Forward Reports Fiscal 2023 Third Quarter Results
August 14 2023 - 12:23PM
Forward Industries, Inc. (NASDAQ:FORD), a global design, sourcing
and distribution group, today announced financial results for its
third quarter ended June 30, 2023.
Third Quarter Fiscal Year
2023 Financial Highlights
- Revenues were $10.1 million, a
decrease of 4.7% from $10.6 million for the third quarter of fiscal
year 2022.
- Gross margin declined to 18.0%
compared to 18.1% for the third quarter of fiscal year 2022.
- Operating loss was $0.5 million
compared to $0.4 million for the third quarter of fiscal year
2022.
- Basic and diluted loss per share
was $0.05 compared to $0.04 for the third quarter of fiscal year
2022.
- Cash balance of $2.8 million at
June 30, 2023 as compared to $2.6 million at September 30,
2022.
Terry Wise, Chief Executive Officer of Forward
Industries, stated, “Pleasingly, the quarter witnessed the
sustained positive momentum within our design division. However,
this strong performance was offset by the continued difficulties
within the retail and OEM sector. Consequently, after careful
deliberation and consideration we have reluctantly resolved to
discontinue our retail division in an orderly manner that will
ensure we fulfil our commitments to our customers. This has been a
pivotal quarter for the Company, one in which as a direct
consequence of the decisions taken, we hope will result in
profitability in the near future.”
The tables below are derived from the Company’s
consolidated financial statements included in its Form 10-Q filed
on August 14, 2023 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 quarters ended June
30, 2023 and 2022. Please also refer to the Company’s Form 10-K for
a discussion of risk factors applicable to the Company and its
business.
Cautionary 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 optimism
for improved performance in fiscal year 2023. 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, loss of additional customers, pricing
pressures, lack of success of our sales people, supply chain
issues, inability of our design division’s customers to pay for our
services, unanticipated issues with our affiliated sourcing agent,
and issues at Chinese factories that we source our products. 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, 2022 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 global design, sourcing and
distribution group serving top tier medical and technology
customers worldwide. Through its acquisitions of Intelligent
Product Solutions, Inc. and Kablooe Design, Inc., the Company has
expanded its ability to design and develop solutions for its
existing multinational client base and expand beyond the diabetic
product line into a variety of industries with a full spectrum of
hardware and software product design and engineering services
For more information,
contact:
Kathleen Weisberg, CFO, Forward Industries,
Inc. (631)
547-3055, kweisberg@forwardindustries.com
FORWARD
INDUSTRIES, INC. AND SUBSIDIARIES |
CONDENSED
CONSOLIDATED BALANCE SHEETS |
|
|
|
|
|
|
|
|
|
|
|
June
30, |
|
September
30, |
|
|
|
|
|
2023 |
|
|
|
2022 |
|
Assets |
|
(Unaudited) |
|
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
Cash |
|
$ |
2,821,163 |
|
|
$ |
2,575,522 |
|
|
Accounts receivable, net |
|
7,659,132 |
|
|
|
7,542,666 |
|
|
Inventories, net |
|
1,892,790 |
|
|
|
3,801,030 |
|
|
Prepaid expenses and other current assets |
|
689,955 |
|
|
|
417,605 |
|
|
|
|
|
|
|
|
|
|
|
Total
current assets |
|
13,063,040 |
|
|
|
14,336,823 |
|
|
|
|
|
|
|
|
Property and equipment, net |
|
282,308 |
|
|
|
241,146 |
|
Intangible assets, net |
|
946,333 |
|
|
|
1,105,901 |
|
Goodwill |
|
1,758,682 |
|
|
|
1,758,682 |
|
Operating lease right-of-use assets, net |
|
3,124,871 |
|
|
|
3,427,726 |
|
Other assets |
|
