– Revenue Growth of 20% over Q3 2020 –
– Reaffirms 2021 Revenue Outlook –
– Completed Public Listing in July 2021, Raised $708 million in Net Proceeds –
Microvast Holdings, Inc. (NASDAQ:MVST) (“Microvast” or the “Company”), a technology innovator that designs, develops and manufactures lithium-ion battery solutions, today announced consolidated financial results for the third quarter ended September 30, 2021 (“Q3 2021”). During Q3 2021, Microvast successfully completed a business combination with Tuscan Holdings Corp. (the “business combination”) on July 23, 2021.
“As an established battery technology company with proven products and a robust pipeline of new technologies, we are excited by the industry demand and validation of our battery solutions. I am pleased to report that we have won several new multi-year contracts with leading OEMs, driving substantial growth in forecasted contracted revenue since the business combination was announced in February 2021. Furthermore, as part of our continuing mission to develop disruptive battery technology and advance a greener, more electric future, we expect to announce two new products in the first quarter of 2022. These products will complement our existing portfolio of battery solutions with industry leading charging times, extended life cycles, and enhanced safety performance,” said Yang Wu, Microvast’s President and Chief Executive Officer.
“The successful business combination was an important milestone, accelerating our ability to develop and commercialize disruptive battery technologies that we believe will revolutionize transportation. Localized production near our current and prospective customers across Europe and North America will be crucial to our success and our capacity expansion plans remain on track following the business combination. While we have continued to face multiple challenges on macroeconomic and industry levels, we remain excited by the overall industry outlook and the opportunities for our battery solutions,” Mr. Wu added.
Results for Q3 2021
Revenue was $36.9 million for Q3 2021, compared to $30.8 million for the quarter ended September 30, 2020 (“Q3 2020”), an increase of 20%, driven by the increase in sales of battery products to new and existing customers.
Gross loss was $35.9 million in Q3 2021, compared to gross profit of $3.7 million in Q3 2020. The change was largely due to a $34.1 million one-time product warranty accrual and a $6.6 million inventory write-down (both primarily related to certain legacy products), increased raw material prices and a $2.3 million share-based compensation expense accrued following the business combination.
Operating expenses in Q3 2021 were $78.0 million compared to $12.7 million in Q3 2020. The change in operating expenses was largely due to a $56.0 million share-based compensation expense accrued following the business combination as well as increased headcount to support the Company’s planned growth initiatives and other expenses related to operating as a public company.
Net loss was $116.5 million in Q3 2021 compared to net loss of $10.1 million in Q3 2020. The change was primarily due to the reduction in gross profit and higher operating expenses as described above.
As a result of the successful business combination, Microvast ended Q3 2021 with approximately $612.5 million in cash, cash equivalents and restricted cash.
The Company’s backlog on September 30, 2021 was $52.7 million.
Full Year 2021 Outlook
Based on current business conditions, business trends and other factors, Microvast is reaffirming its previous revenue outlook, and expects revenue for the year ending December 31, 2021 to be in the range of $145 million to $155 million.
Based on equipment delivery schedules and scheduling during the upcoming holiday season, the Company expects some of its previously planned 2021 capital expenditures to move into early 2022. Total capital expenditures for the year ending December 31, 2021 are now expected to be in the range of $120 million to $150 million.
Webcast Information
Company management will host a webcast on November 15, 2021, at 5:00 p.m. Central Time, to discuss the Company's financial results. The webcast will be accessible from the Events & Presentations tab of Microvast’s investor relations website (https://ir.microvast.com/events-presentations/events). A replay will be available following the conclusion of the event. Investment community professionals interested in participating in the live Q&A session may join the call by dialing +1 (631) 891-4304.
About Microvast
Microvast is a technology innovator that designs, develops and manufactures lithium-ion battery solutions. Microvast is renowned for its cutting-edge cell technology and its vertical integration capabilities which extend from core battery chemistry (cathode, anode, electrolyte, and separator) to modules and packs. By integrating the process from raw material to system assembly, Microvast has developed a family of products covering a breadth of market applications, including electric vehicles, energy storage and battery components. Microvast was founded in 2006 and is headquartered near Houston, Texas. For more information, please visit www.microvast.com or follow us on LinkedIn or Twitter (@microvast).
Cautionary Statement Regarding Forward-Looking Statements
This communication contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about future financial and operating results, our plans, objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “will likely result,” “are expected to,” “will continue,” “is anticipated,” “estimated,” “believe,” “intend,” “plan,” “projection,” “guidance,” “outlook” or words of similar meaning. These forward-looking statements include, but are not limited to, statements regarding Microvast’s industry and market sizes, future opportunities for Microvast and Microvast’s estimated future results. Such forward-looking statements are based upon the current beliefs and expectations of our management and are inherently subject to significant business, economic and competitive uncertainties and contingencies, many of which are difficult to predict and generally beyond our control. Actual results and the timing of events may differ materially from the results anticipated in these forward-looking statements.
