FOR IMMEDIATE RELEASE
FORWARD REPORTS FISCAL 2019 SECOND QUARTER RESULTS
Revenues of $8.2 million and operating loss of $1.1 million for the quarter
West Palm Beach, FL – May 15, 2019 – 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, 2019.
Included in the 2019 financial results is a full fiscal quarter of our consolidated entities including Intelligent Product Solutions (IPS), our design and development business, which we acquired on January 18, 2018. The 2018 second quarter results represents a shortened period.
Second Quarter 2019 Financial Highlights
Revenues were $8.2 million compared to $9 million from the second quarter of 2018. A decrease of 9%.
Loss from Operations was $1.1 million compared to income of $232 thousand in the second quarter of 2018.
Gross profit percentage decreased to 16% compared to 20% in the second quarter of 2018.
Net loss was $1.1 million compared to net income of $948 thousand in the second quarter of 2018 (inclusive of a non-cash tax benefit of $747 thousand).
Net loss per share was $0.12 compared to Net income per share of $0.10 for the second quarter of 2018.
Cash and cash equivalents totaled $2.4 million at March 31, 2019.
Terry Wise, Chief Executive Officer of Forward Industries, stated,“This has been a challenging quarter which has been impacted by our continued declining diabetes distribution business and our focus on entering more profitable sectors. During the quarter, we secured an exclusive agreement to distribute leading smart enabled lighting products. Simultaneously I am delighted to report that we have significantly enhanced our senior executive staff with the appointment of Doug Matthews as Senior Vice President /Chief Operating Officer.In light of these developments I remain confident and excited about the future of the company.”
The tables below are derived from the Company’s condensed consolidated financial statements included in its Form 10-Q filed on May 14, 2019 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 Year to date and fiscal quarter ended March 31, 2019 and 2018. 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 opportunities from new developments. 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, unanticipated issues with Mooni and their relationship with retail outlets in the U.S., failure to commercialize products that we develop and unanticipated issues with our affiliated sourcing agent, failure to take advantage of synergies between IPS and Forward and issues integrating with IPS. 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, 2018 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 hand held 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.
Michael Matte, CFO
(561) 465-0031
FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
Assets | March 31,
2019 | | September 30,
2018 |
| | (Unaudited) | | | |
Current assets: |
Cash | $ | 2,386,165 | | $ | 4,369,866 |
Accounts receivable, net | | 7,822,173 | | | 9,024,518 |
Inventories | | 1,433,169 | | | 1,568,914 |
Prepaid expenses and other current assets | | 614,469 | | | 248,434 |
Total current assets | | 12,255,976 | | | 15,211,732 |
Property and equipment, net | | 307,274 | | | 358,975 |
Intangible assets, net | | 1,330,393 | | | 1,411,182 |
Goodwill | | 2,182,427 | | | 2,182,427 |
Other assets | | 340,068 | | | 63,550 |
Total assets | $ | 16,416,138 | | $ | 19,227,866 |
Liabilities and shareholders' equity | | | | | |
Current liabilities: | | | | | |
Line of credit | $ | 1,300,000 | | $ | 350,000 |
Accounts payable | | 286,473 | | | 329,967 |
Due to Forward China | | 2,180,399 | | | 4,197,435 |
Deferred income | | 70,921 | | | 125,013 |
Notes payable - short-term portion | | 1,695,537 | | | 1,770,112 |
Capital leases payable - short-term portion | | 51,585 | | | 56,876 |
Deferred consideration - short-term portion | | 221,000 | | | 200,000 |
Accrued expenses and other current liabilities | | 599,354 | | | 594,887 |
Total current liabilities | | 6,405,269 | | | 7,624,290 |
Other liabilities: | | | | | |
Notes payable - long-term portion | | 8,107 | | | 54,335 |
Capital leases payable - long-term portion | | 43,933 | | | 64,041 |
Deferred rent | | 55,776 | | | 47,605 |
Deferred consideration - long-term portion | | 317,000 | | | 338,000 |
Total other liabilities | | 424,816 | | | 503,981 |
Total liabilities | | 6,830,085 | | | 8,128,271 |
Commitments and contingencies | | | | | |
Shareholders' equity: | | | | | |
Common stock, par value $0.01 per share; 40,000,000 shares authorized;
9,533,851 and 9,533,851 shares issued and outstanding, respectively | | 95,338 | | | 95,338 |
Additional paid-in capital | | 18,868,286 | | | 18,720,396 |
Accumulated deficit | | (9,377,571) | | | (7,716,139) |
Total shareholders' equity | | 9,586,053 | | | 11,099,595 |
Total liabilities and shareholders' equity | $ | 16,416,138 | | $ | 19,227,866 |
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, |
2019 | | 2018 | | 2019 | | 2018 |
Net Revenues | $ | 8,172,467 | | $ | 9,012,427 | | $ | 18,355,750 | | $ | 15,348,894 |
Cost of Sales | | 6,861,622 | | | 7,181,662 | | | 15,741,864 | | | 12,515,533 |
Gross Profit | | 1,310,845 | | | 1,830,765 | | | 2,613,886 | | | 2,833,361 |
| | | | | | | | | | | | |
Operating expenses: | | | | | | | | | | | |
Sales and marketing | | 428,376 | | | 519,966 | | | 897,975 | | | 798,028 |
General and administrative | | 1,957,530 | | | 1,078,735 | | | 3,271,499 | | | 1,752,196 |
Total operating expenses | | 2,385,906 | | | 1,598,701 | | | 4,169,474 | | | 2,550,224 |
| | | | | | | | | | | | |
Income (loss) from operations | | (1,075,061) | | | 232,064 | | | (1,555,588) | | | 283,137 |
| | | | | | | | | | | | |
Interest expense | | (53,051) | | | (30,907) | | | (98,088) | | | (30,907) |
| Other income (expense) | | (2,793) | | | 310 | | | (7,756) | | | (4,112) |
| Total Other income (expense) | | (55,844) | | | (30,597) | | | (105,844) | | | (35,019) |
Income (loss) before income taxes | | (1,130,905) | | | 201,467 | | | (1,661,432) | | | 248,118 |
Benefit from income taxes | | - | | | 747,000 | | | | | | 747,000 |
Net Income (loss) | $ | (1,130,905) | | $ | 948,467 | | $ | (1,661,432) | | $ | 995,118 |
| | | | | | | | | | | | |
Net income (loss) per basic common share | $ | (0.12) | | $ | 0.10 | | $ | (0.17) | | $ | 0.11 |
Net income (loss) per diluted common share | $ | (0.12) | | $ | 0.10 | | $ | (0.17) | | $ | 0.11 |
| | | | | | | | | | | | |
Weighted average number of common and
common equivalent shares outstanding: | | | | | | | | | | | |
Basic | | 9,532,645 | | | 9,291,334 | | | 9,530,207 | | | 9,023,166 |
Diluted | | 9,532,645 | | | 9,398,054 | | | 9,530,207 | | | 9,146,218 |
