Nisun International Reports Unaudited Financial Results for the First Half of 2023

SHANGHAI, Dec. 20, 2023 /PRNewswire/ — Nisun International Enterprise Development Group Co., Ltd ("Nisun" or the "Company") (Nasdaq: NISN), a provider of innovative comprehensive solutions through an integration of technology, industry, and finance, today announced its unaudited financial results for the six months ended June 30, 2023.

Mr. Xiaoyun Huang,  Chief Executive Officer of Nisun, commented, "We are pleased to announce our revenues remained resilient for the six months ended June 30, 2023, with an increase of 8% to $126.9 million from the same period of the prior year, despite the downward pressure and widespread business contraction across industries in China. Our cash and cash equivalents experienced an aggregate growth of 66%, as compared to December 31, 2022, which reflected our robust operational results. We have continued to proactively rebalance our business portfolio to optimize our resources and bolster our competitiveness in the supply chain sector. Leveraging our innovative solutions and integrated resources, we are committed to actively exploring business opportunities through strategic collaborations to broaden our market presence, diversify our product and service offerings, and boost our profitability. In addition, we will continue to implement the marketing strategies that we believe will allow us to develop our brand awareness and better position ourselves within the market. Moving forward, we will continue to align our business model and operations with our core value for greater performance and remain dedicated to providing our clients with effective and high-quality supply chain solutions. We firmly believe that our strategic business optimization and expansion will enhance our competitive edges, establish a strong foundation for future growth and bring long-term benefits for our shareholders."

Financial Results for the Six Months Ended June 30, 2023

All comparisons made on a year-over-year ("yoy") basis.

Revenue

• Total revenue increased by 8% to $126.9 million from $118.0 million in the six months ended June 30, 2022, with increases in revenues from financing services offset by a decrease in revenue from supply chain trading business.
• Revenue from Supply Chain Trading Business decreased by 6% to $66.2 million from $70.7 million in prior year period, primarily due to the reduction of the Company’s the chemical products supply chain business and its further focus on agricultural products supply chain trading and services as a result of the changes in its business strategies. 
• Revenue from Financing Services increased by 28% to $60.7 million from $47.3 million in prior year period.
• Revenues generated from the Small and Medium Enterprise (SME) financing solutions business increased by 29% to $58.0 million from $44.8 million in the prior year period, primarily due to increased demand from SME customers seeking alternative financing solutions to bank financing.
• Revenue generated from supply chain financing solutions increased by 10% to $2.7 million from $2.5 million in the prior year period, primarily due to extended business lines and increased supply chain transaction volume.

Cost of revenue

Cost of revenue was $107.1 million, compared to $96.5 million in the prior year period, representing an increase of 11%. The increase was primarily attributable to the increase in personnel costs as a result of the growth in the scale of the SME financing solutions business and the increase in the cost of sales of the supply chain trading business primarily due to the increase in the sales costs incurred by a subsidiary acquired in 2022, Qingdao Sailang International Trade Co., Ltd.

Gross Profit

Gross profit decreased by 8% to $19.8 million from $21.6 million in the prior year period, due to the increases in the costs of revenue. Gross margin was 15.6% and 18.3% for the six months ended June 30, 2023 and 2022, respectively. The decrease in gross margin was primarily due to the increase in direct cost of revenue from supply chain trading business. 

Operating Expenses 

Total operating expense increased by 31% to $8.2 million from $6.3 million in the prior year period. The increase was primarily attributable to the significant increases in selling expenses as a result of the addition of sales channels for marketing and distribution purposes.

• Selling expenses increased by 908% to $2.6 million from $0.3 million in the prior year period. The increase in selling expenses was mainly due to increased advertising channels.
• General and administrative expenses increased by 6% to $5.5 million from $5.2 million in the prior year period. The increase in general and administrative expenses was mainly because of increased professional fees and company personnel compensation in the first half of fiscal 2023.
• R&D expenses decreased by 58% to $0.3 million from $0.8 million in the prior year period. The decrease in the R&D expenses was primarily due to the fact that there was no new R&D projects during the six months ended June 30, 2023.
• Bad debt expenses were $(0.2) million for the first half of 2023. There were no bad debt expenses in the relevant periods. The decrease in the bad debt expenses was because in the six months ended June 30, 2023, we recovered the bad debts accrued during the second half of fiscal 2022.

Other Income (Expense), net

The Company had a net other income of $2.4 million, compared to $2.8 million in the prior year period. The decrease was due to foreign exchange gain realized from capital injection into PRC operating entities in the first half of 2022, whereas there was no related exchange gain in the same period of 2023.  

Net Income 

In the six months ended June 30, 2023, the Company achieved a net income of $11.4 million, compared to $14.4 million in the same period of the prior year, primarily attributable to the decrease in gross profit from the supply chain business.

Net Income per Share

Net income per share was $2.87 in the six months ended June 30, 2023, compared to $3.55 in the prior year period. The weighted average number of shares was 3,943,288 and 3,991,263 in the six months ended June 30, 2023 and 2022, respectively.

Financial Condition and Cash Flow

As of June 30, 2023, the Company had cash, cash equivalents and restricted cash of $106.6 million, compared to $67.3 million as of December 31, 2022. However, the Company’s short-term investment was $18.7 million as of June 30, 2023, compared to $11.7 million as of December 31, 2022.

In the six months ended June 30, 2023, net cash provided by operating activities was approximately $57.2 million, net cash used in investing activities was $7.0 million, and net cash used in financing activities was $8.2 million.

In the six months ended June 30, 2022, net cash used in operating activities was approximately $30.4 million, net cash provided by investing activities was $24.1 million, and net cash provided by financing activities was $9.6 million.

About Nisun International Enterprise Development Group Co., Ltd

Nisun International Enterprise Development Group Co., Ltd (NASDAQ: NISN) is a technology-driven, integrated supply chain solutions provider focused on transforming the corporate finance industry. Leveraging its industry experience, Nisun is dedicated to providing professional supply chain solutions to Chinese and foreign enterprises and financial institutions. Through its subsidiaries, Nisun provides users with professional solutions for technology supply chain management, technology asset routing, and digital transformation of tech and finance institutions, enabling the industry to strengthen and grow. At the same time, Nisun continues to deepen the field of industry segmentation through industrial and financial integration, by cultivating/creating an ecosystem of openness and empowerment. Nisun has built a linked platform that incorporates supply chain, banking, securities, trust, insurance, funds, state-owned enterprises, among other businesses. Focusing on industry-finance linkages, Nisun aims to serve the upstream and downstream of the industrial supply chain while also assisting with supply-side sub-sector reform. For more information, please visit http://ir.nisun-international.com. 

Cautionary Note Regarding Forward-Looking Statements

This press release contains information about Nisun’s view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets into its portfolio of products and services, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. Nisun encourages you to review other factors that may affect its future results in Nisun’s registration statement and in its other filings with the Securities and Exchange Commission. Nisun assumes no obligation to update or revise its forward-looking statements as a result of new information, future events or otherwise, except as expressly required by applicable law.

Contacts:

Nisun International Enterprise Development Group Co., Ltd
Investor Relations
Tel: +86 (21) 2357-0055
Email: ir@cnisun.com 

Ascent Investor Relations LLC
Tina Xiao
Email: investors@ascent-ir.com
Tel: +1 (646) 932-7242