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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Microvast Holdings Inc | NASDAQ:MVST | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-0.001 | -0.20% | 0.50 | 0.50 | 0.51 | 4,156 | 13:44:27 |
Microvast Holdings, Inc. (NASDAQ: MVST) (“Microvast” or the “Company”), a technology innovator that designs, develops and manufactures lithium-ion battery solutions, today announced unaudited condensed consolidated financial results for the second quarter ended June 30, 2023 (“Q2 2023”).
“In the second quarter, we delivered strong year-over-year revenue growth, led by the continued production ramp up of our commercial vehicle customers in Europe and Asia Pacific.” said Yang Wu, Microvast’s Founder, Chairman, President and Chief Executive Officer. “We are incredibly pleased to have begun shipping qualified 53.5Ah cells from our 2GWh Huzhou, China facility during the second quarter. With Huzhou now in ramp-up phase, our execution focus for the remainder of the year is to bring Clarksville into trial production in Q4.”
"The stand-out performance from the quarter is the improving gross margin and backlog setting a new record of $675.9 million,” said Craig Webster, Microvast’s Chief Financial Officer. “We anticipate further upticks in our backlog through the rest of the year supported by new energy storage and commercial vehicle projects, which would lead to very high utilization rates on our new capacity expansions.”
Results for Q2 2023
Results for Six Months Ended June 30, 2023 (“YTD 2023”)
Please refer to the tables at the end of this press release for reconciliations of gross profit to non-GAAP adjusted gross profit, and net loss to non-GAAP adjusted net loss and non-GAAP adjusted EBITDA.
2023 Outlook
Webcast Information
Company management will host a conference call and webcast to discuss the Company’s financial results on August 7, 2023, at 4:00 p.m. Central Time, to discuss the Company's financial results. The live webcast and accompanying slide presentation will be accessible from the Events & Presentations section 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 Q&A session may join the call by dialing +1 (877) 407-9208.
About Microvast
Microvast is a global leader in providing battery technologies for electric vehicles and energy storage solutions. With a legacy of over 17 years, Microvast has consistently delivered cutting-edge battery systems that empower a cleaner and more sustainable future. The company's innovative approach and dedication to excellence have positioned it as a trusted partner for customers around the world. Microvast was founded in 2006 and is headquartered in Stafford, 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 objectives, expectations and intentions with respect to future operations, products and services; and other statements identified by words such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “objective,” “plan,” “project,” “predict,” “outlook” “should,” “will,” “would,” or the negative of these terms, or other comparable terminology intended to identify statements about the future. These forward-looking statements include, but are not limited to, statements regarding our industry and market sizes, and future opportunities for us. Such forward-looking statements are based upon the current beliefs and expectations of 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.
Many factors 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, including, among others: (1) changes in the highly competitive market in which we compete, including with respect to our competitive landscape, technology evolution or regulatory changes; (2) risk that we may not be able to execute our growth strategies or achieve profitability; (3) risks of operations in China; (4) the impact of inflation; (5) changes in availability and price of raw materials; (6) changes in the markets that we target; (7) heightened awareness of environmental issues and concern about global warming and climate change; (8) risk that we are unable to secure or protect our intellectual property; (9) risk that our customers or third-party suppliers are unable to meet their obligations fully or in a timely manner; (10) risk that our customers will adjust, cancel or suspend their orders for our products; (11) risk that we will need to raise additional capital to execute our business plan, which may not be available on acceptable terms or at all; (12) risk of product liability or regulatory lawsuits or proceedings relating to our products or services; (13) economic, financial and other impacts of the coronavirus (“COVID-19”) pandemic, including global supply chain disruptions; and (14) the conflict between Russia and Ukraine and any restrictive actions that have been or may be taken by the U.S. and/or other countries in response thereto, such as sanctions or export controls. Microvast’s annual, quarterly and other filings with the U.S. Securities and Exchange Commission identify, address and discuss these and other factors in the sections entitled “Risk Factors.”
Actual results, performance or achievements may differ materially, and potentially adversely, from any 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 forward-looking statements 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, and we disclaim any intention or obligation to update any forward-looking statements as a result of developments occurring after the date hereof except as may be required under applicable securities laws. Forecasts and estimates regarding our 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.
