Nisun International Reports Financial Results for Fiscal Year 2022

SHANGHAI, Aug. 8, 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 financial results for the fiscal year ended December 31, 2022.

Mr. Xiaoyun Huang, Chief Executive Officer of Nisun, commented, "We are pleased to end fiscal year 2022 with solid financial performance, despite the uncertain market conditions during this period. Our total revenue reached $234.2 million in fiscal year 2022, representing an increase of 46% from fiscal year 2021, demonstrating our strong capabilities to execute strategic initiatives successfully. In fiscal year 2022, we have been committed to scaling our supply chain trading business, particularly agricultural supply chain operations. While acknowledging the challenges in our existing business, we have been actively seeking qualified partners for new business opportunities. As mentioned in our recent press releases, many of our new business partnerships established beyond their infancy, we expect to distinguish ourselves from other industry participants by prioritizing the expansion of our business, providing quality supply chain services to our clients and improving our brand awareness. In the second half of 2023 and beyond, we will continue to deepen the comprehensive coverage and dynamic cycle of the agricultural supply chain to support China's grand strategy of rural revitalization. We will also continue to focus on enhancing our operating efficiency, aiming to sustain our long-term competitiveness in the market and creating long-term value for our shareholders."

Financial Results for the Fiscal Year Ended December 31, 2022

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

Revenue

• Total revenue increased by 46% to $234.2 million from $160.2 million in fiscal year 2021, primarily with increases in revenue from supply chain trading sales. The increase in total revenues was primarily due to the Company's ability to expand its business, attract higher quality customers, and achieve a higher customer retention.
• Revenue from Supply Chain Trading Business increased by 110% to $143.4 million from $68.1 million in fiscal year 2021, primarily due to the Company's expansion of its supply chain trading business in various industries such as the agricultural industry and retail industry.
• Revenue from Financing Services slightly decreased by 1% to $90.8 million from $92.1 million in the prior year period.
• Revenues generated from the Small and Medium Enterprise (SME) financing solutions business increased modestly to $87.3 million from $87.1 million in the prior year period.
• Revenue generated from supply chain financing solutions decreased by 28% to $3.5 million from $4.9 million in the prior year period, primarily due to the reason that the Company shifted the focus of business development from the supply chain financing solutions to supply chain trading.

Cost of revenue

Cost of revenue was $197.1 million, compared to $106.2 million in the prior year period, representing an increase of 86%. The increase was primarily attributable to increases in cost of revenue from supply chain trading business.

Gross Profit

Gross profit decreased by 31% to $37.0 million, from $54.0 million in the prior year period. The decrease was primarily due to the significant increase in the costs of third-party channels for SME financing solution services, adjusted by an increase in the gross profit of the Company's supply chain trading business by 393%, which increase was primarily a result of the Company's ability to expand its business, attract higher quality customers, and achieve higher customer retention. Gross margin was 15.8% and 33.7% for the fiscal year ended December 31, 2022 and 2021, respectively.

Operating Expenses

Total operating expenses increased by 22% to $19.3 million from $15.9 million in the prior year period. The increase was primarily attributable to increases in bad debt expenses, offset by the decrease in selling expenses, general and administrative expenses and research and development ("R&D") expenses.

• Selling expenses decreased by 15% to $2.0 million from $2.3 million in the prior year period. The decrease in selling expenses was mainly due to the Company's building up its network in supply chain trading business in various industries and cutting its marketing expenses.
• General and administrative expenses decreased by 3% to $11.3 million from $11.6 million in the prior year period. The decrease in general and administrative expenses was mainly because the Company paid a one-time agreement cancellation fee of $2.5 million in 2021, adjusted by the impairment loss on goodwill incurred in 2022 and increased expenses on business expansion.
• R&D expenses was $1.6 million, unchanged from fiscal year 2021.
• Bad debts expenses were $4.5 million, as compared to $0.3 million in the prior year period. The bad debts expenses incurred in 2022 were primarily because certain suppliers were not be able to fulfill their contractual obligations due to the COVID outbreaks in 2022.

Other Income (Expense), net

The Company had a net other income of $4.8 million, compared to $2.6 million in the prior year period. The increase was due to an increase in investment income from the short-term investments and investment in limited partnership.

Net Income

In fiscal year 2022, the Company achieved a net income of $17.8 million, compared to $30.5 million in the prior year. The decrease was primarily due to the significant increase in the costs of third-party channels.

Net Income per Share

Net income per share was $4.42 in fiscal year 2022, compared to $14.13 in the prior year period. The weighted average number of shares was 3,986,359 and 2,150,683 in the fiscal year ended December 31, 2022 and 2021, respectively.

Financial Condition and Cash Flow

As of December 31, 2022, the Company had cash, cash equivalents and restricted cash of $67.3 million, compared to $91.6 million as of December 31, 2021.

In the fiscal year ended December 31, 2022, net cash used in operating activities was approximately $29.0 million, net cash provided by investing activities was $17.8 million, and net cash used in financing activities was $8.3 million.

In the fiscal year ended December 31, 2021, net cash provided by operating activities was approximately $23.9 million, net cash used in investing activities was $25.3 million, and net cash provided by financing activities was $70.5 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 rich 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: [email protected]

Ascent Investor Relations LLC
Tina Xiao
Email: [email protected]
Tel: +1 (917) 609-0333