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CCSC Technology International Holdings Limited Reports Financial Results for the First Six Months of Fiscal Year 2024

HONG KONG, Feb. 23, 2024 /PRNewswire/ — CCSC Technology International Holdings Limited (the “Company” or “CCSC”) (Nasdaq: CCTG), a Hong Kong-based company that engages in the sale, design and manufacturing of interconnect products, including connectors, cables and wire harnesses, today announced its unaudited financial results for the first six months of fiscal year 2024 ended September 30, 2023.

Mr. Kung Lok Chiu, Chief Executive Officer and Director of the Company, commented, “During the first six months of fiscal year 2024, amidst macroeconomic uncertainties and rising supply chain costs, our revenue and gross profit decreased from the same period of last year; however, our gross margin remained stable despite the challenging environment. Furthermore, in January 2024, we completed our initial public offering and listing on the Nasdaq Capital Market under the ticker symbol “CCTG”, which we expect to enhance our competitiveness globally. Looking forward, we plan to strategically focus on growing industries, such as new energy, robotics, and medical. We also plan to keep investing in research and development and offering innovative and cost-effective products to our customers. We are committed to delivering high-quality products to our customers and generating long-term value for our shareholders.”

First Six Months of Fiscal Year 2024 Financial Highlights

  • Revenue was $7.5 million for the six months ended September 30, 2023, compared to $15.6 million for the same period of last year.
  • Gross profit was $2.3 million for the six months ended September 30, 2023, compared to $5.4 million for the same period of last year.
  • Loss from operations was $0.3 million for the six months ended September 30, 2023, compared  to income from operations of $2.1 million for the same period of last year.
  • Net income was $0.4 million for the six months ended September 30, 2023, compared to $2.8 million for the same period of last year.
  • Basic and diluted earnings per share was $0.04 for the six months ended September 30, 2023, compared to $0.28 for the same period of last year.

First Six Months of Fiscal Year 2024 Financial Results

Revenue

Total revenue was $7.5 million for the six months ended September 30, 2023, which decreased by 52.0% from $15.6 million for the same period of last year.

The following table sets forth revenue by interconnect products:



For the Six Months Ended September 30,



Change


($ millions)


2023



%



2022



%



Amount



%


Cables and wire harnesses



6.9




91.8

%



14.5




93.0

%



(7.6)




(52.6)

%

Connectors



0.6




8.2

%



1.1




7.0

%



(0.5)




(43.5)

%

Total



7.5




100.0

%



15.6




100.0

%



(8.1)




(52.0)

%

Revenue generated from cables and wire harnesses decreased by 52.6%, to $6.9 million for the six months ended September 30, 2023, from $14.5 million for the same period of last year. Revenue generated from connectors decreased by 43.5%, to $0.6 million for the six months ended September 30, 2023, from $1.1 million for the same period of last year.

The decrease in our revenue was primarily attributable to the decrease in sales volume. We experienced a contraction in demand, primarily because a number of our customers had purchased our products in advance in fiscal year 2022 and the first half of fiscal year 2023 in anticipation of higher supply chain costs. Customers also preferred reduced inventory, due to uncertainties about macroeconomic conditions.

The following table sets forth the disaggregation of revenue by regions:



For the Six Months Ended September 30,



Change


($ millions)


2023



%



2022



%



Amount



%


Europe



4.3




57.8

%



9.8




62.8

%



(5.5)




(55.8)

%

Asia



2.4




31.8

%



4.7




29.8

%



(2.3)




(48.7)

%

Americas



0.8




10.4

%



1.2




7.4

%



(0.4)




(32.9)

%

Total



7.5




100.0

%



15.6




100.0

%



(8.1)




(52.0)

%

Revenue generated from Europe decreased by 55.8%, to $4.3 million for the six months ended September 30, 2023, from $9.8 million for the same period of last year. The decrease was primarily due to the decrease of sales in Denmark, Hungary and Finland.

Revenue generated from Asia decreased by 48.7%, to $2.4 million for the six months ended September 30, 2023, from $4.7 million for the same period of last year. The decrease was primarily due to sales decreases in China of $1.5 million, and sales decreases in the Association of Southeast Asian Nations, or ASEAN, of $0.8 million.

Revenue generated from the Americas decreased by 32.9%, to $0.8 million for the six months ended September 30, 2023, from $1.2 million for the same period of last year. The decrease was primarily due to sales decreases in Northern America of $0.4 million.

Cost of Revenue

Cost of revenue decreased by 48.7%, to $5.2 million for the six months ended September 30, 2023, from $10.2 million for the same period of last year, which was in line with the decrease of the total revenue.

Inventory costs amounted to $3.5 million for the six months ended September 30, 2023, compared to $7.9 million for the same period of last year. The decrease of inventory costs was primarily due to a 51.5% decrease in the total sales volume and an 8.5% decrease in the inventory cost per unit.

