Net profit margin increased to 6.4% in 2023, up from 6.1% in 2022
Capital from IPO driving new customer acquisitions and production capacity expansion
International expansion and innovative product launches position LOBO for growth in 2024
WUXI, China, May 06, 2024 (GLOBE NEWSWIRE) -- LOBO EV Technologies Ltd. (Nasdaq: LOBO) ("LOBO" or the "Company"), an innovative electric vehicle manufacturer and seller, today announced its financial results for the fiscal year ended December 31, 2023.
2023 Highlights
Generated $15.5 million revenue in 2023, down from $18.3 million in 2022
Operating expenses decreased to $1.4 million in 2023, down from $1.5 million in 2022
Net profit margin increased to 6.4% in 2023, up from 6.1% in 2022
"In 2023, we navigated through several external challenges, yet our strategic initiatives, which capitalized on growing demand in international markets, allowed us to maintain a solid footing in a competitive landscape," stated Huajian Xu, CEO of LOBO. Additionally, our revenue figures in 2022 were unusually high due to a strategic liquidation of excess inventory accumulated during the COVID-19 pandemic. This one-time boost in 2022, where we cleared our stocks at wholesale, significantly elevated our revenue base for that year, making the comparison seem more pronounced in 2023. These moves were essential to optimize our inventory and set the stage for sustainable growth going forward."
Tong Zhu, CFO of LOBO, stated, "Despite top-line pressures, our net profit margin increased to 6.4% in 2023, up from 6.1% in 2022. This performance reflects not only improvements in operational efficiency but also better inventory management and overhead control. The initiatives we undertook for optimizing our product lineup and enhancing our production techniques have paid off, leading to improved profitability metrics that we believe are sustainable."
"With the successful capital influx from our March 2024 IPO, we are rapidly scaling our operations," continued Xu. "We've added over ten new dealer customers to our network this year, securing potential orders worth more than $5 million, with over $1 million in new paid deposits already received. To meet this surging demand, we've recently further expanded our production capabilities with the addition of two high-capacity assembly lines that will enter production at our new Wuxi facility in early May. The new assembly lines will enable us to add new in-demand products to our portfolio, and together with production improvements at our other assembly lines, our overall production capacity will be up nearly 20% in 2024."
At the recent Canton Fair, LOBO unveiled its latest innovations in electric mobility, highlighted by the new solar energy series of e-trikes, golf carts, and ATV/UVT models. These vehicles, designed to address the challenges of charging convenience and travel range, are pioneering solutions for the evolving needs of the market. Additionally, the introduction of a new delivery e-bike series tailored for the food and goods delivery sector aligns with the growing demand from major fast-food chains and retailers, tapping into the expansive parcel delivery market which delivered over 110 billion packages in China in 2022.
Xu concluded, "We expect to report year-over-year sales growth for the first half of 2024 as we focus on both our geographic expansion initiatives and continuing to service growing interest in our expanding product line up from the dealers in our distribution network. By leveraging our flexible production capacity and forging strategic customer partnerships, we are positioning LOBO for long-term success. As we advance, our vision is clear—to not only lead in innovation but also in driving sustainable, profitable growth while expanding our reach into new markets that show a strong potential for electric mobility."
The global e-bike, e-trike, and e-scooter market was estimated at a combined $28 billion in 2023 and is expected to surpass $39 billion by 2028, growing at a compound annual growth rate of 6.6%, according to data from the Business Research Company.
2023 Financial Results
Revenues for the years ended December 31, 2023 and 2022 were $15,474,918 and $18,298,565, respectively. Additionally, year-over-year performance was further impacted by a high base effect from the strategic liquidation of excess inventory, accumulated during the COVID-19 pandemic, during the second half of 2022.
Cost of revenues decreased by $2,006,360, or 13%, to $13,266,821 for the year ended December 31, 2023 from $15,273,181 for the year ended December 31, 2022. The percentage decrease in cost of revenue was consistent with the decrease in revenues.
Gross profits for the years ended December 31, 2023 and 2022 were $2,208,097 and $3,025,384, representing 14% and 17% of revenues, respectively.
Selling and marketing expenses were $610,487 and $585,772 for the years ended December 31, 2023 and 2022, respectively. Selling and marketing expenses primarily consist of salaries and benefits, office expense, and freight expense. The selling and marketing expenses increased primarily due to the Company expanding its salesforce.
General and administrative expenses decreased to $516,187 in the year ended December 31, 2023, down from $690,763 in the year ended December 31, 2022, reflecting cost containment strategies implemented during 2023.
Net income for the year ended December 31, 2023 was $986,471, compared to $1,115,260 in the year ended December 31, 2022, representing 6.4% and 6.1% net margins, respectively.