HUHUTECH International Group Inc. Announces Fiscal Year 2024 Financial Results

HUHUTECH International Group Inc. (Nasdaq: HUHU) (the “Company” or “HUHUTECH”), a professional provider of factory facility management and monitoring systems, today announced its financial results for the fiscal year ended December 31, 2024.

Mr. Yujun Xiao, Chief Executive Officer of HUHUTECH, commented, “Fiscal year 2024 was a year of expansion as we strengthened our market presence both domestically and internationally, laying a solid foundation for long-term success. We delivered $18.1 million in total revenue, representing an 8.5% increase year-over-year, driven by robust growth in product sales and system integration projects, especially in Japan. Gross profit rose 21.1% to $6.6 million, with gross margin improving to 36.1% from 32.3% in the same period last year.

Our strategic expansion in the Japanese market was underscored by the successful launch of our semiconductor industry-supporting warehousing and logistics center in Kumamoto. In line with Japan's Semiconductor Revival Initiative, the facility supports the region's growing semiconductor manufacturing clusters and reflects our commitment to building scalable infrastructure in high-growth markets. Another major milestone in 2024 was our successful initial public offering. With our Nasdaq listing,we are better positioned to accelerate innovation, enhance brand visibility, and pursue global opportunities. This achievement also underscores our commitment to long-term value creation through global market expansion.”

Mr. Xiao continued, “Looking ahead, we will continue to build on this momentum by expanding our marketing and sales teams, deepening client relationships, and advancing targeted R&D-particularly in exploring the development of Factory Management and Control System and related new equipment. We also plan to broaden our product and service offerings to further penetrate key markets. Through these efforts, we are confident in delivering innovative solutions that improve efficiency, elevate performance, and set new standards in factory facility management across an evolving industrial landscape.”

Fiscal Year 2024 Financial Highlights

— Total revenue was $18.1 million in fiscal year 2024, an increase of 8.5% from $16.7 million in fiscal year 2023.

— Gross profit was $6.6 million in fiscal year 2024, an increase of 21.1% from $5.4 million in fiscal year 2023.

— Gross margin was 36.1% in fiscal year 2024, increased from 32.3% in fiscal year 2023.

— Net loss was $1.9 million in fiscal year 2024, compared to net income of $2.3 million in fiscal year 2023.

— Basic and diluted loss per share were $0.1 in fiscal year 2024, compared to basic and diluted earnings per share of $0.47 in fiscal year 2023.

Fiscal Year 2024 Financial Results

Revenues

Total revenue was $18.1 million in fiscal year 2024, an increase of 8.5% from $16.7 million in fiscal year 2023. The overall increase in total revenue was primarily attributable to a $0.9 million increase in revenue from product sales and a $0.3 million increase in revenue from system integration projects.

— Revenue from system integration projects was $16.6 million in fiscal year 2024, an increase of 2.0% from $16.3 million in fiscal year 2023. The increase was due to the expansion of the Company's business in the Japanese market in fiscal year 2024.

— Revenue from engineering consulting services was $0.4 million in fiscal year 2024, an increase of 76.3% from $0.2 million in fiscal year 2023. The significant increase was a result of the system integration projects as the Company provided consulting services as auxiliary service to some system integration clients in need.

— Revenue from product sales was $1.2 million in fiscal year 2024, an increase of 340.3% from $0.3 million in fiscal year 2023. The increase of product sales revenue was due to increase in product needs along with system integration projects in fiscal year 2024.

Cost of Revenues

Cost of revenue was $11.6 million in fiscal year 2024, an increase of 2.4% from $11.3 million in fiscal year 2023.

Gross Profit and Gross Margin

Gross profitwas $6.6 million in fiscal year 2024, an increase of 21.1% from $5.4 million in fiscal year 2023. The increase of gross profit in fiscal year 2024 was mainly due to the increase of gross profit from system integration projects.

Gross margin was 36.1% in fiscal year 2024, increased from 32.3% in fiscal year 2023.

Operating Expenses

Total operating expenses were $8.1 million in fiscal year 2024, an increase of 149.6% from $3.2 million in fiscal year 2023.

— Selling expenses were $2.1 million in fiscal year 2024, an increase of 137.2% from $0.9 million in fiscal year 2023. The increase was mainly due to the operation ofHUHU Technology Co., Ltd. (“HUHU Japan”).

— General and administrative expenses were $3.2 million in fiscal year 2024, an increase of 205.0% from $1.0 million in fiscal year 2023. The increase was mainly due to the operation ofHUHU Japan.

— Research and development expenses were $2.9 million in fiscal year 2024, an increase of 114.7% from $1.3 million in fiscal year 2023. The increase was due to (1) a decrease of $0.1 million in material costs; and (2) an increase of $1.6million in technical consulting fees charged by a third party.