Labor costs amounted to $1.2 million for the six months ended September 30, 2023, compared to $1.7 million for the same period of last year. The decrease of labor costs was primarily due to the reduction in the number of our manufacturing employees.

Gross Profit and Gross Margin

Gross profit decreased by 58.1%, to $2.3 million for the six months ended September 30, 2023, from $5.4 million for the same period of last year.

Gross profit margin decreased by 4.4%, to 30.4% for the six months ended September 30, 2023, from 34.8% for the same period of last year. The gross profit margin was generally on par with the same period of 2022.

Operating Expenses

Operating expenses decreased by 23.2%, to $2.6 million for the six months ended September 30, 2023, from $3.3 million for the same period of last year. The expense reduction was mainly due to the decreases in the selling expenses, general and administrative expenses, and research and development expenses.

Other Income/(Expenses)

Other income decreased by 37.0%, to $0.6 million for the six months ended September 30, 2023, from $1.0 million for the same period of last year. The decrease included an increase in foreign exchange loss of $0.4 million.

Net Income

Net income decreased by 85.4%, to $0.4 million for the six months ended September 30, 2023, from $2.8 million for the same period of last year.

Basic and Diluted Earnings per Share

Basic and diluted earnings per share was $0.04 for the six months ended September 30, 2023, compared to $0.28 for the same period of last year.

Recent Development

On January 22, 2024, the Company completed its initial public offering (the “Offering”) of 1,375,000 ordinary shares at a public price of $4.00 per share. On February 8, 2024, the underwriters of Offering exercised their over-allotment option in full to purchase an additional 206,250 ordinary shares of the Company at the public offering price of US$4.00 per share. The gross proceeds were $6.325 million from the Offering, before deducting underwriting discounts and commissions, and other expenses. The Company’s ordinary shares began trading on the Nasdaq Capital Market on January 18, 2024, under the ticker symbol “CCTG.”

About CCSC Technology International Holdings Limited

CCSC Technology International Holdings Limited, is a Hong Kong-based company that engages in the sale, design and manufacturing of interconnect products. The Company specializes in customized interconnect products, including connectors, cables and wire harnesses that are used for a range of applications in a diversified set of industries, including industrial, automotive, robotics, medical equipment, computer, network and telecommunication, and consumer products. The Company produces both OEM (“original equipment manufacturer”) and ODM (“original design manufacture”) interconnect products for manufacturing companies that produce end products, as well as electronic manufacturing services (“EMS”) companies that procure and assemble products on behalf of such manufacturing companies. The Company has a diversified global customer base located in more than 25 countries throughout Asia, Europe and the Americas. For more information, please visit the Company’s website: http://ir.ccsc-interconnect.com.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements, including, but not limited to, the Company’s proposed Offering. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as “may,” “will,” “could,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “propose,” “potential,” “continue”, or other similar expressions in this press release. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the U.S. Securities and Exchange Commission.

For more information, please contact:

CCSC Technology International Holdings Limited
Investor Relations Department
Email: [email protected]

Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: [email protected]

CCSC TECHNOLOGY INTERNATIONAL HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(Amount in U.S. dollars, except for number of shares)




As of
September 30,
2023



As of
March 31,
2023


Assets


(Unaudited)





Current assets:







Cash


$

7,370,501



$

7,708,310


Restricted cash



9,095




9,305


Accounts receivable



2,295,302




2,260,222


Inventories, net



1,854,088




2,187,518


Deferred initial public offering costs



1,419,736




1,051,038


Prepaid expenses and other current assets



1,407,266




1,242,054


Total current assets



14,355,988




14,458,447











Non-current assets:









Property, plant and equipment, net



179,169




211,949


Intangible asset, net



66,787




88,319


Operating right-of-use assets, net



1,754,977




2,121,070


Deferred tax assets, net



115,989




41,015


Other non-current assets



39,387




41,844


Total non-current assets



2,156,309




2,504,197


TOTAL ASSETS


$

16,512,297



$

16,962,644











Liabilities and Shareholders’ Equity









Current liabilities:









Accounts payable


$

2,009,560



$

1,663,749


Advance from customers



125,218




186,874


Accrued expenses and other current liabilities



1,537,312




1,648,970


Taxes payable



361,035




365,851


Operating lease liabilities – current



434,871




485,051


Long-term bank loan – current






39,725


Total current liabilities



4,467,996




4,390,220











Non-current liabilities:









Operating lease liabilities – non-current



1,343,653




1,653,411


Total non – current liabilities



1,343,653




1,653,411


TOTAL LIABILITIES


$

5,811,649



$

6,043,631











Commitments and Contingencies
















Shareholders’ equity









Ordinary shares, par value of US$0.0005 per share; 100,000,000 shares authorized,
   10,000,000 shares issued and outstanding as of September 30, 2023 and March 31,
   2022*



5,000




5,000


Subscription receivable






(5,000)


Additional paid-in capital



1,236,773




1,236,773


Statutory reserve



813,235




813,235


Retained earnings



10,628,306




10,214,692


Accumulated other comprehensive loss



(1,982,666)




(1,345,687)


Total shareholders’ equity



10,700,648




10,919,013


TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY


$

16,512,297



$

16,962,644


*The shares and per share information are presented on a retroactive basis to reflect the corporate subdivision and 1 to 2 share split.