In addition to factors identified elsewhere in this communication, the following factors, among others, could cause actual results and the timing of events to differ materially from the anticipated results or other expectations expressed in the forward-looking statements: (1) a delay or failure to realize the expected benefits from the business combination; (2) the impact of the ongoing COVID-19 pandemic; (3) changes in the highly competitive market in which Microvast competes, including with respect to its hiring abilities, competitive landscape, technology evolution or regulatory changes; (4) changes in the markets that Microvast targets; (5) risk that Microvast may not be able to execute its growth strategies or achieve profitability; (6) the risk that Microvast is unable to secure or protect its intellectual property; (7) the risk that Microvast’s customers or third-party suppliers are unable to meet their obligations fully or in a timely manner; (8) the risk that Microvast’s customers will adjust, cancel, or suspend their orders for Microvast’s products; (9) the risk that Microvast will need to raise additional capital to execute its business plan, which may not be available on acceptable terms or at all; (10) the risk of product liability or regulatory lawsuits or proceedings relating to Microvast’s products or services; (11) the risk that Microvast may not be able to develop and maintain effective internal controls; (12) the outcome of any legal proceedings that may be instituted against Microvast or any of its directors or officers; and (13) risks of operations in the People’s Republic of China.
Actual results, performance or achievements may differ materially, and potentially adversely, from any projections and forward-looking statements and the assumptions on which those forward-looking statements are based. There can be no assurance that the data contained herein is reflective of future performance to any degree. You are cautioned not to place undue reliance on forward-looking statements as a predictor of future performance as projected financial information and other information are based on estimates and assumptions that are inherently subject to various significant risks, uncertainties and other factors, many of which are beyond our control. All information set forth herein speaks only as of the date hereof in the case of information about Microvast or the date of such information in the case of information from persons other than Microvast, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this communication. Forecasts and estimates regarding Microvast’s industry and end markets are based on sources we believe to be reliable, however there can be no assurance these forecasts and estimates will prove accurate in whole or in part.
MICROVAST HOLDINGS, INC. |
||||||||
SELECTED UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||||
(In thousands of U.S. dollars) |
||||||||
|
|
December 31,
|
|
|
September 30,
|
|
||
Assets |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
21,496 |
|
|
$ |
572,609 |
|
Restricted cash |
|
|
19,700 |
|
|
|
39,900 |
|
Accounts receivable (net of allowance for doubtful accounts of $5,047 and $4,796 as of December 31, 2020 and September 30, 2021, respectively) |
|
|
76,298 |
|
|
|
67,243 |
|
Notes receivable |
|
|
20,839 |
|
|
|
10,260 |
|
Inventories, net |
|
|
44,968 |
|
|
|
47,820 |
|
Prepaid expenses and other current assets |
|
|
6,022 |
|
|
|
12,964 |
|
Amount due from related parties |
|
|
- |
|
|
|
128 |
|
Total Current Assets |
|
|
189,323 |
|
|
|
750,924 |
|
Property, plant and equipment, net |
|
|
198,017 |
|
|
|
222,771 |
|
Land use rights, net |
|
|
14,001 |
|
|
|
13,935 |
|
Acquired intangible assets, net |
|
|
2,279 |
|
|
|
2,024 |
|