Net Loss

Net loss was$1.9 million in fiscal year 2024, compared to net income of $2.3 million in fiscal year 2023.

Basic and Diluted Loss per Share

Basic and diluted loss per share were $0.1 in fiscal year 2024, compared to basic and diluted earnings per share of $0.47 in fiscal year 2023.

Financial Condition

As of December 31, 2024, the Company hadcash of $3.1 million, compared to $2.7 million as of December 31, 2023.

Net cash used in operating activities in fiscal year 2024 was $3.0million, compared to net cash provided by operating activities of $3.0 million in fiscal year 2023.

Net cash used in investing activities in fiscal year 2024 was $3.8million, compared to $1.2 million in fiscal year 2023.

Net cash provided by financing activities in fiscal year 2024 was $7.5million, compared to net cash used in financing activities of $0.6 million in fiscal year 2023.

Recent Development

On October 23, 2024, the Company completed its initial public offering (the “Offering”) of 1,050,000 ordinary shares at a public offering price of $4.00 per share. On November 19, 2024, the representative of the underwriters of the Offering partially exercised their over-allotment option to purchase an additional 123,413 ordinary shares at the public offering price of $4.00 per share. The gross proceeds were $4.69 million, before deducting underwriting discounts and commissions, and other expenses. The Company's ordinary shares began trading on the Nasdaq Capital Market on October 22, 2024, under the ticker symbol “HUHU.”

About HUHUTECH International Group Inc.

HUHUTECH International Group Inc. is a professional provider of factory facility management and monitoring systems. Through its subsidiaries in China and Japan, HUHUTECH designs and provides customized high-purity gas and chemical production system and equipment. The Company's products mainly include high-purity process systems (HPS) and factory management control systems (FMCS), which effectively increase operation efficiency by using standardized module software. The modularity of HUHUTECH's software solution reduces the errors caused by frequent updates of the program. As a nationally recognized brand, HUHUTECH serve major players in the pan-semiconductor industry. Its products and services are widely used by semi-conductor manufacturers, LED and micro-electronics factories, as well as some pharmaceutical, food and beverage manufacturers. For more information, please visit the Company's website: ir.huhutech.com.cn.

Forward-Looking Statements

Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” or other similar expressions in this prospectus. The Company undertakes no obligation to update or revise publicly any 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 registration statement and other filings with the U.S. Securities and Exchange Commission (“SEC”).

For more information, please contact:

HUHUTECH International Group Inc. Investor Relations Department Email: ir@huhutech.com.cn

