Wetouch Technology Inc. (WETH) Reports First Quarter 2021 Unaudited Financial Results
-Revenues increased by
-Net income increased by
Chengdu, China, May 26, 2021 (GLOBE NEWSWIRE) -- Wetouch Technology Inc. (OTCQB: WETH) ("Wetouch" or "the Company"), a specialty manufacturer of medium to large sized projected capacitive touchscreens today announced its unaudited financial results for the first quarter ended March 31, 2021.
First Quarter 2021 Financial Highlights
- Total net revenues were US
$10.7 million , representing a202.3% increase from US$3.5 million from the same period in 2020. - Gross profit increased by
197.5% to US$5.1 million from US$1.6 million for the same period in 2020. - Gross margin was
48.4% , compared with46.6% for the same period in 2020 - Net income increased by
563.9% to US$8.4 million , including one time gain on asset disposal of$7.6 million , from US$1.3 million from the same period in 2020. - Basic and diluted EPS. Basic and diluted net income per share were
$0.25 , compared with$0.04 in the same period of 2020. - Cash at the end of first quarter of 2021 was US
$54.5 million compared to US$24.0 million at the end of fiscal year 2020.
“we are pleased to see continued strong recovery of businesses for the first quarter despite the challenges from a small wave of Covid-19 outbreak. We kicked off 2021 with strong topline growth and significant improvement in almost all key operational metrics, placing us firmly on track to further growth,” Mr. Guangde Cai, Chairman of WETH, commented, “Geographically, sales from PRC increased by
First Quarter 2021 Financial Results
Total Revenues. We generated revenue of
Gross Profit and Gross Profit Margin. Gross profit was
Gain on Asset Disposal. Gain on asset disposal was
Income Tax Expenses. Income tax expense was
Net Income. We had a net income of
Basic and diluted EPS. Basic and diluted net income per share were
Cash and cash equivalents. As of March 31, 2021, the Company had cash and cash equivalents, of
Caution Concerning Forward Looking Statements
The SEC encourages companies to disclose forward-looking information so that investors can better understand a company's future prospects and make informed investment decisions. The information on this website contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the fact that they do not relate strictly to historical or current facts. Forward-looking statements often include words such as "anticipates," "estimates," "expects," "projects," "intends," "plans," "believes" and words and terms of similar substance in connection with discussions of future operating or financial performance.
New risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking statements.
The Company's forward-looking statements are based on management's current expectations and assumptions regarding the Company's business and performance, the economy and other future conditions and forecasts of future events, circumstances and results. As with any projection or forecast, forward-looking statements are inherently susceptible to uncertainty and changes in circumstances. The Company's actual results may vary materially from those expressed or implied in its forward-looking statements. Important factors that could cause the Company's actual results to differ materially from those in its forward-looking statements include government regulation, economic, strategic, political and social conditions and the risk factors set forth in the Company’s Annual Report for the year ended December 31, 2020 filed with the SEC on March 24, 2021.
About Wetouch Technology Inc
Wetouch, through its indirect wholly-owned subsidiaries, Sichuan Wetouch Technology Co. Ltd and Sichuan Vouch Technology Co., Ltd, is engaged in the manufacturing and sales of medium to large sized projected capacitive touchscreens, ranging from 7.0 inch to 42 inch screens. The Company offers touchscreens for a variety of applications, including GPS/car entertainment panels for automotive industry, industrial human-machine interface (“HMI”), financial and banking terminals, point of sale, lottery and gaming machines, smart home, robots and charging stations. Wetouch sells its products both domestically in China and internationally, covering major areas in China, including but not limited to the eastern, southern, northern and southwest regions of China. Touchscreens produced by the Company not only have long life span and are low maintenance, but also have strong anti-interference, anti-corrosion, multi-touch capability and high light-transmittance ratio and stability. Wetouch has shipped products to South Korea and several European countries such as Spain and Germany and has established a strong and diversified client base. As of September 30, 2020, Wetouch held 10 patents and has passed a number of industry certifications, including ISO9001, ISO14001, TS16949, FCC, CE, ROHS, CCC, ROHS.
