officer.
“We achieved strong operational performance in 2021, highlighted by 918 commercial electric vehicles sold, an increase of approximately 30% from the prior year. We also continue to ramp up capacity with the addition of our Jacksonville facility, and an assembly facility in Germany, and further strengthened our distribution and customer network through our strategic acquisition of a majority interest in Tropos Motors Europe GmbH,” concluded Peter Wang.
“While our 2021 operating results were negatively impacted by higher material and shipping costs and shipping container shortages and supply-chain disruptions, we are pleased to have delivered revenue and gross margin improvement driven by increased vehicle sales and other service income. Notably, our revenue grew 57% year-over-year to $8.6 million in 2021 while our gross margin increased by 7.1 percentage points to 17.5%. Our 2021 results demonstrate our ability to manage our production despite the challenges arising out of the COVID-19 pandemic. In addition to scaling production, we are supporting future revenue growth with increased sales and marketing initiatives,” added Edmond Cheng, Chief Financial Officer.
Recent Developments & 2021 Business Highlights
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Acquisition of Majority Interest of Tropos Motors Europe
In March 2022, Cenntro completed the previously announced acquisition of a 65% equity interest in Tropos Motors Europe GmbH (“TME”), a wholly owned subsidiary of Mosolf SE & Co. KG (“Mosolf”), one of Europe's largest automotive logistics and service providers. The transaction expands Cenntro's assembling capabilities in Herne, Germany, and distribution network in EMEA and brings an additional strategic customer network in Europe.
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Cenntro became a Publicly Traded Company
On Dec 31, 2021, Cenntro became a publicly traded company on the Nasdaq Capital Market (“Nasdaq”) through a stock purchase transaction with Naked Brand Group. The combined company is led by Cenntro CEO Peter Wang and Cenntro's executive team as Naked Brand Group's online business was divested. Cenntro's trading symbol on NASDAQ changed from “NAKD” to “CENN” in January 2022.
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Production Milestone of 1,623 Electric Commercial Vehicles
Cenntro achieved a production milestone of 1,623 electric commercial vehicles (“ECVs”) for 2021, with its highest volume month of 628 ECVs produced in December 2021.
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Jacksonville, Florida Selected as Location for a new U.S. Manufacturing Facility
In January 2022, Cenntro leased a new assembly facility in Jacksonville, Florida. The 100,000-square-foot facility will support U.S. production, with a possible expansion to support additional vehicles assembly and battery packing operations.
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New vehicle model development
The Company has continued to develop and introduce new vehicle models to meet market demand. Cenntro developed four new vehicle models: Neibor® 150, Logistar™ 200, Logistar™ 400, and Teemak™.
Full Year 2021 Financial Results
Net Revenues
Net revenue was $8.6 million for 2021, an increase of 57.1% from $5.5 million in 2020. The increase was primarily due to an increase in vehicle sales and an increase in service revenue.
Cost of goods sold
Cost of goods sold was $7.1 million 2021, an increase of 44.7% from $4.9 million in 2020. The increase was primarily due to an increase in the number of vehicles sold to our channel partners.
Gross profit
Gross profit was $1.5 million in 2021, an increase of 164% from $0.6 million in 2020. Gross margin was 17.5% in 2021, up 7.1 percentage points from 10.4% in 2020. The increase was primarily driven by an increase in vehicle sales, particularly an increase in sales volume of our Metro® vehicle in the US market and an increase in service revenue.
Operating expenses
Total operating expenses were $18.0 million in 2021, an increase of 60% from $11.2 million in 2020. The increase was mainly due to an increase in selling and marketing expenses due to an increase in freight costs and general and administrative expenses relating to transaction expenses in connection with Cenntro's combination with Naked Brand Group (the “Combination”) and the related Nasdaq listing and the expansion of its U.S. operations.
- Selling and marketing expenses were $1.0 million, an increase of 32.0% from $0.8 million in 2020. The increase was primarily due to an increase in freight costs related to shipping container shortages caused by COVID-19, and an increase in marketing expense in connection with our efforts to expand our product market and grow our channel partner network.
- General and administration expenses were $15.0 million, an increase of 71.5% from $8.7 million in 2020. The increase was mainly due to transaction expenses related to the Combination and the related Nasdaq listing and an increase in salaries related to the Company's expansion of administrative operations in the United States. The increase was offset by the non-recurrence of depreciation expense and share-based compensation in 2021.
- Research and development expenses were $1.5 million, an increase of 8.3% from $1.4 million in 2020. The increase was mainly due to increases in design and development expenses and salary expenses offset by a decrease in share-based compensation in 2021.
Net income (loss)
Net loss was $16.4 million, compared with net loss of $5.2 million in 2020.
Adjusted EBITDA1
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1 |
Represents a non-GAAP financial measure. For additional information about non-GAAP measures, including, where applicable, reconciliations to the most directly comparable financial measures presented in accordance with U.S. GAAP, please see “Non-GAAP Measures” below. |
Adjusted EBITDA was $(7.0) million in 2021, compared with Adjusted EBITDA of ($5.6) million in 2020.
