Cenntro Inc. (NASDAQ: CENN) (“Cenntro” or “the Company”),
a pioneering electric commercial vehicle company with advanced,
market-validated, and purpose-built vehicles, has reported its
financial and operational results for the third quarter ended
September 30, 2024.
Third Quarter 2024 Financial and Operational
Highlights:
- Third quarter 2024 net revenue of $16.7 million increased 190%
compared to $5.8 million for the third quarter of 2023.
- United States (“US”) sales volume increased to $10.3 million in
the third quarter of 2024 from $0.2 million for the third quarter
of 2023.
- Adjusted EBITDA loss for the third quarter of 2024 of $7.5
million compared to a loss of $12.1 million for the third quarter
of 2023.
- Sold 662 Electric Commercial Vehicles in the third quarter of
2024.
- Sold 78 Logistar™ 400 Class 4 vehicles in the US market
compared to 1 vehicle in the third quarter of 2023.
- Sold 334 Avantier™ vehicles in Europe and South American
markets in the third quarter of 2024 compared to 21 vehicles in the
third quarter of 2023.
- Sold 230 iChassis kits in the third quarter of 2024 compared to
103 kits in the third quarter of 2023.
Peter Wang, Chief Executive Officer illustrated: “In the third
quarter of 2024, we continued our steady growth in the US market,
selling and delivering Cenntro products as we positioned the
Company for a longer-term profitable future. During the third
quarter, we sold a total of 662 vehicles across our portfolio,
compared to 298 vehicles in the prior year period. Additionally, we
sold 230 units of our iChassis in the third quarter, although these
units are not inclusive of the number of vehicles sold because
iChassis is not considered a complete vehicle. We expect a
significant revenue increase in the US market as we continue to
shift our strategy to focus towards North American sales, and
introduction of additional new models in the US market.
“For new models during the quarter, we announced our newest
Class 4 addition to our Logistar series, the Logistar® 450
(“LS450”) model for sale and distribution in the US and global
markets. The new LS450 has received California Air Resources Board
Executive Order (“CARB”) Certification and a Certificate of
Conformity from the US Environmental Protection Agency (“EPA”). The
LS450 is equipped with a 128Kwh battery capacity, offering an
improved range compared to its predecessor model, the LS400. We
also obtained a CARB Executive Order and a Certificate of
Conformity from the EPA for the Logistar® 300 model, a Class 3
delivery truck. We introduced the Deepstar® 864 (“DS864”), a Class
8 drayage truck in October 2024, at our ‘Cenntro Day 2024’ at the
Ontario Convention Center in Ontario, California. Lastly, we
recently announced that Avantier Motors Corporation, our wholly
owned subsidiary, launched two new electric vehicle models tailored
for the European market following the strong reception of the
Avantier C; the Avantier Ex, a mini electric commercial vehicle,
and the Avantier Commuter, an entry-level electric passenger car.
Both models join Avantier’s existing product line as the company
continues its mission to revolutionize urban mobility through
innovative, sustainable electric vehicles.
“At our California-based electric commercial vehicles (“ECVs”)
production and distribution assembly facility in Ontario, CA, we
are now producing the Metro, LS400, LS450 and LS300, with
full-scale production capabilities for these and future models. As
of October 2024, the facility has assembled and delivered over 150
vehicles to customers in the North American west coast. With the
ramp-up of this facility, we are increasing vehicle delivery
efficiency as we continue to expand sales in North America’s west
coast market.
“Looking ahead, we are diligently working to diversify our
portfolio and develop new vehicle models that align with market
demands, and keep pace with new regulations, technologies and
features. We are focused on expanding our geographic footprint for
production, distribution, and service infrastructure, especially in
the US market. Taken together, we believe our strategy is
positioning us to become a significant presence in commercial EV
sales and production,” concluded Mr. Wang.
Third Quarter 2024 Financial Results
Net Revenue
Net revenues for the three months ended September 30, 2024 were
approximately $16.7 million, an increase of 190% from approximately
$5.8 million for the three months ended September 30, 2023. The
increase was primarily due to an increase in vehicle sales, spare
parts sales, and sales of iChassis.