Non-GAAP Financial Measures
To provide investors with additional information regarding our financial results, Microvast has disclosed in this earnings release non-GAAP financial measures, including non-GAAP adjusted gross profit (loss), non-GAAP adjusted EBITDA and non-GAAP adjusted net loss, which are non-GAAP financial measures as defined under the rules of the SEC. These are intended as supplemental measures of our financial performance that are not required by, or presented in accordance with U.S. generally accepted accounting principles (“GAAP”).
Reconciliations to the most comparable GAAP measures, gross profit and net income (loss), are contained in tabular form in the unaudited financial statements below. Non-GAAP adjusted gross profit is GAAP gross profit as adjusted for non-cash stock-based compensation expense included in cost of revenues. Non-GAAP adjusted net loss is GAAP net loss as adjusted for non-cash stock-based compensation expense and change in valuation of warrant liabilities. Non-GAAP adjusted net loss per common share is GAAP net loss per common share as adjusted for non-cash stock-based compensation expense and change in valuation of warrant liabilities per common share. Non-GAAP adjusted EBITDA is defined as net loss excluding depreciation and amortization, non-cash settled share-based compensation expense, interest expense, interest income, changes in fair value of our warrant liability and income tax expense or benefit.
We use non-GAAP adjusted gross profit, non-GAAP adjusted EBITDA and non-GAAP adjusted net loss for financial and operational decision-making and as a means to evaluate period-to-period comparisons. We consider them to be important measures because they help illustrate underlying trends in our business and our historical operating performance on a more consistent basis. We believe that these non-GAAP financial measures, when taken together with their most directly comparable GAAP measures, gross profit and net income (loss), provide meaningful supplemental information regarding our performance by excluding certain items that may not be indicative of our recurring core business operating results.
We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance and when planning, forecasting, and analyzing future periods. These non-GAAP financial measures also facilitate management’s internal comparisons to our historical performance. We believe these non-GAAP financial measures are useful to investors both because (1) they allow for greater transparency with respect to key metrics used by management in its financial and operational decision-making and (2) they are used by our institutional investors and the analyst community to help them analyze the health of our business. Accordingly, we believe that these non-GAAP financial measures provide useful information to investors and others in understanding and evaluating our operating results in the same manner as our management team and board of directors.
Non-GAAP financial measures have limitations as an analytical tool, and you should not consider them in isolation, or as a substitute for, financial information prepared in accordance with GAAP. For example, our calculation of non-GAAP adjusted EBITDA may differ from similarly titled non-GAAP measures, if any, reported by our peer companies, or our peer companies may use other measures to calculate their financial performance, and therefore our use of non-GAAP adjusted EBITDA may not be directly comparable to similarly titled measures of other companies. The principal limitation of non-GAAP adjusted EBITDA is that it excludes significant expenses and income that are required by GAAP to be recorded in our financial statements. In addition, it is subject to inherent limitations as it reflects the exercise of judgments by management about which expense and income are excluded or included in determining this non-GAAP financial measure. In order to compensate for these limitations, management presents non-GAAP financial measures in connection with GAAP results. In addition, such financial information is unaudited and does not conform to SEC Regulation S-X and as a result, such information may be presented differently in our future filings with the SEC. For example, with respect to the warrant liability resulting from the merger, we now exclude changes in fair value from net loss in our non-GAAP adjusted EBITDA and non-GAAP adjusted net loss calculation, which had not been done in prior periods.