Other non-current assets |
|
|
890 |
|
|
|
702 |
|
Total Assets |
|
$ |
404,510 |
|
|
$ |
990,356 |
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
42,007 |
|
|
$ |
36,557 |
|
Advance from customers |
|
|
2,446 |
|
|
|
2,343 |
|
Accrued expenses and other current liabilities |
|
|
60,628 |
|
|
|
48,065 |
|
Income tax payables |
|
|
664 |
|
|
|
665 |
|
Short-term bank borrowings |
|
|
12,184 |
|
|
|
22,851 |
|
Notes payable |
|
|
35,782 |
|
|
|
43,131 |
|
Bonds payable |
|
|
29,915 |
|
|
|
- |
|
Total Current Liabilities |
|
|
183,626 |
|
|
|
153,612 |
|
Deposit liability for series B2 convertible preferred shares (“Series B2 Preferred”) |
|
|
21,792 |
|
|
|
- |
|
Long-term bonds payable |
|
|
73,147 |
|
|
|
73,147 |
|
Warrant liability |
|
|
- |
|
|
|
2,461 |
|
Share-based compensation liability |
|
|
- |
|
|
|
8,841 |
|
Other non-current liabilities |
|
|
110,597 |
|
|
|
35,511 |
|
Total Liabilities |
|
$ |
389,162 |
|
|
$ |
273,572 |
|
Total Mezzanine Equity |
|
$ |
399,950 |
|
|
$ |
- |
|
Total Shareholders’ (Deficit)/Equity |
|
|
(384,602 |
) |
|
|
716,784 |
|
Total Liabilities, Mezzanine Equity and Shareholders’ Equity |
|
$ |
404,510 |
|
|
$ |
990,356 |
|
MICROVAST HOLDINGS, INC. |
||||||||||||||||
SELECTED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
(In thousands of U.S. dollars, except share and per share data) |
||||||||||||||||
|
|
Three Months Ended
|
|
|
Nine Months Ended
|
|
||||||||||
|
|
2020 |
|
|
2021 |
|
|
2020 |
|
|
2021 |
|
||||
Revenues |
|
$ |
30,753 |
|
|
$ |
36,894 |
|
|
$ |
59,400 |
|
|
$ |
85,204 |
|
Cost of revenues |
|
|
(27,075 |
) |
|
|
(72,779 |
) |
|
|
(50,950 |
) |
|
|
(129,100 |
) |
Gross profit/(loss) |
|
|
3,678 |
|
|
|
(35,885 |
) |
|
|
8,450 |
|
|
|
(43,896 |
) |
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
General and administrative expenses |
|
|
(4,721 |
) |
|
|
(57,058 |
) |
|
|
(12,670 |
) |
|
|
(67,810 |
) |
Research and development expenses |
|
|
(4,558 |
) |
|
|
(13,518 |
) |
|
|
(12,518 |
) |
|
|
(23,199 |
) |
Selling and marketing expenses |
|
|
(3,456 |
) |
|
|
(7,380 |
) |
|
|
(9,464 |
) |
|
|
(14,242 |
) |
Total operating expenses |
|
|
(12,735 |
) |
|
|
(77,956 |
) |
|
|
(34,652 |
) |
|
|
(105,251 |
) |
Subsidy income |
|
|
(39 |
) |
|
|
545 |
|
|
|
802 |
|
|
|
2,676 |
|
Loss from operations |
|
|
(9,096 |
) |
|
|
(113,296 |
) |
|
|
(25,400 |
) |
|
|
(146,471 |
) |
Other income and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
66 |
|
|
|
97 |
|
|
|
502 |
|
|
|
304 |
|
Interest expense |
|
|
(1,397 |
) |
|
|
(1,247 |
) |
|
|
(4,234 |
) |
|
|
(4,630 |
) |
Loss on changes in fair value of convertible notes |
|
|
- |
|
|
|
(3,018 |
) |
|
|
- |
|
|
|
(9,861 |
) |
Gain on change in fair value of warrant liability |
|
|
- |
|
|
|
1,113 |
|
|
|
- |
|
|
|
1,113 |
|
Other income (expense), net |
|
|
68 |
|
|
|
(19 |
) |
|
|
63 |
|
|
|
25 |
|
Loss before provision for income taxes |
|
|
(10,359 |
) |
|
|
(116,370 |
) |
|
|
(29,069 |
) |
|
|
(159,520 |
) |
Income tax benefit (expense) |
|
|
270 |
|
|
|
(106 |
) |
|
|
(5 |
) |
|
|
(324 |
) |
Net loss |
|
$ |
(10,089 |
) |
|
$ |
(116,476 |
) |
|
$ |
(29,074 |
) |
|
$ |
(159,844 |
) |
Less: Accretion of Series C1 Preferred |
|
|
975 |
|
|
|
251 |
|
|
|
2,923 |
|
|
|
2,257 |
|
Less: Accretion of Series C2 Preferred |
|
|
2,216 |
|
|
|
570 |
|
|
|
6,650 |
|
|
|
5,132 |
|
Less: Accretion of Series D1 Preferred |
|
|
4,662 |
|
|
|
1,190 |
|
|
|
13,986 |
|
|
|
10,708 |
|
Less: Accretion for noncontrolling interests |
|
|
4,002 |
|
|
|
1,516 |
|
|
|
11,924 |
|
|
|
9,523 |
|
Net loss attributable to ordinary shareholders of Microvast Holdings, Inc. |
|
$ |
(21,944 |
) |
|
$ |
(120,003 |
) |
|
$ |
(64,557 |
) |
|
$ |
(187,464 |
) |
Net loss per share attributable to ordinary shareholders of Microvast Holdings, Inc. |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