Gross Profit
Gross Profit for the three months ended September 30, 2024 was
approximately $4.0 million, an increase of approximately $3.3
million from approximately $0.7 million of gross profit for the
three months ended September 30, 2023. For the three months ended
September 30, 2024 and 2023, our overall gross margin was
approximately 24.2% and 12.4%, respectively. Our gross margin of
vehicle sales for the three months ended September 30, 2024 and
2023 was 23.5% and 15.7%, respectively. The increase of our overall
gross profit was mainly caused by an increase in the gross profit
of our vehicle sales and spare-part sales of approximately $6.8
million and $0.5 million, respectively, offset by the increase in
the inventory write-down of approximately $4.0 million.
Operating Expenses
Total operating expenses were approximately $14.4 million in the
third quarter of 2024, compared to $13.3 million in the third
quarter of 2023.
Selling and marketing expenses for the three months ended
September 30, 2024, were approximately $5.0 million, an increase of
approximately $2.4 million or approximately 91.4% from
approximately $2.6 million for the three months ended September 30,
2023. The increase in selling and marketing expenses was primarily
attributed to the increase in marketing expenses and marketing
related professional fee of approximately $2.3 million and $0.3
million, respectively, offset by a decrease in freight of
approximately $0.2 million.
General and administrative expenses for the three months ended
September 30, 2024 were approximately $7.9 million, a decrease of
approximately $1.1 million or approximately 12.5% from
approximately $9.1 million for the three months ended September 30,
2023. The decrease in general and administrative expenses in 2024
was primarily attributed to a decrease in share-based compensation,
legal and professional fee and salary, lease ROU amortization and
social insurance of $1.1 million, $0.6 million, $0.1 million and
$0.2 million, respectively, offset by the increase in leasehold
improvement depreciation, rental expense and others of
approximately $0.3 million, $0.2 million and $0.4 million,
respectively, the increase in others was mainly caused by the
increase in fees related to garage liability insurance.
Research and development expenses for the three months ended
September 30, 2024 were approximately $1.5 million, a decrease of
approximately $0.2 million or approximately 9.7% from approximately
$1.6 million for the three months ended September 30, 2023. The
decrease in research and development expenses in 2024 was primarily
attributed to the decrease in design and development expenditures,
share-based compensations and others of approximately $0.06
million, $0.09 million and $0.06 million, respectively.
Net Loss
Net loss was approximately $9.0 million in the third quarter of
2024, compared with net loss of $16.1 million in the third quarter
of 2023.
Adjusted EBITDA
Adjusted EBITDA was approximately ($7.5) million in the third
quarter of 2024, compared with Adjusted EBITDA of ($12.1) million
in the third quarter of 2023.
Nine Months 2024 Financial Results
Net Revenue
Net revenues for the nine months ended September 30, 2024 were
approximately $28.4 million, an increase of approximately $15.0
million or 111.2% from approximately $13.5 million for the nine
months ended September 30, 2023. The increase was primarily due to
an increase in vehicle sales, spare parts sales, and sales of
iChassis.
Gross Profit
Gross Profit for the nine months ended September 30, 2024 was
approximately $5.3 million, an increase of approximately $3.2
million from approximately $2.1 million of gross loss for the nine
months ended September 30, 2023. For the nine months ended
September 30, 2024 and 2023, our overall gross margin was
approximately 18.6% and 15.3%, respectively. Our gross margin of
vehicle sales for the nine months ended September 30, 2024 and 2023
was 19.2% and 16.3%, respectively. The increase of our overall
gross profit was mainly caused by an increase in the gross profit
of our vehicle sales and spare-part sales of approximately $8.5
million and $0.4 million, respectively, offset by the increase in
the inventory write-down of approximately $5.7 million.
Operating Expenses
Total operating expenses were approximately $33.9 million for
the nine months ended September 30, 2024, compared with $38.3
million in the nine months ended September 30, 2023.
Selling and marketing expenses for the nine months ended
September 30, 2024 were approximately $7.7 million, an increase of
approximately $0.4 million or approximately 5.7% from approximately
$7.2 million for the nine months ended September 30, 2023. The
increase in selling and marketing expenses in 2024 was primarily
attributed to the increase in marketing expenses and marketing
related professional fee of approximately $1.7 million and $0.7
million, respectively, offset by the decrease in salary expense,
freight and share-based compensations of approximately $1.0
million, $0.6 million and $0.4 million, respectively.
