Forward Reports Fiscal 2020 Second Quarter Results
June 25 2020 - 4:30PM
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
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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 |
|
|
|
|
|
|
|
|
|
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