PR Newswire | Dec 23, 2021 05:00PM EST

2021

12/23 16:00 CST

Mingzhu Announces Unaudited Financial Results for the Six Months Ended June 30, 2021 SHENZHEN, China, Dec. 23, 2021

SHENZHEN, China, Dec. 23, 2021 /PRNewswire/ -- MingZhu Logistics Holdings Limited ("MingZhu" or the "Company") (NASDAQ: YGMZ), an elite provider of logistics and transportation services to businesses, today announced its financial results for the six months ended June 30, 2021.

Mr. Jinlong, CEO of MingZhu, commented, "We ended the first half of 2021 in a stronger financial position, with 8.2% year over year revenue growth, a 15% improvement in gross profit, and a 24% improvement in operating income. We have been successfully executing on multiple fronts, while continuing to navigate the challenged COVID-19 environment. Of note, we have shuttered our Xinjiang operation and shifted to an asset-light strategy."

Mr. Jinlong, CEO of MingZhu, continued, "We continue to make significant progress in our business diversification strategy, including recent announcements of non-binding memorandums of understanding with Damo Electric Truck, and Xinjiang Feipeng Logistics Co. Ltd., and a major cooperation agreement with China Merchants Logistics Group Urumqi Limited. We are actively evaluating market opportunities that can serve as natural extensions of our business and be totally additive from both a revenue and profitability standpoint. A great example of this is the recent announcement of our expansion into the commercial liquor distribution market given its compelling synergies and adjacency to our existing business. Taken together, we are optimistic in our outlook and excited about the opportunities in front of us, as we focus on unlocking additional value for the company and shareholders."

Financial Results for the Six Months Ended June 30, 2021

Revenue for the six months ended June 30, 2021, increased by $0.7 million, or 8.2%, to $9.6 million from $8.9 million for the same period of last year. This increase was mainly attributable to growth of the Company's subcontracting business.

Gross profit increased by $0.2 million, or 15.0%, to $1.4 million for the six months ended June 30, 2021, from $1.2 million for the same period of last year. Gross margin increased by 0.8 percentage points to 14.3% for the six months ended June 30, 2021, from 13.5% for the same period of last year. The gross margin increase was primarily due to an improvement in the profitability of the Company's self-owned vehicle business.

General and administrative expenses increased by $352,270, or 61.0%, to $932,409 for the six months ended June 30, 2021, from $579,139 for the same period of last year. The increase was primarily due to the increase of professional fees. Provision for doubtful accounts decreased by $261,702, or 100%, to $nil for the six months ended June 30, 2021, from $261,702 for the same period of last year. The collection of accounts receivables was back to normal, and the Company did not record any provision for doubtful accounts for the first half of 2021. Total operating expenses increased by $0.6 million, or 7.6%, to $9.2 million for the six months ended June 30, 2021, from $8.6 million for the same period of last year.

Operating income increased by $74,926, or 24.0%, to $386,940 for the six months ended June 30, 2021, from $312,014 for the same period of last year. Operating margin was 4.0% for the six months ended June 30, 2021, compared to 3.5% for the same period of last year. Net loss for the first six months ended June 30, 2021, was $355,744, as compared to net income of $106,698 for the same period of last year.

Balance Sheet and Cash Flow

As of June 30, 2021, the Company had a balance of cash and restricted cash of $14.2 million compared to $11.6 million at December 31, 2020. Accounts receivable were $2.5 million as of June 30, 2021, compared to $5.3 million as of December 31, 2020. The decrease of accounts receivable was due to the improvement of collection from large customers. The balance of prepayment to suppliers totaled $6.0 million as of June 30, 2021, compared to $1.1 million as of December 31, 2020, reflecting increased demands from the Company's subcontractors. Total working capital was $31.6 million as of June 30, 2021, compared to $17.7 million at December 31, 2020.

Net cash used in operating activities was $5.0 million for the six months ended June 30, 2021, compared to net cash provided by operating activities of $1.5 million for the same period of last year. This was primarily due to the increase in payment in advance to suppliers. Net cash used in investing activities was $57,204 for the six months ended June 30, 2021, compared to $136,964 for the same period of last year. Net cash provided by financing activities was $7,653,904 for the six months ended June 30, 2021, compared to net cash used in by financing activities of $1.2 million for the same period of last year. This was primarily due to the proceeds from public offerings and the bank borrowings.