CCSC TECHNOLOGY INTERNATIONAL HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME

AND COMPREHENSIVE (LOSS)/INCOME

(Amount in U.S. dollars, except for number of shares)




For the six months ended
September 30,




2023



2022


Net revenue


$

7,503,520



$

15,620,925


Cost of revenue



(5,223,159)




(10,181,670)


Gross profit



2,280,361




5,439,255











Operating expenses:









Selling expenses



(473,636)




(566,879)


General and administrative expenses



(1,753,179)




(2,202,153)


Research and development expenses



(338,038)




(568,648)


Total operating expenses



(2,564,853)




(3,337,680)











Loss/(Income) from operations



(284,492)




2,101,575











Other income/(expenses):









Other non-operating income, net



51,628




16,221


Government subsidies






59,079


Foreign currency exchange gains



539,844




921,565


Financial and interest income/(expenses), net



35,783




(1,483)


Total other income



627,255




995,382











Income before income tax expense



342,763




3,096,957


Income tax benefits/(expenses)



70,851




(256,607)


Net income



413,614




2,840,350











Other comprehensive (loss)/income









Foreign currency translation adjustment



(636,979)




(1,096,403)


Total comprehensive (loss)/income


$

(223,365)



$

1,743,947











Earnings per share









Basic and Diluted


$

0.04



$

0.28


Weighted average number of ordinary shares









Basic and Diluted*



10,000,000




10,000,000


* The shares and per share information are presented on a retroactive basis to reflect the corporate subdivision and 1 to 2 share split.

CCSC TECHNOLOGY INTERNATIONAL HOLDINGS LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Amount in U.S. dollars, except for number of shares)




For the six months ended
September 30,




2023



2022


CASH FLOWS FROM OPERATING ACTIVITIES:







Net income


$

413,614



$

2,840,350


Adjustments to reconcile net income to net cash provided by operating activities:









Change in inventory reserve



73,643




(10,202)


Depreciation and amortization



114,208




172,174


Amortization of right-of-use asset



251,865




276,485


Loss from disposal of fixed assets



595




363


Deferred tax (expenses)/benefits



(79,198)




1,450


Foreign currency exchange gains



(539,844)




(921,565)


Changes in operating assets and liabilities:









Accounts receivable



(47,683)




(2,227,930)


Inventories



164,072




1,559,757


Amount due from related parties






478,724


Prepaid expenses and other current assets



(223,354)




39,894


Operating right-of-use assets






(2,281,448)


Other non-current assets






42,077


Accounts payable



418,473




(600,059)


Advance from customers



(60,075)




(43,413)


Taxes payable



(4,408)




151,071


Accrued expenses and other current liabilities



(39,341)




(56,394)


Operating lease liabilities



(244,763)




1,987,398


Amount due to related parties






(215,163)


Net cash provided by operating activities



197,804




1,193,569











CASH FLOWS FROM INVESTING ACTIVITIES









Purchase of property and equipment



(52,025)




(110,498)


Proceed from disposal of property and equipment






11


Purchase of intangible asset



(19,217)




(23,691)


Net cash used in investing activities



(71,242)




(134,178)











CASH FLOWS FORM FINANCING ACTIVITIES









Proceeds from short-term bank loans






136,641


Repayments of long-term bank loans



(39,817)




(77,478)


Payment for deferred initial public offering costs



(366,094)




(442,399)


Capital contribution by shareholders



5,000





Net cash used in financing activities



(400,911)




(383,236)











Effect of exchange rate changes on cash and restricted cash



(63,670)




(60,781)











Net change in cash and restricted cash



(338,019)




615,374


Cash and restricted cash, beginning of the period



7,717,615




5,285,940


Cash and restricted cash, end of the period


$

7,379,596



$

5,901,314











SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:









Cash paid for income tax


$

(39,402)



$

(39,113)


Cash paid for interest


$

(228)



$

(3,154)


Cash paid for operating lease


$

(288,667)



$

(309,679)











Supplemental disclosure of non-cash investing and financing activities:









Right-of-use assets obtained in exchange for operating lease obligations


$



$

1,955,909


SOURCE CCSC Technology International Holdings Limited

Originally published at https://www.prnewswire.com/news-releases/ccsc-technology-international-holdings-limited-reports-financial-results-for-the-first-six-months-of-fiscal-year-2024-302070220.html
Images courtesy of https://pixabay.com

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