CHANGZHOU, China, Aug. 18, 2022 /PRNewswire/ -- EZGO Technologies Ltd. (Nasdaq: EZGO) ("EZGO" or "we", "our", or "the Company"), a leading short-distance transportation solutions provider in China, today announced its unaudited financial results for the six months ended March 31, 2022.

Financial Highlights (all results compared to the prior year period unless otherwise noted)

• Revenues were $6.0 million, a decrease of 34.3% 
• Units sold reached 23,097, a decrease of 32.2% 
• Gross margin was 4.7%, compared with 8.3% 
• Net loss was $2.7 million, compared with net loss of $0.3 million 
• The Company has cash and cash equivalents of approximately $2.1 million at March 31, 2022, compared to approximately $4.8 million at September 30, 2021

Management Commentary

Mr. Jianhui Ye, Chief Executive Officer of EZGO, stated, "During the six months ended March 31, 2022, our business was adversely impacted greater than during any other period since the commencement of the COVID-19 pandemic in early 2020. We were required to implement random shutdowns of our Tianjin and Changzhou plants in order to control the spread of COVID-19. During this period, our production, supply and channel promotion of electric bicycles were materially adversely effected. Since the fourth quarter of 2021, we have implemented a new channel sales model in some provinces, changing from the traditional model of 'Factory + Dealer + Store' to 'Factory + City partner + Store'. The market resource input of the original sales model was gradually decreased, which also resulted in the decline of sales volume during the six months ended March 31, 2022."

Mr. Ye concluded, "The implementation of our new sales model, since the fourth quarter of 2021, by more urban partners and stores, along with the launch of our new products and the easing of the domestic COVID-19 pandemic control policy, has resulted in a gradual recovery in sales of our electric bicycles, as well as sales of our supporting lithium batteries beginning in June 2022."

Financial Review for the Six Months Ended March 31, 2022

Net Revenues

Net revenues from continuing operations for the six months ended March 31, 2022 were approximately $6.0 million, a 34.3% decrease from approximately $9.2 million for the six months ended March 31, 2021. The decrease in revenues were mainly driven by the decrease of sales of e-bicycles, and partially offset by the increase of sales of battery and battery packs.

The following table identifies revenue from continuing operations and discontinued operation, as well as reportable segments for the six months ended March 31, 2022 and 2021:

The e-bicycles sales segment engaged in online and offline sales of e-bicycles. The revenue of sales of e-bicycles decreased to approximately $3.6 million, or approximately 46.9%, for the six months ended March 31, 2022 as compared to the same period in 2021, mainly due to the repeated outbreaks of COVID-19 in the first quarter of 2022 and adjustments made to selling policies.

The revenue from battery cells and packs segment for the six months ended March 31, 2022 and 2021 were approximately $1.6 million and $1.0 million, respectively, a 53.8% increase derived from new customers and continuing relationships with long-term customers, as a mitigated measure to reduce the impact of COVID-19 on sales of e-bicycles.

Cost of Revenues

Our cost of revenues significantly decreased by approximately $2.7 million, or approximately 31.7%, to approximately $5.7 million for the six months ended March 31, 2022 from approximately $8.4 million for the six months ended March 31, 2021, which was primarily driven by the decreased sales of e-bicycles due to the impact of COVID-19. The decrease was in line with the decrease in our net revenues.

Gross Profit

Gross profit for the six months ended March 31, 2022 and 2021 was approximately $282,000 and $757,000, representing 4.7% and 8.3% of net revenues, respectively. The decrease of gross profit during the six months ended in March 31, 2022, is primarily due to the decreased sales of e-bicycles accounting for a large proportion of our total revenue, thus, the gross profit rate converged with that of sales of e-bicycles.

Selling and Marketing Expenses

Our selling and marketing expenses primarily consist of salaries and benefits expense, advertising expense, and freight expense. Our selling and marketing expenses increased by approximately $223,000 or approximately 64.8%, to approximately $567,000 for the six months ended March 31, 2022 from approximately $344,000 for the six months ended March 31, 2021. Such increase consisted of the increase of salaries and benefits expense and advertising expense, which resulted from the recruitment of new salespersons with the Company's business expansion on sales of e-bicycles, and the exhibition promotion of sales of e-bicycles.

General and Administrative Expenses

Our general and administrative expenses increased by approximately $1.3 million or approximately 154.1%, to approximately $2.1 million for the six months ended March 31, 2022 from approximately $833,000 for the six months ended March 31, 2021. The significant increase was mainly due to higher R&D expenses invested for new models during the six months ended March 31, 2022 and the amortization expenses of the land use right acquired since July, 2021.

Income Tax Expense

Income tax expense amounted to approximately $519,000 for the six months ended March 31, 2022 and $17,000 for the six months ended March 31, 2021, respectively. The significant increase of income tax expense is primarily due to the Company determines that the cumulative deductible loss carryforwards of PRC subsidiaries is likely not to be fully utilized against future taxable income and thus it is accrued as valuation allowance of deferred tax assets.

Net Loss

Net loss for the six months ended March 31, 2022 was approximately $2.7 million, compared to approximately $289,000 for the same period in 2021, mainly due to the above reasons.

About EZGO Technologies Ltd.

Leveraging an Internet of Things (IoT) product and service platform and three e-bicycle brands, "EZGO", "Cenbird" and "Dilang", EZGO has established a business model centered on the manufacturing and sale of two- and three-wheeled electric vehicles, lithium batteries, complemented by the e-bicycle charging pile business. For additional information, please visit EZGO's website at www.ezgotech.com.cn. Investors can visit the "Investor Relations" section of EZGO's website at https://www.ezgotech.com.cn/Investor/.

Exchange Rate

This announcement contains translations of certain Chinese Renminbi ("RMB") amounts into U.S. dollars ("US$") at specified rates solely for the convenience of the readers. Unless otherwise stated, all translations from RMB to US$ were made at the rate of RMB 6.3393 to US$ 1.00, the exchange rate in effect as of March 31, 2022, as set forth in the H.10 Statistical release of the Board of Governors of the Federal Reserve System. The Company makes no representation that the RMB or US$ amounts referred could be converted into US$ or RMB, as the case may be, at any particular rate or at all.

Safe Harbor Statement

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may," "will," "intend," "should," "believe," "expect," "anticipate," "project," "estimate," or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's goals and strategies; the Company's future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the short-distance transportation solutions market in China and the other international markets the Company plans to serve; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and the international markets the Company plans to serve and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission ("SEC"), including the Company's most recently filed Annual Report on Form 20-F and its subsequent filings. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward‐looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:
At the Company: 
Shawn Wen 
Email: ir@ez-go.com.cn
Phone: (+86) 13502829216