$ |
(0.22 |
) |
|
$ |
(0.49 |
) |
|
$ |
(0.65 |
) |
|
$ |
(1.27 |
) |
Weighted average shares used in calculating net loss per ordinary share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
99,028,297 |
|
|
|
243,861,780 |
|
|
|
99,028,297 |
|
|
|
147,836,650 |
|
MICROVAST HOLDINGS, INC. |
||||||||
SELECTED UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS |
||||||||
(In thousands of U.S. dollars) |
||||||||
|
|
Nine Months Ended
|
||||||
|
|
2020 |
|
|
2021 |
|
||
Cash flows from operating activities |
|
|
|
|
|
|||
Net loss |
|
$ |
(29,074 |
) |
|
$ |
(159,844 |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
|
|
Loss on disposal of property, plant and equipment |
|
|
205 |
|
|
|
6 |
|
Depreciation of property, plant and equipment |
|
|
11,384 |
|
|
|
14,398 |
|
Amortization of land use right and intangible assets |
|
|
529 |
|
|
|
499 |
|
Share-based compensation |
|
|
- |
|
|
|
58,290 |
|
Changes in fair value of warrant liability |
|
|
- |
|
|
|
(1,113 |
) |
Changes in fair value of convertible notes |
|
|
- |
|
|
|
9,861 |
|
(Reversal) allowance of doubtful accounts |
|
|
(861 |
) |
|
|
261 |
|
Provision for obsolete inventories |
|
|
1,326 |
|
|
|
12,667 |
|
Impairment loss from property, plant and equipment |
|
|
645 |
|
|
|
867 |
|
Product warranty |
|
|
2,468 |
|
|
|
44,610 |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Notes receivable |
|
|
10,630 |
|
|
|
10,782 |
|
Accounts receivable |
|
|
11,782 |
|
|
|
9,425 |
|
Inventories |
|
|
6,021 |
|
|
|
(15,127 |
) |
Prepaid expenses and other current assets |
|
|
(625 |
) |
|
|
(6,874 |
) |
Amount due from/to related parties |
|
|
1,859 |
|
|
|
(128 |
) |
Other non-current assets |
|
|
(154 |
) |
|
|
52 |
|
Notes payable |
|
|
(8,612 |
) |
|
|
6,868 |
|
Accounts payable |
|
|
(2,545 |
) |
|
|
(5,944 |
) |
Advance from customers |
|
|
(1,165 |
) |
|
|
(130 |
) |
Accrued expenses and other liabilities |
|
|
1,981 |
|
|
|
(6,371 |
) |
Other non-current liabilities |
|
|
- |
|
|
|
2,292 |
|
Income tax payables |
|
|
5 |
|
|
|
- |
|
Net cash generated from/(used in) operating activities |
|
|
5,799 |
|
|
|
(24,653 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(15,375 |
) |
|
|
(40,718 |
) |
Proceeds on disposal of property, plant and equipment |
|
|
6 |
|
|
|
- |
|
Purchase of short-term investments |
|
|
(2,002 |
) |
|
|
- |
|
Proceeds from maturity of short-term investments |
|
|
2,946 |
|
|
|
- |
|
Net cash used in investing activities |
|
|
(14,425 |
) |
|
|
(40,718 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from borrowings |
|
|
15,230 |
|
|
|
26,603 |
|
Repayment of bank borrowings |
|
|
(17,590 |
) |
|
|
(15,665 |
) |
Loans borrowing from related parties |
|
|
18,063 |
|
|
|
8,426 |
|
Repayment of related party loans |
|
|
(18,063 |
) |
|
|
(8,426 |
) |
Merger and Private Investment in Public Equity (“PIPE”) financing |
|
|
- |
|
|
|
747,791 |
|
Payment for transaction fee in connection with the merger transaction |
|
|
- |
|
|
|
(42,821 |
) |
Repurchase shares from exited noncontrolling interests |
|
|
- |
|
|
|
(139,038 |
) |
Issuance of convertible notes |
|
|
- |
|
|
|
57,500 |
|
Net cash (used in)/generated from financing activities |
|
|
(2,360 |
) |
|
|
634,370 |
|
Effect of exchange rate changes |
|
|
534 |
|
|
|
2,314 |
|
(Decrease) Increase in cash, cash equivalents and restricted cash |
|
|
(10,452 |
) |
|
|
571,313 |
|
Cash, cash equivalents and restricted cash at beginning of the period |
|
|
41,784 |
|
|
|
41,196 |
|
Cash, cash equivalents and restricted cash at end of the period |
|
$ |
31,332 |
|
|
$ |
612,509 |
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20211115006225/en/
Contacts
Sarah Alexander
ir@microvast.com
(346) 309-2562
