Huadi International Group Co., Ltd. (“HUDI” or the “Company”)
(NASDAQ: HUDI), a leading developer and manufacturer of industrial
stainless steel seamless pipes and tubes products in China,
today announced its interim financial results for six months ended
March 31, 2021.
Financial Highlights for the First-Half
2021
|
|
For
Half-Year Ended March 31 |
($ millions,
except per share data) |
2021 |
|
2020 |
|
% Change |
Revenue |
|
$29.89 |
|
$25.56 |
|
16.94% |
Gross profit |
|
$5.35 |
|
$6.30 |
|
-15.08% |
Gross margin |
|
17.90% |
|
24.65% |
|
-17.65% |
Operating
income |
$0.68 |
|
$3.51 |
|
-80.63% |
Net income (loss)
attributable to Huadi International |
$0.64 |
|
$2.65 |
|
-75.85% |
Diluted earnings
(loss) per share |
$0.06 |
|
$0.27 |
|
-77.78% |
|
|
|
|
|
|
|
- Revenue increased by 16.94% to $29.89 million for the
six months ended March 31, 2021 from $25.56 million for the same
period in 2020, primarily due to the growth in the number of
domestic clients and sales
- Gross profit decreased by 15.08% to $5.35 million for the six
months ended March 31, 2021 from $6.30 million for the same period
in 2020. The decrease of gross profit was primarily due to that we
lowered the price of our products sold to attract new clients
- Operating income was $0.68 million for the six months
ended March 31, 2021, compared to $3.51 million for the six
months ended March 31, 2020
- Net income attributable to Huadi International during
the six months ended March 31, 2021 was $0.64 million,
compared to $2.65 million for the same period last year
- Basic and diluted earnings per share was $0.06 for the six
months ended March 31, 2021, compared to $0.27 million for the same
period in 2020
"We accelerated our growth momentum during the six months ended
March 31, 2021, growing our total revenue by 16.94% as compared
with the same period of last year. We are firmly committed to
carrying out our corporate mission, meticulous execution of growth
strategies, methodical expansion in both overseas and domestic
markets, proactive engagement of Huadi clients through innovative
products, and prudent investment in sales and marketing
initiatives. Going forward, we plan to refine our competitive edge,
deepen our expertise in stainless steel seamless pipes and tubes
products, and expand our brand influence among our clients on a
global basis,” commented Mr. Di Wang, Chairman of Huadi
International Group Co., Ltd.
Financial Results for the Six Months Ended March 31,
2021
Revenue
For the half-year ended March 31, 2021, revenue increased by
$4.33 million or 16.94% to $29.89 million from $25.56 million for
the same period in 2020. The increase was primarily due to the
growth in the number of our domestic clients and sales.
Gross Profit
Gross profit decreased by $0.95 million or 15.08% to $5.35
million for the six months ended March 31, 2021 from $6.30 million
for the same period in 2020. The decrease of gross profit was
mainly due to that we lowered the price of our products sold to
attract new customers in order to expand our market share.
Operating Expenses
Selling, general and administrative expenses increased
by $1.79 million, or 91.79%, to $3.74 million for
the six months ended March 31, 2021 from $1.95
million for the same period in 2020. The increase in SG&A
expenses was primarily due to 1) increase of expenses related to
our initial public offering completed in January 2021. 2) increase
of one-off cash compensation and performance bonuses that we paid
to our core employees during the reporting period.
Research and development expenses increased by $0.10
million, or 12.05%, to $0.93 million for the half year
ended March 31, 2021 from $0.83 million for the same
period in 2020.
Total operating expenses increased by $1.88 million, or
67.38%, to $4.67 million for the half-year ended March
31, 2021 from $2.79 million for the same period in
2020.
Total Operating Income
Total operating income was $0.68 million for the six months
ended March 31, 2021, decreased by $2.83 million or 80.63% from
$3.51 million during the same period in 2020. The decrease was
primarily due to the increase in SG&A expenses.
Other Income (Expenses)
Interest expenses were $0.93 million for the half-year
ended March 31, 2021, compared to $1.04 million for the
same period during the prior year. Other net income was $0.96
million for the half-year ended March 31, 2021, compared to
$0.55 million for the same period during the prior year. As a
result, total net other expenses were $0.03 million for
the half-year ended March 31, 2021, compared to total net other
expenses of $0.49 million for the same period during the prior
year.
Net Income (loss) and earnings (loss) per share
As a result of the factors described above, our net income
was $0.64 million for the half-year ended March 31, 2021,
compared to a net income of $2.68 million for the same period
during the prior year.
After deducting for non-controlling interests, net income
attributable to Huadi International was $0.64
million, or basic and diluted earnings of $0.06 per
share, for the six months ended March 31, 2021. This compared to
net income attributable to Huadi
International of $2.65 million, or $0.27 per share,
for the same period in the prior year.
