August 19, 2022 08:00 ET | Source: Ostin Technology Group Co., Ltd. Ostin Technology Group Co., Ltd.

NANJING, China, Aug. 19, 2022 (GLOBE NEWSWIRE) -- Ostin Technology Group Co., Ltd. (the "Company") (Nasdaq: OST), a supplier of display modules and polarizers in China, today reported its unaudited financial results for the six months ended March 31, 2022.

Mr. Tao Ling, Chairman and CEO of the Company, commented: “Despite a decrease in revenue for the six months ended March 31, 2022 amid the continuous lockdown in mainland China and the challenging global supply chain disruptions, we are able to deliver high quality products and services thanks to our dedicated workforce and focused innovation. We have demonstrated the resilience of our business in a challenging environment and continued investing our efforts in key geographies and advanced technologies. With the recent launch of new products and services and business initiatives, we expect to expand our customer base and continue to increase our competitiveness on the market.”

The following table presents revenue by major categories for the six months ended March 31, 2022 and 2021, respectively.

Revenues decreased by approximately $27.28 million or 31%, to approximately $60.09 million for the six months ended March 31, 2022 from approximately $87.37 million for the six months ended March 31, 2021. The decrease in revenues was primarily due to the decrease in revenue from both display modules and polarizers resulting from the continuous lockdown in mainland China from late 2021 to the first quarter in 2022.

The following table lists the Company’s revenues by geographic region for the six months ended March 31, 2022 and March 31, 2021. To mitigate impact of the fluctuation of exchange rates and shipping disruption caused by the epidemic, the Company shifted more sales to domestic markets, and therefore, the Company’s sales to Hong Kong and Taiwan decreased significantly during the six months ended March 31, 2022 as compared to the same period last year.

Cost of revenues decreased by approximately $25.78 million or 33%, to approximately $51.46 million for the six months ended March 31, 2022 from approximately $77.24 million for the six months ended March 31, 2021. The decrease in total cost of revenues was in line with the Company’s decreased revenue.

Overall gross profit margin was 14% for the six months ended March 31, 2022, as compared to 12% for the six months ended March 31, 2021. The increase in gross profit was mainly due to the fact that the Company’s new research and development services had a higher gross margin.

Selling and marketing expenses decreased by approximately $0.99 million, or 41%, to approximately $1.42 million for the six months ended March 31, 2022, as compared to approximately $2.41 million for the six months ended March 31, 2021. The decrease in selling and marketing expenses mainly was mainly due to (i) the decrease in revenue and (ii) decrease in sales commissions for market development attributable to stabilization of new customers developed in the past two years.

General and administrative expenses increased by approximately $0.86 million, or 32%, to approximately $3.55 million for the six months ended March 31, 2022, as compared to approximately $2.69 million for the six months ended March 31, 2021. The increase in G&A expenses was due to the increase in professional fees during the Company’s IPO process and the increase in administrative expenses in complying with regulations imposed by local government to control COVID-19.

The Company’s research and development expenses decreased by approximately $0.97 million to $2.03 million for the six months ended March 31, 2022 from approximately $3.00 million for the same period in 2021. The decrease was mainly attributable to the COVID-19 situation. On the one hand, the shipping was delayed and the materials needed for the Company’s research and development were not delivered in time; on the other hand, the Company’s employees, including research and development staff, had to stay at home for months due to the COVID-19 lockdown and quarantine requirements of the PRC local governments where the Company’s employees are based in. As a result, some of the Company’s research and development projects were either suspended or slowed down and therefore the Company incurred less research and development expenses.

As a result of the foregoing, the Company recorded net income of $1.20 million and $1.45 million for the six months ended March 31, 2022 and 2021, respectively.

Cash and cash equivalents were $3.53 million as of March 31, 2022, as compared to $2.14 million as of March 31, 2021.

During the six months ended March 31, 2022, the Company continued to promote development of new products and has introduced a protection film to its customers. The production film can be attached to the surface of products, such as OLED panels and wafers, to prevent damages from dust and scratch and will be manufactured through the production facilities the Company used for polarizers. The protection film is currently being tested by the Company’s customers and is expected to be put into production by the end of 2022.

In an effort to increase its profits as well as taking full advantage of its resources and expertise in the display panel industry, the Company began to manufacture and sell display products for end users, such as commercial display and consumer electronics products, which generally have a higher profit margin than the Company’s display module products. The Company has strengthened its efforts to market end products, including, but not limited to, hiring of more salespersons, providing training for the sales force targeting end users and increasing expenditures on electronics exhibitions and advertisements.

In addition, during the six months ended March 31, 2022, the Company began to generate revenue from providing research and development services related to video conference systems and smart photography systems. To diversify its source of revenue, the Company will continue to leverage its strong research and development capabilities and accumulated expertise in the display module field and develop customized solutions for its clients.

About Ostin Technology Group Co., Ltd.

Founded in 2010, the Company is a supplier of display modules and polarizers in China. The Company designs, develops and manufactures TFT-LCD display modules in a wide range of sizes and customized sizes which are mainly used in consumer electronics, outdoor LCD displays and automotive displays. The Company also manufactures polarizers used in the TFT-LCD display modules.

For more information, please visit http://www.austinelec.com/.

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may, "will, "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding lingering effects of the Covid-19 pandemic on the Company’s businesses, including disruptions to supply chain, the Company’s ability to deliver customer orders timely, ability to raise capital, ability to develop and sell new products and services, ability to execute its business plans, fluctuations in earnings, fluctuations in foreign exchange rates , the Company’s ability to attract and retain skilled professionals, client concentration, and general economic conditions affecting the Company’s industry and other factors discussed in the “Risk Factors” section of the registration statement filed with the SEC. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:

Ms. Janice Wang, Managing Partner

Phone: +1 470-940-3308 (from U.S.)

OSTIN TECHNOLOGY GROUP CO., LTD. CONDENSED CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2022 AND SEPTEMBER 30, 2021 (IN U.S. DOLLARS, EXCEPT FOR NUMBER OF SHARES DATA)

OSTIN TECHNOLOGY GROUP CO., LTD. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED MARCH 31, 2022 AND 2021 (IN U.S. DOLLARS, EXCEPT SHARES DATA)

OSTIN TECHNOLOGY GROUP CO., LTD. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED MARCH 31, 2022 AND 2021 (IN U.S. DOLLARS)