General and administrative expenses for the nine months ended
September 30, 2024 were approximately $21.9 million, a decrease of
approximately $3.8 million or approximately 14.7% from
approximately $25.7 million for the nine months ended September 30,
2023. The decrease in general and administrative expenses in 2024
was primarily attributed to a decrease in legal and professional
fees, office expenses and share-based compensations of
approximately $2.1 million, $1.7 million and $1.5 million,
respectively, offset by the increase in salary and social insurance
expense, lease ROU amortization, amortization, leasehold
improvement depreciation and others of approximately $0.7 million,
$0.3 million, $0.2 million, $0.3 million and $0.1 million,
respectively.
Research and development expenses for the nine months ended
September 30, 2024 were approximately $4.3 million, a decrease of
approximately $1.1 million or approximately 19.7% from
approximately $5.3 million for the nine months ended September 30,
2023. The decrease in research and development expenses in 2024 was
primarily attributed to the decrease in design and testing material
expenditures of approximately $1.3 million, offset by the increase
in salary expense of approximately $0.4 million.
Net Loss
Net loss was approximately $27.4 million in the nine months
ended September 30, 2024, compared with net loss of $41.3 million
in the nine months ended September 30, 2023.
Balance Sheet
Cash and cash equivalents were approximately $21.8 million as of
September 30, 2024, compared with $29.4 million as of December 31,
2023.
Adjusted EBITDA
Adjusted EBITDA was approximately ($23.1) million in the nine
months ended September 30, 2024, compared with Adjusted EBITDA of
$(33.9) million in the nine months ended September 30, 2023.
We define Adjusted EBITDA as net income (or net loss) before net
interest expense, income tax expense, depreciation and amortization
as further adjusted to exclude the impact of stock-based
compensation expense and other non-recurring expenses including
expenses related to TME Acquisition, expenses related to one-off
payment inherited from the original Naked Brand Group, impairment
of goodwill, convertible bond issuance fee, loss on redemption of
convertible promissory notes, loss on exercise of warrants, and
change in fair value of convertible promissory notes and derivative
liability. We present Adjusted EBITDA because we consider it to be
an important supplemental measure of our performance and believe it
is frequently used by securities analysts, investors, and other
interested parties in the evaluation of companies in our industry.
Management believes that investors’ understanding of our
performance is enhanced by including this non-GAAP financial
measure as a reasonable basis for comparing our ongoing results of
operations.
US-GAAP NET INCOME (LOSS) TO ADJUSTED
EBITDA RECONCILIATION
Three Months ended September
30,
Nine Months ended
September 30,
2024
2023
2024
2023
(Expressed in U.S. Dollars)
(Unaudited)
(Unaudited)
Net loss
$
(8,981,587
)
$
(16,103,199
)
$
(27,405,605
)
$
(41,294,342
)
Interest expense, net
34,198
84,573
58,744
137,726
Income tax expense
(12,434
)
(384
)
(47,149
)
25,084
Depreciation and amortization
630,270
425,217
1,605,514
1,213,489
Share-based compensation expense
870,094
2,154,710
2,643,214
4,565,000
Loss on redemption of convertible
promissory notes
-
(966
)
-
(865
)
Loss on exercise of warrants
(910
)
1,134
(910
)
228,749
Change in fair value of convertible
promissory notes and derivative liability
6,724
(15,143
)
(1,808
)
(88,568
)
Loss from acquisition of Antric
-
1,316,772
-
1,316,772
Adjusted EBITDA
$
(7,453,645
)
$
(12,137,286
)
$
(23,148,000
)
$
(33,896,955
)
Represents a non-GAAP financial measure.
About Cenntro
Cenntro (NASDAQ: CENN) is a leading maker and provider of
electric commercial vehicles (“ECVs”). Cenntro's purpose-built ECVs
are designed to serve a variety of commercial applications
inclusive of its line of class 1 to class 8 trucks. Cenntro is
building a globalized supply-chain, as well as the manufacturing,
distribution, and service capabilities for its innovative and
reliable products. Cenntro continues to evolve its products
capabilities through advanced battery, powertrain, and smart
driving technologies. For more information, please visit Cenntro's
website at: 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,"
"approximately," "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. 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 the "Risk Factors"
in Cenntro's Annual Report on Form 10-K filed with the Securities
and Exchange Commission on April 1, 2024 and which may be viewed at
www.sec.gov.
CENNTRO INC.