Investor Relation Contact:
Sophie Zhang
szhang@ascendantga.com
WETOUCH TECHNOLODY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
As of March 31, | As of December 31, | |||||||
2021 | 2020 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ | 54,478,833 | $ | 23,963,861 | ||||
Accounts receivable, net | 4,502,711 | 11,926,835 | ||||||
Inventories | 195,057 | 402,050 | ||||||
Due from related parties | - | 76,619 | ||||||
Prepaid expenses and other current assets | 16,109 | 228,443 | ||||||
TOTAL CURRENT ASSETS | 59,192,710 | 36,597,808 | ||||||
Property, plant and equipment, net | - | 9,491,195 | ||||||
Intangible assets, net | - | 974,696 | ||||||
TOTAL ASSETS | $ | 59,192,710 | $ | 47,063,699 | ||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Accounts payable | $ | 2,008,034 | $ | 891,848 | ||||
Amount due to related parties | 628,604 | 529,060 | ||||||
Income tax payable | 783,098 | 107,137 | ||||||
Accrued expenses and other current liabilities | 186,036 | 503,455 | ||||||
Deferred grants | - | 245,211 | ||||||
TOTAL CURRENT LIABILITIES | 3,605,772 | 2,276,711 | ||||||
Deferred grants-non current | - | 433,206 | ||||||
TOTAL LIABILITIES | $ | 3,605,772 | $ | 2,709,917 | ||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Common stock, | $ | 31,812 | $ | 31,501 | ||||
Additional paid in capital | 4,221,727 | 1,072,932 | ||||||
Statutory reserve | 3,062,159 | 3,062,159 | ||||||
Retained earnings | 47,590,531 | 39,229,282 | ||||||
Accumulated other comprehensive income | 680,709 | 957,908 | ||||||
TOTAL STOCKHOLDERS’ EQUITY | 55,586,938 | 44,353,782 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 59,192,710 | $ | 47,063,699 |
WETOUCH TECHNOLODY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(Unaudited)
For the three months ended March 31, | ||||||||
2021 | 2020 | |||||||
REVENUES | ||||||||
Revenues from customers | $ | 10,615,924 | $ | 3,509,092 | ||||
Revenues from related parties | 97,380 | - | ||||||
TOTAL REVENUES | 10,713,304 | 3,509,092 | ||||||
COST OF REVENUES | (5,571,806 | ) | (1,872,783 | ) | ||||
GROSS PROFIT | 5,141,498 | 1,636,309 | ||||||
OPERATING EXPENSES | ||||||||
Selling expenses | (87,823 | ) | (18,705 | ) | ||||
General and administrative expenses | (494,897 | ) | (208,277 | ) | ||||
Research and development expenses | (22,180 | ) | (15,342 | ) | ||||
Share-based compensation | (3,149,106 | ) | - | |||||
Total operating expenses | (3,754,006 | ) | (242,324 | ) | ||||
INCOME FROM OPERATIONS | 1,387,492 | 1,393,985 | ||||||
OTHER INCOME (EXPENSES) | ||||||||
Interest income | 22,015 | 19,617 | ||||||
Interest expense | (4 | ) | (2,969 | ) | ||||
Government grant | 691,713 | 71,648 | ||||||
Gain on asset disposal | 7,611,646 | - | ||||||
TOTAL OTHER INCOME , NET | 8,325,370 | 88,296 | ||||||
INCOME BEFORE INCOME TAX EXPENSE | 9,712,862 | 1,482,281 | ||||||
INCOME TAX EXPENSE | (1,351,613 | ) | (222,787 | ) | ||||
NET INCOME | $ | 8,361,249 | $ | 1,259,494 | ||||
OTHER COMPREHENSIVE INCOME (LOSS) | ||||||||
Foreign currency translation adjustment | (277,199 | ) | (550,418 | ) | ||||
COMPREHENSIVE INCOME | $ | 8,084,050 | $ | 709,076 | ||||
EARNINGS PER COMMON SHARE | ||||||||
Basic | $ | 0.25 | $ | 0.04 | ||||
Diluted | $ | 0.25 | $ | 0.04 | ||||
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING* | ||||||||
Basic | 31,810,834 | 28,000,000 | ||||||
Diluted | 32,652,474 | 28,000,000 |
*Retrospectively restated for effect of recapitalization, see Note 1
WETOUCH TECHNOLODY INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
For the three-months ended March 31, | ||||||||
2021 | 2020 | |||||||
Cash flows from operating activities | ||||||||
Net income | $ | 8,361,249 | $ | 1,259,494 | ||||
Adjustments to reconcile net income to cash provided by operating activities | ||||||||
Bad debts reversal | (76,124 | ) | - | |||||
Depreciation and amortization | 374,303 | 256,926 | ||||||
Share-based compensation | 3,149,106 | - | ||||||
Gain on asset disposal | (7,611,646 | ) | - | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 8,279,581 | 180,907 | ||||||
Amounts due from related parties | 83,354 | (15,656 | ) | |||||
Inventories | 232,797 | (22,140 | ) | |||||
Prepaid expenses and other current assets | 228,021 | (50,807 | ) | |||||
Accounts payable | 1,075,994 | 1,142,323 | ||||||
Amounts due to related parties | 69,615 | 211,486 | ||||||
Income tax payable | 676,997 | (415,867 | ) | |||||
Accrued expenses and other current liabilities | (350,360 | ) | (136,540 | ) | ||||
Deferred grants | (725,518 | ) | (57,318 | ) | ||||
Net cash provided by operating activities | 13,767,369 | 2,352,808 | ||||||
Cash flows from investing activities | ||||||||
Proceeds from assets disposal | 17,773,202 | - | ||||||
Net cash provided by investing activities | 17,773,202 | - | ||||||
Cash flows from financing activities | ||||||||
Net cash used in financing activities | - | - | ||||||
Effect of changes of foreign exchange rates on cash | (1,025,599 | ) | (273,935 | ) | ||||
Net increase in cash | 30,514,972 | 2,078,873 | ||||||
Cash, beginning of period | 23,963,861 | 14,279,797 | ||||||
Cash, end of period | $ | 54,478,833 | $ | 16,358,670 | ||||
Supplemental disclosure of cash flow information | ||||||||
Cash paid for interest expense | $ | - | $ | - | ||||
Cash paid for income tax | $ | 667,895 | $ | 638,654 |