Financial Condition
As of March 31, 2021, cash and cash equivalents
totaled $19.71 million, compared to $0.80 million as
of September 30, 2020. Short-term bank borrowings were $32.35
million as of March 31, 2021, compared to $31.22
million as of September 30, 2020.
Net accounts receivable was $14.20 million as
of March 31, 2021, compared to $13.62 million as
of September 30, 2020. Inventories were $23.62
million as of March 31, 2021, compared to $20.84
million as of September 30, 2020. Accounts payable
was $1.30 million as of March 31, 2021, compared
to $1.86 million as of September 30, 2020.
Total current assets and current liabilities
were $68.74 million and $43.74 million,
respectively, leading to a current ratio of 1.57 as of March 31,
2021. Total current assets and current liabilities were $47.35
million and $43.33 million, respectively, leading to a
current ratio of 1.09 as of September 30, 2020.
Recent Developments
On April 9, 2021, the Company was awarded stainless steel
seamless pipe order contracts that worth RMB 20.65 million
(approximately US $3.2 million) after winning the bid for a mining
project in Gansu province, China.
On March 17, 2021, the Company announced that it was
awarded stainless steel seamless pipe order contracts that
worth RMB 10.2 million (approximately US $1.6
million) after winning bid for a mining project
in China Gansu province.
On March 3, 2021, the Company announced that it has been
awarded RMB 12.45 million (approximately US $1.95
million) stainless pipe order contracts after winning bids for two
chemical-related projects.
In January 2021, the Company completed an initial public
offering on the NASDAQ stock exchange market and
raised $25 million by offering 3.1 million shares
at $8.00 per share, the high end of the range
of $7 to $8. At pricing, the Company commanded a
market value of $106 million.
About Huadi International Group
Co., Ltd.
Huadi International Group Co., Ltd. is a leading
manufacturer of industrial stainless steel seamless pipes and tubes
products with extensive distribution facilities and network for
over twenty provinces in China and across international
steel pipes industry. It offers a broad range of products exported
to twenty countries and regions such as United
States, Mexico, Thailand, Australia, Argentina, Taiwan, India, the
Philippines, UAE and Canada. Its products are widely
used in the oil & gas transmission, chemistry engineering, food
processing, medical devices, aeronautics and astronautics, boiler,
irrigation works construction, electricity, automobile, naval
architecture, paper mill and mechanical industries. For more
information about the Company, please
visit: http://www.huadi.cc.
Forward-Looking Statement
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. These statements are
subject to uncertainties and risks including, but not limited to,
the following: the Company’s goals and strategies; the Company’s
future business development; financial condition and results of
operations; product and service demand and acceptance; reputation
and brand; the impact of competition and pricing; changes in
technology; government regulations; fluctuations in general
economic and business conditions in China and assumptions
underlying or related to any of the foregoing and other risks
contained in reports filed by the Company 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:
The Company:IR
DepartmentEmail: IR@huadigroup.com
Investor Relations: Dong Cao, CFAEverGreen
Consulting Inc.Email: IR@changqingconsulting.comPhone: +86
13502048965
HUADI INTERNATIONAL GROUP CO.,
LTD.CONSOLIDATED BALANCE SHEETSAS
OF MARCH 31, 2021 AND SEPTEMBER 30,
2020(UNAUDITED, IN U.S. DOLLARS, EXCEPT SHARE
DATA)
|
|
March 31,2021 |
|
|
September 30,2020 |
|
|
|
(Unaudited) |
|
|
(Audited) |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
19,713,319 |
|
|
$ |
796,794 |
|
Restricted cash |
|
|
947,422 |
|
|
|
908,410 |
|
Accounts receivable, net of allowance for doubtful accounts of
$3,016,194 and $2,910,554, respectively |
|
|
14,200,426 |
|
|
|
13,618,697 |
|
Accounts receivable – related parties |
|
|
1,462,527 |
|
|
|
1,914,380 |
|
Notes receivable |
|
|
1,918,182 |
|
|
|
555,612 |
|
Inventories |
|
|
23,615,683 |