Cash, cash equivalents and restricted cash balances
Cash and cash equivalents were $261.1 million as of December 31, 2021, compared with $4.5 million as of December 31, 2020.
Full Year 2021 Results Conference Call
Cenntro Electric Group CEO Peter Wang, and CFO Edmond Cheng will host the conference call followed by a question-and-answer period.
Please register in advance of the conference call using the link provided below. Conference access information will be provided upon registration. Participant Online Registration: http://apac.directeventreg.com/registration/event/6057659
The conference call will be broadcast live and available for replay at https://edge.media-server.com/mmc/p/wfm3z4ky and via the investor relations section of the Company's website at ir.cenntroauto.com. A replay of the conference call will be available after 8:00 p.m. Eastern time through May 4, 2022.
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Toll-free replay number |
1-646-254-3697 |
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International replay number |
+61 2 8199-0299 |
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Hong Kong |
+852 800963117 |
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Mainland China |
+86 4008209035 or +86 8009880552 |
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Replay ID |
6057659 |
About Cenntro Electric Group Ltd.
Cenntro Electric Group Ltd. (or “Cenntro”) (NASDAQ:CENN) is a leading designer and manufacturer of electric light and medium-duty commercial vehicles. Cenntro's purpose-built ECVs are designed to serve a variety of organizations in support of city services, last-mile delivery and other commercial applications. Cenntro plans to lead the transformation in the automotive industry through scalable, decentralized production, and smart driving solutions empowered by the Cenntro iChassis. As of December 31, 2021, Cenntro has sold or put into service more than 3,700 vehicles in over 25 countries across North America, Europe and Asia. For more information, please visit Cenntro's website at: http://www.cenntroauto.com.
Forward-Looking Statements
This communication contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements include all statements that are not historical facts. Such statements may be, but need not be, identified by words such as "may,'' "believe,'' "anticipate,'' "could,'' "should,'' "intend,'' "plan,'' "will,'' "aim(s),'' "can,'' "would,'' "expect(s),'' "estimate(s),'' "project(s),'' "forecast(s)'', "positioned,'' "potential,'' "goal,'' "strategy,'' "outlook'' and similar expressions. Examples of forward-looking statements include, among other things, statements regarding assembly and distribution capabilities, decentralized production and fully digitalized autonomous driving solutions. All such forward-looking statements are based on management's current beliefs, expectations and assumptions, and are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the results expressed or implied in this communication. Among the key factors that could cause actual results to differ materially from those expressed or implied in the forward-looking statements are the following: our limited operating history and historical losses from operations; our ability to develop and manufacture ECVs of sufficient quality, on schedule and on a large scale is still evolving; our ability to introduce new models; potential delays in launching and ramping up production of our new ECV models; our reliance on our channel partners to market, sell and service (and in certain cases, assemble and/or homologate) our vehicles; the impacts of the COVID-19 pandemic on our operating results, in particular due to the increase in shipping costs and shortages of shipping containers and raw materials; our reliance on third party manufacturing partners and suppliers for substantially all of our vehicle kits and components, respectively, for our new vehicles; our material weakness in our internal control over financial reporting; risks associated with our global operations and expansion, including unfavorable regulatory, political, legal, economic, tax and labor conditions; changes in China's economic, political or social conditions or government policies, which could have a material adverse effect on our business; and changes in U.S. and international trade policies, particularly with regard to China. For additional risks and uncertainties that could impact Cenntro's forward-looking statements, please see disclosures contained in Cenntro's public filings with the SEC, including "Risk Factors" in Cenntro's Report of Foreign Private Issuer on Form 6-K filed with the Securities and Exchange Commission on January 5, 2022 and which may be viewed at www.sec.gov.