68,737 |
|
|
|
68,737 |
|
|
|
|
|
|
|
|
|
|
|
Total
assets |
$ |
19,243,971 |
|
|
$ |
20,939,015 |
|
|
|
|
|
|
|
|
Liabilities and shareholders' equity |
|
|
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
Accounts payable |
$ |
684,616 |
|
|
$ |
268,160 |
|
|
Due to Forward China |
|
7,948,249 |
|
|
|
7,713,880 |
|
|
Deferred income |
|
264,726 |
|
|
|
438,878 |
|
|
Current portion of earnout consideration |
|
- |
|
|
|
25,000 |
|
|
Current portion of operating lease liability |
|
406,223 |
|
|
|
377,940 |
|
|
Accrued expenses and other current liabilities |
|
1,283,337 |
|
|
|
1,153,906 |
|
|
|
|
Total
current liabilities |
|
10,587,151 |
|
|
|
9,977,764 |
|
|
|
|
|
|
|
|
Other liabilities: |
|
|
|
|
Note payable to Forward China |
|
1,200,000 |
|
|
|
1,400,000 |
|
|
Operating lease liability, less current portion |
|
2,942,772 |
|
|
|
3,249,824 |
|
|
Earnout consideration, less current portion |
|
30,000 |
|
|
|
45,000 |
|
|
|
Total other liabilities |
|
4,172,772 |
|
|
|
4,694,824 |
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities |
|
14,759,923 |
|
|
|
14,672,588 |
|
|
|
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
|
|
|
Shareholders' equity: |
|
|
|
|
Common stock, par value $0.01 per share; 40,000,000 shares
authorized; |
|
|
|
|
|
10,061,185 shares issued and outstanding at June 30, 2023 |
|
|
|
|
|
and September 30, 2022 |
|
100,612 |
|
|
|
100,612 |
|
|
Additional paid-in capital |
|
20,171,299 |
|
|
|
20,115,711 |
|
|
Accumulated deficit |
|
(15,787,863 |
) |
|
|
(13,949,896 |
) |
|
|
|
|
|
|
|
|
|
|
Total
shareholders' equity |
|
4,484,048 |
|
|
|
6,266,427 |
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities and shareholders' equity |
$ |
19,243,971 |
|
|
$ |
20,939,015 |
|
|
|
|
|
|
|
|
FORWARD
INDUSTRIES, INC. AND SUBSIDIARIES |
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS |
(UNAUDITED) |
|
|
|
|
|
|
|
For the Three Months Ended June 30, |
|
For the Nine Months Ended June 30, |
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
|
|
|
|
|
|
|
|
Revenues,
net |
$ |
10,127,159 |
|
|
$ |
10,588,835 |
|
|
$ |
31,594,818 |
|
|
$ |
32,517,139 |
|
Cost of
sales |
|
8,303,997 |
|
|
|
8,671,103 |
|
|
|
26,340,525 |
|
|
|
25,727,964 |
|
Gross profit |
|
1,823,162 |
|
|
|
1,917,732 |
|
|
|
5,254,293 |
|
|
|
6,789,175 |
|
|
|
|
|
|
|
|
|
Sales and
marketing expenses |
|
711,472 |
|
|
|
664,484 |
|
|
|
2,175,081 |
|
|
|
2,106,263 |
|
General and
administrative expenses |
|
1,633,740 |
|
|
|
1,639,053 |
|
|
|
4,912,197 |
|
|
|
5,177,241 |
|
|
|
|
|
|
|
|
|
Loss from operations |
|
(522,050 |
) |
|
|
(385,805 |
) |
|
|
(1,832,985 |
) |
|
|
(494,329 |
) |
|
|
|
|
|
|
|
|
Fair value
adjustment of earnout consideration |
|
- |
|
|
|
- |
|
|
|
(40,000 |
) |
|
|
- |
|
Interest
expense |
|
25,475 |
|
|
|
30,424 |
|
|
|
80,214 |
|
|
|
94,115 |
|
Interest
income |
|
(10,489 |
) |
|
|
- |
|
|
|
(11,345 |
) |
|
|
- |
|
Other
(income)/expense, net |
|
(292 |
) |
|
|
2,684 |
|
|
|
(23,887 |
) |
|
|
6,780 |
|
Loss before income taxes |
|
(536,744 |
) |
|
|
(418,913 |
) |
|
|
(1,837,967 |
) |
|
|
(595,224 |
) |
|
|
|
|
|
|
|
|
Provision
for income taxes |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
|
|
|
Net loss |
$ |
(536,744 |
) |
|
$ |
(418,913 |
) |
|
$ |
(1,837,967 |
) |
|
$ |
(595,224 |
) |
|
|
|
|
|
|
|
|
Loss per
share: |
|
|
|
|
|
|
|
Basic |
$ |
(0.05 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.06 |
) |
Diluted |
$ |
(0.05 |
) |
|
$ |
(0.04 |
) |
|
$ |
(0.18 |
) |
|
$ |
(0.06 |
) |
|
|
|
|
|
|
|
|
Weighted
average common shares outstanding: |
|
|
|
|
|
|
|
Basic |
|
10,061,185 |
|
|
|
10,061,185 |
|
|
|
10,061,185 |
|
|
|
10,061,185 |
|
Diluted |
|
10,061,185 |
|
|
|
10,061,185 |
|
|
|
10,061,185 |
|
|
|
10,061,185 |
|
|
|
|
|
|
|
|
|
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