MICROVAST HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)
December 31, 2022
June 30, 2023
Assets
Current assets:
Cash and cash equivalents
$
231,420
$
142,766
Restricted cash, current
70,732
27,542
Short-term investments
25,070
25,490
Accounts receivable (net of allowance for credit losses of $4,407 and $3,468 as of December 31, 2022 and June 30, 2023, respectively)
119,304
106,094
Notes receivable
2,196
17,724
Inventories, net
84,252
86,760
Prepaid expenses and other current assets
12,093
20,620
Total Current Assets
545,067
426,996
Restricted cash, non-current
465
11
Property, plant and equipment, net
335,140
497,847
Land use rights, net
12,639
11,878
Acquired intangible assets, net
1,636
3,343
Operating lease right-of-use assets
16,368
21,001
Other non-current assets
73,642
36,596
Total Assets
$
984,957
$
997,672
Liabilities
Current liabilities:
Accounts payable
$
44,985
$
54,319
Advance from customers
54,207
53,058
Accrued expenses and other current liabilities
66,720
116,449
Income tax payables
658
653
Short-term bank borrowings
17,398
18,117
Notes payable
68,441
50,114
Total Current Liabilities
252,409
292,710
Long-term bonds payable
43,888
43,888
Long-term bank borrowings
28,997
31,029
Warrant liability
126
109
Share-based compensation liability
131
170
Operating lease liabilities
14,347
18,003
Other non-current liabilities
32,082
32,046
Total Liabilities
$
371,980
$
417,955
Shareholders’ Equity
Common Stock (par value of US$0.0001 per share, 750,000,000 and 750,000,000 shares authorized as of December 31, 2022 and June 30, 2023; 309,316,011 and 309,626,443 shares issued, and 307,628,511 and 307,938,943 shares outstanding as of December 31, 2022 and June 30, 2023)
$
31
$
31
Additional paid-in capital
1,416,160
1,452,189
Statutory reserves
6,032
6,032
Accumulated deficit
(791,165
)
(846,835
)
Accumulated other comprehensive loss
(18,081
)
(33,745
)
Total Microvast Holding, Inc. shareholders’ equity
612,977
577,672
Noncontrolling interests
$
—
$
2,045
Total Equity
$
612,977
$
579,717
Total Liabilities and Equity
$
984,957
$
997,672
MICROVAST HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)
Three Months Ended June 30,
Six Months Ended June 30,
2022
2023
2022
2023
Revenues
$
64,414
$
74,953
$
101,082
$
121,926
Cost of revenues
(59,573
)
(63,492
)
(96,228
)
(105,607
)
Gross profit
4,841
11,461
4,854
16,319
Operating expenses:
General and administrative expenses
(34,335
)
(23,560
)
(60,436
)
(43,945
)
Research and development expenses
(10,244
)
(9,507
)
(21,553
)
(20,368
)
Selling and marketing expenses
(5,810
)
(5,897
)
(11,808
)
(10,885
)
Total operating expenses
(50,389
)
(38,964
)
(93,797
)
(75,198
)
Subsidy income
576
637
713
714
Loss from operations
(44,972
)
(26,866
)
(88,230
)
(58,165
)
Other income and expenses:
Interest income
420
1,518
734
2,899
Interest expense
(895
)
(487
)
(1,691
)
(946
)
Changes in fair value of warrant liability
1,255
—
820
17
Other income, net
10
(243
)
409
546
Loss before provision for income taxes
(44,182
)
(26,078
)
(87,958
)
(55,649
)
Income tax expense
—
—
—
—
Net loss
$
(44,182
)
$
(26,078
)
$
(87,958
)
$
(55,649
)
Less: net income attributable to noncontrolling interests
—
11
—
21
Net loss attributable to Microvast Holdings, Inc.'s shareholders
$
(44,182
)
$
(26,089
)
$
(87,958
)
$
(55,670
)
Net loss per common share
Basic and diluted
$
(0.15
)
$
(0.08
)
$
(0.29
)
$
(0.18
)
Weighted average shares used in calculating net loss per share of common stock
Basic and diluted
300,565,515
307,742,032
299,709,069
307,728,460
MICROVAST HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)
Six Months Ended June 30,
2022
2023
Cash flows from operating activities
Net loss
$
(87,958
)
$
(55,649
)
Adjustments to reconcile net loss to net cash used in operating activities:
Loss on disposal of property, plant and equipment
13
826
Depreciation of property, plant and equipment
10,377
9,797
Amortization of land use right and intangible assets
283
399
Noncash lease expenses
1,112
1,465
Share-based compensation
53,650
35,779
Changes in fair value of warrant liability
(820
)
(17
)
Reversal of credit losses
380
(832
)
Provision for obsolete inventories
1,919
928
Impairment loss from property, plant and equipment
493
51
Product warranty
6,235
5,450
Changes in operating assets and liabilities:
Notes receivable
(20,647
)
(19,808
)
Accounts receivable
(21,856
)
10,251
Inventories
(15,906
)
(16,610
)
Prepaid expenses and other current assets
1,689
(6,842
)
Amounts due from/to related parties
85
—
Operating lease right-of-use assets
(19,260
)
(5,850
)
Other non-current assets
111
199
Notes payable
19,237
(15,517
)
Accounts payable
808
11,771
Advance from customers
3,230
(968
)
Accrued expenses and other liabilities
(13,704
)
1,020
Operating lease liabilities
15,838
3,364
Other non-current liabilities
1,156
(215
)
Net cash used in operating activities
(63,535
)
(41,008
)
Cash flows from investing activities
Purchases of property, plant and equipment
(67,915
)
(93,630
)
Proceeds on disposal of property, plant and equipment
2
648
Purchase of short-term investments
—
(419
)
Net cash used in investing activities
(67,913
)
(93,401
)
Cash flows from financing activities
Proceeds from borrowings
13,466
9,232
Repayment of bank borrowings
(17,332
)
(3,939
)
Net cash generated from financing activities
(3,866
)
5,293
Effect of exchange rate changes
(3,863
)
(3,182
)
Decrease in cash, cash equivalents and restricted cash
(139,177
)
(132,298
)
Cash, cash equivalents and restricted cash at beginning of the period
536,109
302,617
Cash, cash equivalents and restricted cash at end of the period
$
396,932
$
170,319
MICROVAST HOLDINGS, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS-Continued
(In thousands of U.S. dollars, except share and per share data, or as otherwise noted)
Six Months Ended June 30,
2022
2023
Reconciliation to amounts on consolidated balance sheets
Cash and cash equivalents
$
333,867
$
142,766
Restricted cash
63,065
27,553
Total cash, cash equivalents and restricted cash
$
396,932
$
170,319
MICROVAST HOLDINGS, INC.