About MingZhu Logistics Holdings Limited (NASDAQ: YGMZ)

Established in 2002 and headquartered in Shenzhen, China, MingZhu Logistics Holdings Limited is a 4A-rated professional trucking service provider. Based on the Company's regional logistics terminals in Guangdong Province and Xinjiang Autonomous Region, MingZhu Logistics Holdings offers tailored solutions to our clients to deliver their goods through our network density and broad geographic coverage across the country by a combination of self-owned fleets tractors and trailers and subcontractors' fleets. For more information, please visit ir.szygmz.com.

Forward-Looking Statements

The statements in this press release regarding the Company's future expectations, plans and prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements regarding plans, goals, objectives, strategies, future events, expected performance, assumptions and any other statements of fact that have not occurred. Any statements that contain the words "may", "will", "want", "should", "believe", "expect", "anticipate", "estimate", "calculate" or similar statements that are not factual in nature are to be considered forward-looking statements. Actual results may differ materially from historical results or from those expressed in these forward-looking statements as a result of a variety of factors. These factors include, but are not limited to, the Company's strategic objectives, the Company's future plans, market demand and user acceptance of the Company's products or services, technological advances, economic trends, the growth of the trucking services market in China, the Company's reputation and brand, the impact of industry competition and bidding, relevant policies and regulations, fluctuations in China's macroeconomic conditions, and the risks and assumptions disclosed in the Company's reports provided to the CSRC (China Security Regulatory Commission) For these and other related reasons, we advise investors not to place any reliance on these forward-looking statements, and we urge investors to review the Company's relevant SEC filings for additional factors that may affect the Company's future results of operations. The Company undertakes no obligation to publicly revise these forward-looking statements subsequent to the filing of these documents as a result of changes in particular events or circumstances.

MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS

As of As of June 30, December 31, 2021 2020

USD USD

(Unaudited)

ASSETS

CURRENT ASSETS

Cash $ 4,693,923 $ 2,105,625

Restricted cash 9,500,000 9,500,000

Financial assets held for trading 77,440 -

Accounts receivable, net 2,506,448 5,343,716

Operating supplies 81,453 -

Prepayments 6,048,877 1,059,335

Other receivables 17,412,942 11,448,022

Amount due from related parties 1,503,948 741,340

Total Current Assets 41,825,031 30,198,038

PROPERTY AND EQUIPMENT, NET 2,884,414 3,448,109

OTHER ASSETS

Deferred tax assets - 31,852

Deposits 269,303 261,992

Total other assets 269,303 293,844

Total assets $ 44,978,748 $ 33,939,991

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

Short-term bank borrowings $ 5,761,546 $ 6,551,724

Accounts payable 652,191 1,415,591

Other payables and accrued liabilities 2,295,515 531,120

Amount due to related parties 144,496 993,846

Tax payable 1,172,496 2,722,409

Current portion of capital lease and financing obligations 65,191 51,135

Current maturities of loans from other financial institutions 183,285 235,487

Total current liabilities 10,274,720 12,501,312

OTHER LIABILITIES

Long-term loans from other financial institutions 31,531 136,400

Long-term portion of capital lease and financing obligations 85,780 27,989

Total other liabilities 117,311 164,389

Total liabilities 10,392,031 12,665,701

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS' EQUITY

Ordinary shares: $0.001 par value, 50,000,000 shares authorized, 15,687,375 and12,354,040 15,687 12,354shares issued and outstanding as of June 30, 2021 and December 31, 2020,respectively. *

Share subscription receivables (847,086) (847,086)

Additional paid-in capital 27,883,950 13,824,820

Statutory reserves 910,093 877,886

Retained earnings 6,517,767 6,905,718

Accumulated other comprehensive (loss) income 106,306 500,598

Total shareholders' equity 34,586,717 21,274,290

Total liabilities and shareholders' equity $ 44,978,748 $ 33,939,991

* Giving retroactive effect to the re-denomination and nominal issuance of shares effected on February 12, 2020, and the surrender and cancellation of shares effected on May 21, 2020.

MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME(Unaudited)

For the Six Months Ended June 30,

2020 2019

USD USD

REVENUES $ 9,602,080 $ 8,872,972

COSTS AND EXPENSES

Transportation costs 8,229,288 7,678,741

General and administrative expenses 932,409 579,139

Provision for doubtful accounts - 261,702

Sales and marketing expenses 53,443 41,376

Total costs and expenses 9,215,140 8,560,958

INCOME FROM OPERATIONS 386,940 312,014

OTHER (EXPENSES) INCOME

Interest expenses (235,268) (210,887)

Other expenses (657,745) -

Other income 191,048 109,623

Total other expenses, net (701,965) (101,264)

(LOSS) INCOME BEFORE INCOME TAXES (315,025) 210,750

PROVISION FOR INCOME TAXES 40,719 104,052

NET INCOME (355,744) 106,698

OTHER COMPREHENSIVE (LOSS) INCOME

Foreign currency translation adjustment (394,292) (62,324)

COMPREHENSIVE INCOME $ (750,036) $ 44,374

Weighted average shares used incomputation:

Basic* 14,387,374 9,000,000

Diluted* 15,985,367 9,000,000

(LOSS) EARNINGS PER SHARE - BASIC* $ (0.02) $ 0.01

(LOSS) EARNINGS PER SHARE - DILUTED* $ (0.02) $ 0.01

* Giving retroactive effect to the re-denomination and nominal issuance of shares effected on February 12, 2020, and the surrender and cancellation of shares effected on May 21, 2020.

MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY(Unaudited)

Retained Earnings

Accumulated Share Additional Statutory Other Shares* Amount Subscription Paid-in Reserve Unrestricted Comprehensive Total Receivables Capital Income (Loss)

USD USD USD USD USD USD USD

BALANCE, December 12,354,040 $ 12,354 $ (847,086) $ 13,824,820 $ 877,886 $ 6,905,718 $ 500,598 $ 21,274,29031, 2020

Net income (loss) - - - - - (355,744) - (355,744)for the period

Foreign currencytranslation - - - - - - (394,292) (394,292)adjustment

Appropriation tostatutory - - - - 32,207 (32,207) - -reserve

Issuance ofshares through 3,333,335 3,333 - 14,059,130 - - - 14,062,463public offering

BALANCE, 15,687,375 $ 15,687 $ (847,086) $ 27,883,950 $ 910,093 $ 6,517,767 $ 106,306 $ 34,586,717June 30, 2021

MINGZHU LOGISTICS HOLDINGS LIMITED AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Unaudited)

For the Six Months Ended June 30,

2021 2020

USD USD

Cash flows from operating activities:

Net (loss) income $ (355,744) $ 106,698

Adjustments to reconcile net income to net cash provided by operatingactivities:

(Gain) Loss on disposals of equipment (5,532) 2,721

Provision for doubtful accounts - 263,003

Amortization of deferred financing fees 57,199 34,911

Depreciation for property and equipment 747,316 835,463

Deferred income tax expenses 32,122 (76,596)

Changes in operating assets and liabilities

Accounts receivable 3,051,083 4,306,728

Operating supplies (81,282) -

Prepayments (9,370,842) (517,693)

Other receivables (5,888,995) (3,243,964)

Deposits (4,031) (3,709)

Accounts payable (776,760) (75,447)

Other payables and accrued liabilities 9,129,748 (366,206)

Tax payables (1,558,220) 217,752

Net cash (used in) provided by operating activities (5,023,938) 1,483,661

Cash flows from investing activities:

Purchases of equipment (57,204) (136,964)

Net cash used by investing activities (57,204) (136,964)

Cash flows from financing activities:

Proceeds from short-term bank borrowings 4,327,532 796,337

Repayment of short-term bank borrowings (5,185,311) (1,172,663)

Repayment of long-term bank borrowings - (85,322)

Repayments of loans from other financial institutions - (8,871)

Repayments of obligations under capital leases (236,116) (852,718)

Amounts advanced from related parties 4,158,734 5,195,613

Repayments to related parties (13,885,698) (5,083,005)

Proceeds from public offerings 18,474,763 -

Net cash provided by (used in) in financing activities 7,653,904 (1,210,629)

Effect of exchange rate change on cash 15,536 (6,310)

Net increase in cash and restricted cash 2,588,298 129,758

Cash and restricted cash at beginning of the period 11,605,625 223,507

Cash and restricted cash at end of the period $ 14,193,923 $ 353,265

Supplemental disclosure of cash flow information:

Interest paid $ 200,435 $ 154,324

Income tax paid $ 990,349 $ 74,889

Supplemental non-cash investing and financing information:

Non-cash capital leases to acquire revenue equipment $ (118,883) $ (23,649)

Uncollected receivable from disposal of revenue equipment $ 9,221 $ -

Professional fees paid by related parties - 143,862

Reconciliation to amounts on consolidated balance sheets:

Cash $ 4,693,923 $ 353,265

Restricted cash 9,500,000 -

Total cash $ 14,193,923 $ 353,265

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SOURCE MingZhu Logistics Holdings Limited