|
|
|
20,837,594 |
|
Advances to suppliers |
|
|
1,683,511 |
|
|
|
998,123 |
|
Advances to suppliers – related parties |
|
|
4,582,050 |
|
|
|
5,342,512 |
|
Other receivables |
|
|
619,310 |
|
|
|
2,375,031 |
|
Total current assets |
|
|
68,742,430 |
|
|
|
47,347,153 |
|
Property, plant and equipment, net |
|
|
7,216,025 |
|
|
|
6,687,642 |
|
Intangible assets, net |
|
|
2,375,128 |
|
|
|
1,202,687 |
|
Long-term investments |
|
|
13,937,452 |
|
|
|
13,449,305 |
|
Deferred tax assets |
|
|
452,429 |
|
|
|
436,583 |
|
TOTAL
ASSETS |
|
$ |
92,723,464 |
|
|
$ |
69,123,370 |
|
LIABILITIES AND SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
1,299,469 |
|
|
$ |
1,855,047 |
|
Accrued expenses and other current liabilities |
|
|
1,589,502 |
|
|
|
1,587,826 |
|
Notes payable |
|
|
1,785,769 |
|
|
|
1,517,026 |
|
Advances from customers |
|
|
2,253,984 |
|
|
|
1,515,452 |
|
Due to related parties |
|
|
506,394 |
|
|
|
1,407,711 |
|
Short-term borrowings |
|
|
32,354,467 |
|
|
|
31,221,280 |
|
Tax payable |
|
|
3,947,312 |
|
|
|
4,230,328 |
|
TOTAL
LIABILITIES |
|
|
43,736,897 |
|
|
|
43,334,670 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTIGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
Common stock, $0.0002 par value, 250,000,000 shares authorized,
13,125,000 and 10,000,000 shares issued and outstanding,
respectively |
|
|
2,625 |
|
|
|
2,000 |
|
Additional paid-in capital |
|
|
44,211,336 |
|
|
|
22,531,620 |
|
Retained earnings (Accumulated deficit) |
|
|
476,719 |
|
|
|
(159,189 |
) |
Accumulated other comprehensive income |
|
|
4,058,041 |
|
|
|
3,189,856 |
|
Total equity attributable to
Huadi International Group Co., Ltd. |
|
|
48,748,721 |
|
|
|
25,564,287 |
|
Equity attributable to
non-controlling interests |
|
|
237,846 |
|
|
|
224,413 |
|
Total shareholders’
equity |
|
|
48,986,567 |
|
|
|
25,788,700 |
|
TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
92,723,464 |
|
|
$ |
69,123,370 |
|
HUADI INTERNATIONAL GROUP CO.,
LTD.CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOMEFOR THE SIX MONTHS ENDED MARCH
31, 2021 AND 2020(UNAUDITED, IN U.S. DOLLARS,
EXCEPT SHARE DATA)
|
|
For the Six Months Ended March 31, |
|
|
|
2021 |
|
|
2020 |
|
Sales |
|
$ |
29,887,244 |
|
|
$ |
25,557,407 |
|
Cost of sales |
|
|
(24,534,360 |
) |
|
|
(19,259,740 |
) |
Gross
profit |
|
|
5,352,884 |
|
|
|
6,297,667 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
3,742,726 |
|
|
|
1,953,069 |
|
Research and development |
|
|
928,582 |
|
|
|
834,351 |
|
Total operating
expenses |
|
|
4,671,308 |
|
|
|
2,787,420 |
|
|
|
|
|
|
|
|
|
|
Operating
income |
|
|
681,576 |
|
|
|
3,510,247 |
|
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
Interest expenses, net |
|
|
(926,237 |
) |
|
|
(1,042,184 |
) |
Other income, net |
|
|
956,618 |
|
|
|
554,456 |
|
Total other expenses,
net |
|
|
30,381 |
|
|
|
(487,728 |
) |
|
|
|
|
|
|
|
|
|
Income before income
taxes |
|
|
711,957 |
|
|
|
3,022,519 |
|
Income tax provision |
|
|
(69,626 |
) |
|
|
(341,280 |
) |
|
|
|
|
|
|
|
|
|
Net
income |
|
$ |
642,331 |
|
|
$ |
2,681,239 |
|
|
|
|
|
|
|
|
|
|
Net income attributable to
non-controlling interests |
|
|
6,423 |
|
|
|
26,812 |
|
|
|
|
|
|
|
|
|
|
Net income attributable to
Huadi International Group Co., Ltd. |
|
$ |
635,908 |
|
|
$ |
2,654,427 |
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
642,331 |
|
|
$ |
2,681,239 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income: |
|
|
|
|
|
|
|
|
Foreign currency translation
adjustment |
|
|
875,195 |
|
|
|
174,202 |
|
|
|
|
|
|
|
|
|
|
Total comprehensive
income |
|
|
1,517,526 |
|
|
|
2,855,441 |
|
Comprehensive income
attributable to non-controlling interests |
|
|
8,752 |
|
|
|
1,742 |
|
|
|
|
|
|
|
|
|
|
Comprehensive income
attributable to Huadi International Group Co., Ltd. |
|
$ |
1,508,774 |
|
|
$ |
2,853,699 |
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per
share |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.06 |
|
|
$ |
0.27 |
|
Diluted |
|
$ |
0.06 |
|
|
$ |
0.27 |
|
Weighted average number of
shares outstanding |
|
|
|
|
|
|
|
|
Basic |
|
|
11,041,667 |
|
|
|
10,000,000 |
|
Diluted |
|
|
11,041,667 |
|
|
|
10,000,000 |
|
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