RECONCILIATION OF GROSS PROFIT TO ADJUSTED GROSS PROFIT
(Unaudited, in thousands of U.S. dollars)
Three Months Ended June 30,
Six Months Ended June 30,
2022
2023
2022
2023
Revenues
$
64,414
$
74,953
$
101,082
$
121,926
Cost of revenues
(59,573
)
(63,492
)
(96,228
)
(105,607
)
Gross profit (GAAP)
$
4,841
$
11,461
$
4,854
$
16,319
Gross margin
7.5
%
15.3
%
4.8
%
13.4
%
Non-cash settled share-based compensation (included in cost of revenues)
1,882
1,525
3,781
3,029
Adjusted gross profit (non-GAAP)
$
6,723
$
12,986
$
8,635
$
19,348
Adjusted gross margin (non-GAAP)
10.4
%
17.3
%
8.5
%
15.9
%
MICROVAST HOLDINGS, INC.
RECONCILIATION OF NET LOSS TO ADJUSTED NET LOSS
(In thousands of U.S. dollars, except per share data, or as otherwise noted)
Three Months Ended June 30,
Six Months Ended June 30,
2022
2023
2022
2023
Net loss (GAAP)
$
(44,182
)
$
(26,078
)
$
(87,958
)
$
(55,649
)
Changes in fair value of warrant liability*
(1,255
)
—
(820
)
(17
)
Non-cash settled share-based compensation*
30,523
17,819
44,780
35,740
Adjusted Net Loss (non-GAAP)
$
(14,914
)
$
(8,259
)
$
(43,998
)
$
(19,926
)
*The tax effect of the adjustments was nil.
Three Months Ended June 30,
Six Months Ended June 30,
2022
2023
2022
2023
Net loss per common share-Basic and diluted (GAAP)
$
(0.15
)
$
(0.08
)
$
(0.29
)
$
(0.18
)
Changes in fair value of warranty liability per common share
—
—
—
—
Non-cash settled share-based compensation per common share
0.10
0.06
0.15
0.12
Adjusted net loss per common share-Basic and diluted (non-GAAP)
$
(0.05
)
$
(0.02
)
$
(0.14
)
$
(0.06
)
MICROVAST HOLDINGS, INC.
RECONCILIATION OF NET LOSS TO EBITDA AND ADJUSTED EBITDA
(Unaudited, in thousands of U.S. dollars)
Three Months Ended June 30,
Six Months Ended June 30,
2022
2023
2022
2023
Net loss (GAAP)
$
(44,182
)
$
(26,078
)
$
(87,958
)
$
(55,649
)
Interest expense (income), net
475
(1,031
)
957
(1,953
)
Income tax expense
—
—
—
—
Depreciation and amortization
5,207
5,099
10,660
10,196
EBITDA (non-GAAP)
$
(38,500
)
$
(22,010
)
$
(76,341
)
$
(47,406
)
Changes in fair value of warrant liability
(1,255
)
—
(820
)
(17
)
Non-cash settled share-based compensation
30,523
17,819
44,780
35,740
Adjusted EBITDA (non-GAAP)
$
(9,232
)
$
(4,191
)
$
(32,381
)
$
(11,683
)
View source version on businesswire.com: https://www.businesswire.com/news/home/20230807198446/en/
Rodney Worthen Investor Relations ir@microvast.com
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