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

HUHUTECH INTERNATIONAL GROUP INC.AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETS As of December31, 2024 2023ASSETSCURRENT ASSETS:Cash $ 3,102,865 $ 2,739,530Restricted cash 220,261 107,129Notes receivable 254,092 -Accounts receivable, net 9,633,289 8,708,075Inventories 1,175,241 530,048Advance to vendors 150,637 64,750Prepayments and other assets, net 80,137 181,371TOTAL CURRENT ASSETS 14,616,522 12,330,903Property, plant and equipment, net 4,978,080 1,528,982Intangible assets, net 79,985 124,679Deferred tax assets 326,087 56,931Deferred offering costs – 805,889Right-of-use assets, net 183,815 255,573TOTAL ASSETS $ 20,184,489 $ 15,102,957LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES:Short term bank loans $ 5,273,678 $ 1,690,165Notes payable 733,996 103,943Accounts payable 4,466,933 4,532,958Due to related parties 246,454 868,438Advance from customers 1,403,628 943,348Accrued expenses and other liabilities 732,419 561,439Taxes payable 356,889 400,071Operating lease liabilities-current 104,088 107,424TOTAL CURRENT LIABILITIES 13,318,085 9,207,786Long term loans 260,299 -Operating lease liabilities-non-current 80,636 114,374TOTAL LIABILITIES 13,659,020 9,322,160COMMITMENTS AND CONTINGENCIES (Note13)SHAREHOLDERS' EQUITY:Ordinary shares, $0.0000025 par value, 20,000,000,000 shares authorized, 53 5021,173,413 and 20,000,000 shares issued and outstanding as of December 31, 2024and 2023*, respectivelyAdditional paid-in capital 4,695,350 1,738,179Statutory reserves 343,077 343,077Retained earnings 2,026,786 3,958,029Accumulated other comprehensive loss (539,797) (258,538)TOTAL SHAREHOLDERS' EQUITY 6,525,469 5,780,797TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 20,184,489 $ 15,102,957 * Share and per share data are presented on a retroactive basis to reflect the reorganization and the forward split at a ratio of 1-for-4, with effective date of July 15, 2024.HUHUTECH INTERNATIONAL GROUP INC.AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME For the Years Ended December 31, 2024 2023 2022Revenues $ 18,149,244 $ 16,732,688 $ 11,374,257Cost of revenues-third parties 10,919,792 11,110,545 7,018,597Cost of revenues-related party 676,889 210,251 805,679Total cost of revenues 11,596,681 11,320,796 7,824,276Gross profit 6,552,563 5,411,892 3,549,981Operating expenses:Selling expenses 2,068,278 871,797 391,013General and administrative expenses 3,162,801 1,036,922 1,033,079Research and development expenses 2,879,183 1,341,221 1,213,529Total operating expenses 8,110,262 3,249,940 2,637,621(Loss) income from operations (1,557,699) 2,161,952 912,360Other income (expense):Interest income 8,691 7,279 4,021Interest expense (113,657) (72,197) (51,985)Other income, net 5,821 492,123 99,920Total other (expense) income, net (99,145) 427,205 51,956(Loss) income before income taxes (1,656,844) 2,589,157 964,316Provision for income taxes 274,399 255,570 34,307Net (loss) income (1,931,243) 2,333,587 930,009Other comprehensive lossForeign currency translation adjustments (281,259) (105,029) (238,627)Comprehensive (loss) income $ (2,212,502) $ 2,228,558 $ 691,382(Loss) earnings per share*Basic and diluted $ (0.10) $ 0.47 $ 0.19Weighted average number of shares outstanding*Basic and diluted 20,208,803 20,000,000 20,000,000 * Share and per share data are presented on a retroactive basis to reflect the reorganization and the forward split at a ratio of 1-for-4, with effective date of July 15, 2024.HUHUTECH INTERNATIONAL GROUP INC.AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS For the Years Ended December 31, 2024 2023 2022Cash flows from operating activities:Net (loss) income $ (1,931,243) $ 2,333,587 $ 930,009Adjustments to reconcile net income to net cash provided by (used in)operating activities:Depreciation and amortization 326,471 214,106 138,572Provision for (recovery of) credit losses 1,900 25,335 (52,229)Deferred tax (benefits) expense (274,609) 11,950 33,739Amortization of operating lease right-of-use assets 62,062 53,307 19,643Changes in operating assets and liabilities:Accounts receivable (1,179,061) (2,817,167) (1,370,494)Notes receivable (257,751) – -Inventories (669,170) 851,308 (979,451)Prepayments and other assets 97,665 50,862 (171,856)Advance to vendors (88,917) (5,119) 28,844Accounts payable 52,879 1,603,497 674,460Accrued expenses and other liabilities 188,280 115,482 60,707Advance from customers 493,048 446,802 485,270Taxes payable (40,645) 246,100 82,890Due from related parties 250,495 – -Operating leases liabilities (66,909) (81,121) (19,643)Net cash (used in) provided by operating activities (3,035,505) 3,048,929 (139,539)Cash flows from investing activities:Additions to property, plant, and equipment (3,825,547) (1,205,784) (95,448)Acquisition of intangible asset – (2,469) -Net cash used in investing activities (3,825,547) (1,208,253) (95,448)Cash flows from financing activities:Payments to related parties (868,438) – (65,358)Advances from related parties – 325,642 -Proceeds from initial public offering 4,117,955 – -Proceeds from (repayments of) proceeds from bank acceptance notes 642,004 (389,894) 426,965payable, netProceeds from short-term bank loans 7,905,066 3,135,195 5,079,409Repayment of short-term bank loans (4,223,122) (3,417,645) (3,952,709)Proceeds from long-term bank loans 694,859 – -Repayment of long-term bank loans (430,813) – -Payment of offering costs (382,333) (247,874) (171,023)Net cash provided by (used in) provided by financing activities 7,455,178 (594,576) 1,317,284Effect of exchange rate changes on cash and restricted cash (117,659) (88,057) (5,196)Net increase in cash and restricted cash 476,467 1,158,043 1,077,101Cash and restricted cash, beginning of year 2,846,659 1,688,616 611,515Cash and restricted cash, end of year $ 3,323,126 $ 2,846,659 $ 1,688,616Reconciliation of cash and restricted cash, end of yearCash $ 3,102,865 $ 2,739,530 $ 1,361,728Restricted cash 220,261 107,129 326,888Cash and restricted cash, end of year $ 3,323,126 $ 2,846,659 $ 1,688,616Supplemental cash flow disclosures:Cash paid for income tax $ 97,101 $ 68,649 $ 31,015Cash paid for interest $ 36,403 $ 68,255 $ 51,985Non-cash activities:Right-of-use assets obtained in exchange for operating lease obligations $ 79,591 $ 323,290 $ 7,372Reclassification of deferred offering costs $ 1,160,781 $ – $ –

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