Tungray Technologies Inc Reports 2024 Full Year Financial Results

Cost-Cutting Measures:
The Company has implemented targeted cost control actions aimed at reducing expenses, enhancing operational efficiency, and renegotiating supplier contracts.

These actions include:

• Identifying and utilizing high-trade volume suppliers.
• Leveraging volume to negotiate favorable rates for common-use components.

Revenue Enhancement:
To drive sales growth, the Company is exploring potential horizontal strategic partnerships to access new, high-value capabilities.

These initiatives include:

• Introducing new lines of business through potential partnerships with existing companies.
• Utilizing the "market-for-tech" model to leverage Singapore's hub position for regional business expansion.
• Exploring technologies and services such as metal 3D printing for precision engineering, standardized manufacturing of medical components, and contract repair work for aviation components, such as aircraft engine fan blades and turbines.

• Enhancing sales and market penetration by hiring a dedicated business-focused market and sales manager. This initiative will focus on:
  • Increasing market penetration of non-printer related markets in the Southeast Asia (SEA) region.
  • Focusing primarily on the semiconductor, automotive and non-printer related consumer product sectors.

Management Commentary

Mr. Wanjun Yao, Chairman and Chief Executive Officer of Tungray, commented, "Despite ongoing pressure on revenue and profitability in 2024, we successfully expanded our customer base. This pressure was partly driven by lower revenue per customer, resulting from shifts in sales mix, pricing strategies, order volumes, and broader market conditions. For example, as of year 2024, China and Singapore's manufacturing automation industry was experiencing intense price competition, driven by overcapacity, economic pressures. To address these challenges, we remain focused on strengthening customer retention, enhancing service offerings, and expanding high-value customer relationships to support sustainable revenue growth."

"While navigating these market dynamics, we remain committed to delivering sustainable, innovative growth, underscored by a 34.3% increase in R&D year-over-year. In 2024, this investment supported the launch of over a dozen new projects aimed at expanding our product portfolio, accelerating innovation, and strengthening our competitive position. These ongoing efforts are designed to ensure we are well-positioned for long-term success as the market stabilizes."

"Looking ahead to 2025 and beyond, we continue to adapt to an evolving market landscape. We are actively exploring 3D metal printing solutions aimed at delivering value-added solutions to both existing and prospective customers in high-end sectors such as commercial aviation, offshore marine, and oil & gas industries. Our focus remains on delivering long-term shareholder value while strategically positioning the company for sustainable growth and success in a dynamic market environment," Mr, Yao added.

Fiscal 2024 Financial Results

Total Revenues

Total revenues decreased by 10.8% to $12.8 million for the year ended December 31, 2024, compared to $14.4 million for the year ended December 31, 2023.

• Revenues from customized products decreased by $1.6 million or 13.6% for the year ended December 31, 2024, primarily driven by the sales price decrease due to competitive dynamics and strategic decisions to retain market share.
• Revenues from standardized products increased by $42,000, or 1.6% for the year ended December 31, 2024, mainly due to the increase in sales volume, offset by the reduction in average selling prices across key production lines to retain market share.

Cost of Revenues

Total costs decreased by 5.7% to $7.2 million for the year ended December 31, 2024, compared to $7.7 million for the year ended December 31, 2023. 

• The cost of revenues for customized products down by $0.5 million, or 9.9% for the year ended December 31, 2024, driven by sales volume decrease.
• The cost of revenues for standardized products increased by $93,000, or 4.1% for the year ended December 31, 2024, as a result of improved sales volume.

Gross Profit

Gross profit was $5.6 million for the year ended December 31, 2024, representing a decrease of 16.6% year over year from $6.7 million for the year ended December 31, 2023. Gross margin was 43.7% for the year ended December 31, 2024, compared to 46.7% for 2023.

• Gross profit for customized products was $5.3 million for the year ended December 31, 2024, a decrease of 16.8% as compared to $6.3 million for the year ended December 31, 2023. Gross margin for customized products was 52.1% for the year ended December 31, 2024, and 54.1% for the year ended December 31, 2023. The decrease was mainly due to the decrease of unit selling prices and the increase of labor costs.
• Gross profit for standardized products was $0.4 million for the year ended December 31, 2024 compared to $0.4 million for the year ended December 31, 2023. Gross margin for standardized products was 12.0% for the year ended December 31, 2024, and 14.2% for the year ended December 31, 2023. The decrease was due to pricing decrease for retaining the market share.

Operating Expenses

Total operating expenses were $6.3 million for the year ended December 31, 2024, representing an increase of 11.4% year over year from $5.6 million for the year ended December 31, 2023.

• Selling expenses increased by $0.2 million or 41.3% from $0.4 million for the year ended December 31, 2023 to $0.6 million for the year ended December 31, 2024. The increase was mainly due to higher advertising, travel, hospitality and compensation expense related to business expansion and efforts to enhance product quality.
• General and administrative expenses increased by $0.2 million or 4.5% from $4.4 million for the year ended December 31, 2023 to $4.6 million for the year ended December 31, 2024. The increase was mainly due to the increase in (i) professional service fee of approximately $244,000 associated with IPO which are not capitalized, (ii) depreciation expense of approximately $152,000 due to new purchase of machines, and (iii) insurance expenses of approximately $89,000 for Directors and Officers Liability insurance during the year ended December 31, 2024. The increase was offset by the decrease of (i) salaries and wages expenses of approximately $173,000 due to workforce elimination to cut costs during the year ended December 31, 2024, (ii) travel expense, meals and entertainment expense of approximately $72,000 for cost enhancement.
  R&D expenses increased by 34.3% for the year ended December 31, 2024 as compared with the year ended December 31, 2023. The increase was driven by the previously announced initiatives aimed at strengthening product offerings, advancing innovation, and maintaining market competitiveness.

(Loss) Income from operations

Loss from operations was $0.7 million for the year ended December 31, 2024, compared to income from operations of $1.1 million for the year ended December 31, 2023.

Total Other Income, net

Total other income was $0.4 million for the year ended December 31, 2024, compared to total other income of $0.2 for the year ended December 31, 2023.

Income tax expense

Income tax expense decreased by approximately $0.3 or 48.3%, from $0.5 million for the year ended December 31, 2023 to $0.2 million for the year ended December 31, 2024.

Net (Loss) Income

Net loss was $0.6 million for the year ended December 31, 2024, compared to net income of $0.8 million for the year ended December 31, 2023.

About Tungray Technologies Inc

Tungray Technologies Inc is an Engineer-to-Order (ETO) company that provides customized industrial manufacturing solutions to original equipment manufacturers (OEMs) in the semiconductors, printers, electronics, and home appliances industries. With research, development and manufacturing bases in Singapore and China, Tungray designs, develops, and delivers a wide range of industrial products ranging from customized manufacturing machineries, direct drive and linear direct current motors, to induction welding equipment. As an ETO company with more than two decades of experience, Tungray takes pride in its ability to deliver quality customized industrial solutions that fulfil its customers' unique needs and specifications. For more information, visit the Company's website at http://tungray.com/.

Forward-Looking Statements

All statements other than statements of historical fact in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on current expectations and projections about future events and financial trends that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can identify these forward-looking statements by words or phrases such as "may," "will," "expect," "anticipate," "aim," "estimate," "intend," "plan," "believe," "potential," "continue," "is/are likely to" or other similar expressions. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's filings with the SEC.

For more information, please contact:

Investor Relations:
Bill Zima
Email: tungray@icrinc.com

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SOURCE Tungray Technologies Inc