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CENNTRO ELECTRIC GROUP LIMITED CONSOLIDATED AND COMBINED BALANCE SHEETS (Expressed in U.S. dollars, except for the number of shares) |
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December 31, 2021 |
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December 31, 2020 |
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Consolidated |
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Combined |
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ASSETS |
|
|
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|||
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Current assets: |
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|
|
|
|
|||
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Cash and cash equivalents |
$ |
261,069,414 |
|
|
$ |
4,549,034 |
|
|
|
Restricted cash |
|
595,548 |
|
|
|
– |
|
|
|
Accounts receivable, net |
|
2,047,560 |
|
|
|
463,333 |
|
|
|
Inventories |
|
8,139,816 |
|
|
|
4,207,990 |
|
|
|
Prepayment and other current assets, net |
|
7,989,607 |
|
|
|
2,087,756 |
|
|
|
Receivable from disposal of land use rights and properties |
|
– |
|
|
|
7,724,138 |
|
|
|
Amounts due from related parties – current |
|
1,232,634 |
|
|
|
1,101,144 |
|
|
|
Total current assets |
|
281,074,579 |
|
|
|
20,133,395 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-current assets: |
|
|
|
|
|
|
|
|
|
Equity investments |
|
329,197 |
|
|
|
– |
|
|
|
Plants and equipment, net |
|
1,301,226 |
|
|
|
1,039,191 |
|
|
|
Intangible assets, net |
|
3,313 |
|
|
|
45,430 |
|
|
|
Right-of-use assets, net |
|
1,669,381 |
|
|
|
423,304 |
|
|
|
Amount due from related parties – non-current |
|
4,834,973 |
|
|
|
– |
|
|
|
Other non-current assets, net |
|
2,151,700 |
|
|
|
1,117,648 |
|
|
|
Total non-current assets |
|
10,289,790 |
|
|
|
2,625,573 |
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|
|
|
|
|
|
|
|
|
|
|
|
Total Assets |
$ |
291,364,369 |
|
|
$ |
22,758,968 |
|
|
|
|
|
|
|
|
|
|
|
|
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LIABILITIES AND EQUITY |
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|
|
|
|
|
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|
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|
|
|
|
|
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|
LIABILITIES |
|
|
|
|
|
|
|
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Current liabilities: |
|
|
|
|
|
|
|
|
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Accounts payable |
$ |
3,678,823 |
|
|
$ |
3,722,686 |
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|
|
Accrued expenses and other current liabilities |
|
4,183,263 |
|
|
|
5,743,323 |
|
|
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Contractual liabilities |
|
1,943,623 |
|
|
|
1,690,837 |
|
|
|
Operating lease liabilities, current |
|
839,330 |
|
|
|
131,014 |
|
|
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Amounts due to related parties |
|
15,756,028 |
|
|
|
3,248,777 |
|
|
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Total current liabilities |
|
26,401,067 |
|
|
|
14,536,637 |
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|
|
|
|
|
|
|
|
|
|
|
|
Other non-current liabilities |
|
700,000 |
|
|
|
– |
|
|
|
Operating lease liabilities, non-current |
|
489,997 |
|
|
|
356,143 |
|
|
|
Total Liabilities |
$ |
27,591,064 |
|
|
$ |
14,892,780 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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EQUITY |
|
|
|
|
|
|
|
|
|
Ordinary shares (No par value; 174,853,546 and 261,256,254 shares issued and outstanding as of December 31, 2020 and 2021) |
|
– |
|
|
|
– |
|
|
|
Additional paid in capital |
|
374,901,939 |
|
|
|
103,113,793 |
|
|
|
Accumulated deficit |
|
(109,735,935 |
) |
|
|
(93,314,128 |
) |
|
|
Accumulated other comprehensive loss |
|
(1,392,699 |
) |
|
|
(1,904,839 |
) |
|
|
Total equity attributable to shareholders |
|
263,773,305 |
|
|
|
7,894,826 |
|
|
|
Non-controlling interests |
|
– |
|
|
|
(28,638 |
) |
|
|
Total Equity |
|
263,773,305 |
|
|
|
7,866,188 |
|
|
|
Total Liabilities and Equity |
$ |
291,364,369 |
|
|
$ |
22,758,968 |
|
|
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CENNTRO ELECTRIC GROUP LIMITED COMBINED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (Expressed in U.S. dollars, except for number of shares) |
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For the Years Ended December 31, |
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|
|
|
|
2021 |
|
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2020 |
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2019 |
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|
|
|
|
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|
|
|
|
|
|
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Net revenues |
|
|
$ |
8,576,832 |
|
|
|
$ |
5,460,003 |
|
|
|
$ |
3,575,887 |
|
|
|
Cost of goods sold |
|
|
|
(7,073,391 |
) |
|
|
|
(4,889,850 |
) |
|
|
|
(3,699,741 |
) |
|
|
Gross profit/(loss) |
|
|
|
1,503,441 |
|
|
|
|
570,153 |
|
|
|
|
(123,854 |
) |
|
|
|
|
|
|
|
|
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|
|
|
|
|
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OPERATING EXPENSES: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|||
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Selling and marketing expenses |
|
|
|
(1,034,242 |
) |
|
|
|
(783,763 |
) |
|
|
|
(964,471 |
) |
|
|
General and administrative expenses |
|
|
|
(14,978,897 |
) |
|
|
|
(8,735,534 |
) |
|
|
|
(10,959,203 |
) |
|
|
Research and development expenses |
|
|
|
(1,478,256 |
) |
|
|
|
(1,365,380 |
) |
|
|
|
(2,145,884 |
) |
|
|
Provision for doubtful accounts |
|
|
|
(469,702 |
) |
|
|
|
(319,816 |
) |
|
|
|
(3,598,506 |
) |
|
|
Total operating expenses |
|
|
|
(17,961,097 |
) |
|
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Full story available on Benzinga.com
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