UNAUDITED CONDENSED
CONSOLIDATED BALANCE SHEETS
(Expressed in U.S. dollars,
except for the number of shares)
September 30,
2024
December 31,
2023
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
21,822,485
$
29,375,727
Restricted cash
1,009,263
196,170
Short-term investment
9,647
4,236,588
Accounts receivable, net
4,556,857
6,530,801
Inventories
35,882,436
43,909,564
Prepayment and other current assets
20,971,578
20,391,150
Amounts due from related parties -
current
524,892
287,439
Total current assets
84,777,158
104,927,439
Non-current assets:
Long-term investment, net
4,078,386
4,685,984
Investment in equity securities
26,341,901
26,158,474
Property, plant and equipment, net
20,175,445
20,401,521
Goodwill
225,171
223,494
Intangible assets, net
6,623,871
6,873,781
Right-of-use assets
16,049,893
20,039,625
Other non-current assets, net
1,563,361
2,227,672
Total non-current assets
75,058,028
80,610,551
Total Assets
$
159,835,186
$
185,537,990
LIABILITIES AND EQUITY
LIABILITIES
Current liabilities:
Accounts payable
$
6,164,060
$
6,797,852
Short-term loans and current portion of
long-term loans
262,836
-
Accrued expenses and other current
liabilities
5,349,282
4,263,887
Contractual liabilities
4,958,315
3,394,044
Operating lease liabilities, current
4,605,336
4,741,599
Convertible promissory notes
9,952,000
9,956,000
Contingent liabilities
45,333
26,669
Deferred government grant, current
104,076
108,717
Amounts due to related parties
-
10,468
Total current liabilities
31,441,238
29,299,236
Non-current liabilities:
Long-term loans
361,400
-
Contingent liabilities non-current
213,326
230,063
Deferred tax liabilities
196,887
228,086
Deferred government grant, non-current
1,875,786
1,929,733
Derivative liability - investor
warrant
12,141,241
12,189,508
Derivative liability - placement agent
warrant
3,457,052
3,456,578
Operating lease liabilities,
non-current
13,288,324
16,339,619
Total non-current liabilities
31,534,016
34,373,587
Total Liabilities
$
62,975,254
$
63,672,823
Commitments and contingencies
EQUITY
Common stock (No par value;30,866,614 and
30,828,778 shares issued and outstanding as of September 30, 2024
and December 31, 2023, respectively)
-
-
Additional paid in capital
405,029,683
402,337,393
Accumulated deficit
(301,408,251
)
(274,023,501
)
Accumulated other comprehensive loss
(6,913,396
)
(6,444,485
)
Total equity attributable to
shareholders
96,708,036
121,869,407
Non-controlling interests
151,896
(4,240
)
Total Equity
$
96,859,932
$
121,865,167
Total Liabilities and Equity
$
159,835,186
$
185,537,990
CENNTRO INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
LOSS
(Expressed in U.S. dollars,
except for the number of shares)
For the Three Months Ended
September 30,
For the Nine Months Ended
September 30,
2024
2023
2024
2023
Net revenues
$
16,731,340
$
5,762,831
$
28,443,831
$
13,470,895
Cost of goods sold
(12,688,393
)
(5,045,364
)
(23,161,743
)
(11,411,439
)
Gross profit
4,042,947
717,467
5,282,088
2,059,456
OPERATING EXPENSES:
Selling and marketing expenses
(5,027,864
)
(2,626,829
)
(7,651,305
)
(7,238,563
)
General and administrative expenses
(7,934,755
)
(9,071,910
)
(21,945,891
)
(25,715,387
)
Research and development expenses
(1,476,684
)
(1,634,796
)
(4,292,153
)
(5,347,785
)
Total operating expenses
(14,439,303
)
(13,333,535
)
(33,889,349
)
(38,301,735
)
Loss from operations
(10,396,356
)
(12,616,068
)
(28,607,261
)
(36,242,279
)
OTHER EXPENSE:
Interest expense, net
(34,198
)
(84,573
)
(58,744
)
(137,726
)
Loss from long-term investment
(11,152
)
(107,069
)
(28,262
)
(236,672
)
Loss from acquisition of Antric Gmbh
-
(1,316,772
)
-
(1,316,772
)
Loss from acquisition of Hezhe
-
-
(149,872
)
-
Impairment of long-term investment
-
(2,668
)
-
(1,157,334
)
Gain on redemption of convertible
promissory notes
-
966
-
865
Gain/(Loss) on exercise of warrants
910
(1,134
)
910
