Forward Reports Fiscal 2020 Second Quarter Results
Revenues of $7.9 million and Net loss of $1.4 million for the quarter
WEST PALM BEACH, Fla., June 25, 2020 (GLOBE NEWSWIRE) -- Forward Industries, Inc. (NASDAQ:FORD), a single source solution provider for the full spectrum of hardware and software product design and engineering services as well as a designer and distributer of carry and protective solutions, today announced financial results for its second fiscal quarter ended March 31, 2020.
Second Quarter 2020 Financial Highlights
- Revenues were $7.9 million compared to $8.2 million from the second quarter of 2019. A decrease of 3.7%.
- Gross profit percentage increased to 18.3% compared to 16% in the second quarter of 2019.
- Net Loss was $1.4 million compared to a loss of $1.1 million in the second quarter of 2019. Included in the loss was an impairment charge for Goodwill of $1 million.
- Net loss per share was $0.14 compared to Net loss per share of $0.12 for the second quarter of 2019.
- Cash and cash equivalents totaled $1.3 million at March 31, 2020.
Terry Wise, Chief Executive Officer of Forward Industries, stated, “Unsurprisingly, in these challenging times, the quarter has been impacted by delays within the retail sector which have affected timing on the roll out of our smart line of products. Forward’s financial performance was further impacted by the expected continued decline of our diabetes distribution business. However, as we adapt and emerge out of these difficult trading conditions, I am confident that Forward is well placed to succeed in the future.”
The tables below are derived from the Company’s condensed consolidated financial statements included in its Form 10-Q filed on June 25, 2020 with the Securities and Exchange Commission. Please refer to the Form 10-Q for complete financial statements and further information regarding the Company’s results of operations and financial condition relating to the fiscal quarter ended March 31, 2020 and 2019. Please also refer to the Company’s Form 10-K for a discussion of risk factors applicable to the Company and its business.
Note Regarding Forward-Looking Statements
This press release contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 including statements regarding our belief regarding our progress from retail and opportunities from new business lines. Forward has tried to identify these forward-looking statements by using words such as “may”, “should,” “expect,” “hope,” “anticipate,” “believe,” “intend,” “plan,” “estimate” and similar expressions. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties and other factors that could cause its actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks include the inability to expand our customer base, pricing pressures, lack of success of our sales people, failure to develop products at a profit, failure to commercialize products that we develop, a long delay in the re-opening of retail stores in the U.S., as a result of the pandemic, changes in consumer purchasing as a result of unemployment, unanticipated issues with our affiliated sourcing agent, issues at Chinese factories that we source our products as a result of the pandemic, and failure to obtain acceptance of our products by big box retail stores. No assurance can be given that the actual results will be consistent with the forward-looking statements. Investors should read carefully the factors described in the “Risk Factors” section of the Company’s filings with the SEC, including the Company’s Form 10-K for the year ended September 30, 2019 for information regarding risk factors that could affect the Company’s results. Except as otherwise required by Federal securities laws, Forward undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.
About Forward Industries
Forward is a fully integrated design, development and manufacturing solution to top tier medical and technology customers worldwide. Through its acquisition of Intelligent Product Solutions (“IPS”), the Company has expanded its ability to design and develop solutions for our existing multinational client base and expand beyond the diabetic product line in to a variety of industries with a full spectrum of hardware and software product design and engineering services. In addition to our existing designs and distribution of carry and protective solutions, primarily for handheld electronic devices. The company now provides one stop shopping for the design development and manufacturing opportunities from a variety of sources.
Contact:
Forward Industries, Inc.
