Erayak Power Solution Group Inc. (“Erayak”) (RAYA), a leading manufacturer, designer, and exporter of high-quality products in the power supply industry, announced financial results for the fiscal
year ended December 31, 2022.
Erayak Chairman & CEO, Mr. Lingyi Kong stated, "We are pleased to report our first earnings report as a public company. Our financial results represent continued momentum in our power solution products, particularly our generator products, which delivered a strong sales result in Europe. This bodes well in our pursuit of expanding our markets globally. We will continue to execute our strategy and capitalize on the positive demand trends for quality and reliable power solution products, and further invest in our research and development efforts to bring new and innovative products to the market.”
2022 Fiscal Year Financial Highlights:
- Revenues increased by approximately $8.3 million, or 44.5%, to approximately $26.9 million.
- Gross profit increased by approximately $0.9 million, or 15.7%, to approximately $6.6 million.
- Net income increased by approximately 2.4% to $3.5 million, or 12.9% of revenue.
Operations Summary:
- Revenues increased by approximately $8.3 million, or 44.5%, to approximately $26.9 million for the year ended December 31, 2022, from approximately $18.6 million for the year ended December 31, 2021. The increase in revenues was primarily driven by the continuous impact of the energy crisis that has significantly increased demand for generators, especially in Europe. For the year ended December 31, 2022, sales to domestic customers increased by approximately $7.4 million, representing a 9.9% growth compared to the previous fiscal year.
- Gross profit increased by approximately $0.9 million, or 15.7%, to approximately $6.6 million for the year ended December 31, 2022, from approximately $5.7 million for the year ended December 31, 2021. Gross profit margin was 24.6% for the year ended December 31, 2022, compared to 30.7% for the year ended December 31, 2021. The decrease in gross margin was primarily due to the small profit but quick turnover sales policy on generators, which accounted for about 43.8% of total sales.
- General and administrative expenses increased by approximately $0.2 million, or 34.6% to approximately $0.9 million for the year ended December 31, 2022, compared to approximately $0.7 million for the year ended December 31, 2021. The increase in G&A expenses was mainly due to increased expenses in consulting services for lean manufacturing and management improvement in factory operation.
- Selling and marketing expenses increased by approximately $0.2 million, or 42.2%, to approximately $0.7 million for the year ended December 31, 2022, compared to approximately $0.5 million for the year ended December 31, 2021. The increase in selling and marketing expenses was mainly due to the increased cost of testing and certification on exported products.
- Research and development expenses decreased by approximately $0.1 million, or 5.5%, to approximately $0.9 million for the year ended December 31, 2022, compared to approximately $1.0 million for the year ended December 31, 2021. The decrease in R&D expenses was mainly due to decreased contract services and supplies, depreciation, and other expenses related to R&D activities.
- Net income increased by approximately $0.1 million, or 2.4%, to approximately $3.5 million for the year ended December 31, 2022, from approximately $3.4 million for the year ended December 31, 2021.
Cash Flows Summary:
- As of December 31, 2022, and 2021, Erayak had cash and cash equivalents of $7.1 million and $5.2 million, respectively.
- Net cash used in operating activities for the fiscal year ended December 31, 2022, was approximately $4.2 million, which was primarily attributable to a net profit of approximately $3.5 million, adjusted for non-cash items for approximately $0.8 million and adjustments for changes in working capital approximately $8.4 million.
- Net cash used in investing activities was approximately $4.9 million for the year ended December 31, 2022, which was primarily attributable to the addition of fixed assets for production needs during the fiscal year and an advance payment on potential overseas land purchase for the purpose of business expansion in North America.
- Net cash provided by financing activities was approximately $11.3 million for the year ended December 31, 2022. It was primarily attributable to the net proceeds from share issuances of approximately $10.1 million.
Balance Sheet Summary:
- Total assets were $37.6 million as of December 31, 2022, compared to $23.5 million as of December 31, 2021.
- Total liabilities were $18.3 million as of December 31, 2022, compared to $16.6 million as of December 31, 2021.
- Total Shareholders’ equity was $19.3 million as of December 31, 2022, compared to $6.9 million as of December 31, 2021.