(228,749
)
Change in fair value of convertible
promissory notes and derivative liability
(6,724
)
15,143
1,807
88,568
Change in fair value of equity
securities
262,417
(1,879,593
)
756,868
(1,166,125
)
Foreign currency exchange gain (loss),
net
1,838,505
(311,204
)
1,108,826
(1,667,475
)
(Loss)/ Gain from cross-currency swaps
(705
)
-
882
-
Other (expense) income, net
(646,718
)
199,389
(477,908
)
794,441
Loss before income taxes
(8,994,021
)
(16,103,583
)
(27,452,754
)
(41,269,258
)
Income tax benefit (expense)
12,434
384
47,149
(25,084
)
Net loss
(8,981,587
)
(16,103,199
)
(27,405,605
)
(41,294,342
)
Less: net loss attributable to
non-controlling interests
(9,815
)
(534
)
(20,855
)
(159,244
)
Net loss attributable to the Company’s
shareholders
$
(8,971,772
)
$
(16,102,665
)
(27,384,750
)
(41,135,098
)
OTHER COMPREHENSIVE LOSS
Foreign currency translation
adjustment
916,164
(931,345
)
(461,126
)
(3,419,038
)
Total comprehensive loss
(8,065,423
)
(17,034,544
)
(27,866,731
)
(44,713,380
)
Less: total comprehensive loss
attributable to non-controlling interests
(5,226
)
(534
)
(13,070
)
(183,812
)
Total comprehensive loss to the
Company’s shareholders
$
(8,060,197
)
$
(17,034,010
)
(27,853,661
)
(44,529,568
)
Weighted average number of shares
outstanding, basic and diluted *
30,841,106
30,444,909
30,832,928
30,400,293
Loss per share, basic and diluted *
(0.29
)
(0.53
)
(0.89
)
(1.35
)
CENNTRO INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Expressed in U.S. dollars,
except for the number of shares)
For the Nine Months
Ended
September 30,
2024
2023
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net cash used in operating
activities
$
(12,912,011
)
$
(45,588,906
)
CASH FLOWS FROM INVESTING
ACTIVITIES:
Purchase of equity investment
-
(680,932
)
Purchase of property, plant and
equipment
(720,445
)
(7,329,509
)
Purchase of land use right and
property
-
(2,183,430
)
Purchase of other intangible assets
-
(7,502
)
Acquisition of CAE's equity interests
-
(1,924,557
)
Acquisition of Antric Gmbh's equity
interests
-
(1
)
Cash acquired from acquisition of Antric
Gmbh
-
1,376
Net of cash acquired of 60% of Hezhe’s
equity interests
(355,400
)
-
Purchase of short-term investment
(4,167,970
)
-
Proceeds from short-term investment
8,431,348
-
Cash dividend received
55,573
-
Proceeds from disposal of property, plant
and equipment
41,495
842
Loans provided to third parties
-
(790,000
)
Proceeds from interest and redemption of
equity securities investment
1,573,441
-
Net cash provided by (used in)
investing activities
4,858,042
(12,913,713
)
CASH FLOWS FROM FINANCING
ACTIVITIES:
Proceeds from bank loans
662,836
-
Repayment of bank loans
(38,600
)
(602,477
)
Loans proceed from third parties
708,832
-
Repayment of loans to third parties
(90,000
)
-
Redemption of convertible promissory
notes
-
(47,534,119
)
Net cash provided by (used in)
financing activities
1,243,068
(48,136,596
)
Effect of exchange rate changes on cash,
cash equivalents and restricted cash
70,752
(2,614,204
)
Net decrease in cash, cash equivalents and
restricted cash
(6,740,149
)
(109,253,419
)
Cash, cash equivalents and restricted cash
at beginning of period
29,571,897
154,096,801
Cash, cash equivalents and restricted cash
at end of period
$
22,831,748
$
44,843,382
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Interest paid
$
553,654
$
1,200,673
Income tax paid
$
-
$
4,829
SUPPLEMENTAL DISCLOSURE OF NON-CASH
INVESTING AND FINANCING ACTIVITIES:
Convention from debt to equity interest of
HW Electro Co., Ltd.
$
-
$
1,000,000
Cashless exercise of warrants
$
49,076
$
2,168,185
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241112024850/en/
Investor Relations Contact: Chris Tyson MZ North America
CENN@mzgroup.us 949-491-8235
Company Contact: PR@cenntroauto.com
IR@cenntroauto.com
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