Anthony Camarda
(631) 547-3041
| FORWARD INDUSTRIES, INC. AND SUBSIDIARIES | |||||||||
| CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||||
| March 31, | September 30, | ||||||||
| 2020 | 2019 | ||||||||
| (Unaudited) | |||||||||
| Assets | |||||||||
| Current assets: | |||||||||
| Cash | $ | 1,348,099 | $ | 3,092,813 | |||||
| Accounts receivable, net | 7,368,884 | 6,695,120 | |||||||
| Inventories | 636,052 | 1,608,827 | |||||||
| Prepaid expenses and other current assets | 609,903 | 441,502 | |||||||
| Total current assets | 9,962,938 | 11,838,262 | |||||||
| Property and equipment, net | 213,181 | 243,002 | |||||||
| Intangible assets, net | 1,167,030 | 1,248,712 | |||||||
| Goodwill | 1,167,427 | 2,182,427 | |||||||
| Investment | - | 326,941 | |||||||
| Operating lease right of use assets, net | 3,490,049 | - | |||||||
| Other assets | 184,201 | 255,008 | |||||||
| Total assets | $ | 16,184,826 | $ | 16,094,352 | |||||
| Liabilities and shareholders' equity | |||||||||
| Current liabilities: | |||||||||
| Line of credit | $ | 400,000 | $ | 1,300,000 | |||||
| Accounts payable | 258,442 | 315,444 | |||||||
| Due to Forward China | 2,307,759 | 3,236,693 | |||||||
| Deferred income | 707,987 | 219,831 | |||||||
| Notes payable | 1,608,125 | 1,654,799 | |||||||
| Capital leases payable - short-term portion | 39,306 | 39,941 | |||||||
| Deferred consideration | 293,000 | 834,000 | |||||||
| Operating lease liability - short-term portion | 255,505 | - | |||||||
| Accrued expenses and other current liabilities | 642,516 | 694,972 | |||||||
| Total current liabilities | 6,512,640 | 8,295,680 | |||||||
| Other liabilities: | |||||||||
| Capital leases payable - long-term portion | 10,585 | 26,438 | |||||||
| Deferred rent | - | 60,935 | |||||||
| Operating lease liability - long-term portion | 3,334,134 | - | |||||||
| Total other liabilities | 3,344,719 | 87,373 | |||||||
| Total liabilities | 9,857,359 | 8,383,053 | |||||||
| Commitments and contingencies | |||||||||
| Shareholders' equity: | |||||||||
| Common stock, par value $0.01 per share; 40,000,000 shares authorized; | |||||||||
| 9,533,851 shares issued and outstanding | 95,338 | 95,338 | |||||||
| Additional paid-in capital | 19,005,569 | 18,936,130 | |||||||
| Accumulated deficit | (12,773,440 | ) | (11,320,169 | ) | |||||
| Total shareholders' equity | 6,327,467 | 7,711,299 | |||||||
| Total liabilities and shareholders' equity | $ | 16,184,826 | $ | 16,094,352 | |||||
| FORWARD INDUSTRIES, INC. AND SUBSIDIARIES | |||||||||||||||
| CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | |||||||||||||||
| (UNAUDITED) | |||||||||||||||
| For the Three Months Ended March 31, | For the Six Months Ended March 31, | ||||||||||||||
| 2020 | 2019 | 2020 | 2019 | ||||||||||||
| Net Revenues | $ | 7,931,377 | $ | 8,172,467 | $ | 16,324,231 | $ | 18,355,750 | |||||||
| Cost of Sales | 6,478,228 | 6,861,622 | 13,151,073 | 15,741,864 | |||||||||||
| Gross Profit | 1,453,149 | 1,310,845 | 3,173,158 | 2,613,886 | |||||||||||
| 18.32 | % | 16.04 | % | ||||||||||||
| Operating expenses: | |||||||||||||||
| Sales and marketing | 479,461 | 428,376 | 1,014,633 | 897,975 | |||||||||||
| General and administrative | 1,625,385 | 1,957,530 | 2,839,351 | 3,271,499 | |||||||||||
| Goodwill impairment | 1,015,000 | - | 1,015,000 | - | |||||||||||
| Total operating expenses | 3,119,846 | 2,385,906 | 4,868,984 | 4,169,474 | |||||||||||
| Loss from operations | (1,666,697 | ) | (1,075,061 | ) | (1,695,826 | ) | (1,555,588 | ) | |||||||
| Other income (expenses): | |||||||||||||||
| Fair value adjustment of earn-out consideration | 350,000 | - | 350,000 | - | |||||||||||
| Fair value adjustment of deferred cash consideration | (9,000 | ) | - | (9,000 | ) | - | |||||||||
| Interest expense | (44,178 | ) | (53,051 | ) | (95,127 | ) | (98,088 | ) | |||||||
| Other expense | (1,739 | ) | (2,793 | ) | (3,318 | ) | (7,756 | ) | |||||||
| Total Other income (expense) | 295,083 | (55,844 | ) | 242,555 | (105,844 | ) | |||||||||
| Net Loss | $ | (1,371,614 | ) | $ | (1,130,905 | ) | $ | (1,453,271 | ) | $ | (1,661,432 | ) | |||
| Net loss per basic common share | $ | (0.14 | ) | $ | (0.12 | ) | $ | (0.15 | ) | $ | (0.17 | ) | |||
| Net loss per diluted common share | $ | (0.14 | ) | $ | (0.12 | ) | $ | (0.15 | ) | $ | (0.17 | ) | |||
| Weighted average number of common and | |||||||||||||||
| common equivalent shares outstanding: | |||||||||||||||
| Basic | 9,533,851 | 9,532,645 | 9,533,851 | 9,530,207 | |||||||||||
| Diluted | 9,533,851 | 9,532,645 | 9,533,851 | 9,530,207 | |||||||||||
