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Forward Reports Fiscal 2019 Third Quarter Results

1046 Days ago

Revenues of $9.9 million and operating loss of $50 thousand for the quarter

WEST PALM BEACH, Fla., Aug. 14, 2019 (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 third fiscal quarter ended June 30, 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. 

Third Quarter 2019 Financial Highlights 

  • Revenues were $9.9 million compared to $9.5 million from the third quarter of 2018. An increase of 4.2%.
  • Loss from Operations was $50 thousand compared to a loss of $210 thousand in the third quarter of 2018. 
  • Gross profit percentage decreased to 19.1% compared to 20.1% in the third quarter of 2018.
  • Net loss was $104 thousand compared to net income of $235 thousand in the third quarter of 2018 (inclusive of a $510 thousand credit for a change in fair value of the earnout consideration).
  • Net loss per share was $(0.01) compared to Net income per share of $0.02 for the third quarter of 2018.
  • Cash and cash equivalents totaled $2.7 million at June 30, 2019.

Terry Wise, Chief Executive Officer of Forward Industries, stated, 

“This has been an encouraging quarter. As anticipated, the diabetic distribution business continues to decline but by virtue of our collaboration with Mooni AB International we have made strong progress in establishing US and Canada retail distribution capability for our portfolio of smart enabled products. Additionally, we have continued to invest in the business to ensure we have the internal resilience to establish ourselves as the one-stop shop for product development, manufacture and distribution. 

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 August 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 June 30, 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.

A bout 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.

Forward Industries, Inc.                                        
Michael Matte, CFO                                              
(561) 465-0031

  June 30,    September 30,
    2019       2018  
Current assets:      
Cash $ 2,709,526     $ 4,369,866  
Accounts receivable, net   8,464,963       9,024,518  
Inventories   1,304,364       1,568,914  
Prepaid expenses and other current assets   530,871       248,434  
Total current assets   13,009,724       15,211,732  
Property and equipment, net   275,284       358,975  
Intangible assets, net   1,289,776       1,411,182  
Goodwill   2,182,427       2,182,427  
Investment   326,941       -  
Other assets   284,068       63,550  
Total assets $ 17,368,220     $ 19,227,866  
Liabilities and shareholders' equity      
Current liabilities:      
Line of credit $ 1,100,000     $ 350,000  
Accounts payable   259,226       329,967  
Due to Forward China   3,320,976       4,197,435  
Deferred income   147,578       125,013  
Notes payable - short-term portion   1,679,335       1,770,112  
Capital leases payable - short-term portion   51,360       56,876  
Deferred consideration - short-term portion   221,000       200,000  
Accrued expenses and other current liabilities   661,914       594,887  
Total current liabilities   7,441,389       7,624,290  
Other liabilities:      
Notes payable - long-term portion     -          54,335  
Capital leases payable - long-term portion   35,102       64,041  
Deferred rent   59,448       47,605  
Deferred consideration - long-term portion   317,000       338,000  
Total other liabilities   411,550       503,981  
Total liabilities   7,852,939       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   18,901,576       18,720,396  
Accumulated deficit   (9,481,633 )     (7,716,139 )
Total shareholders' equity   9,515,281       11,099,595  
Total liabilities and shareholders' equity $ 17,368,220     $ 19,227,866  

   For the Three Months Ended June 30,     For the Nine Months Ended June 30, 
    2019       2018       2019       2018  
Net Revenues $ 9,909,452     $ 9,539,539     $ 28,265,202     $ 24,888,433  
Cost of Sales   8,014,998       7,625,846       23,756,862       20,197,054  
Gross Profit   1,894,454       1,913,693       4,508,340       4,691,379  
Operating expenses:              
Sales and marketing   539,072       548,388       1,437,047       1,290,741  
General and administrative   1,405,249       1,575,781       4,676,748       3,327,977  
Total operating expenses   1,944,321       2,124,169       6,113,795       4,618,718  
Income (loss) from operations   (49,867 )     (210,476 )     (1,605,455 )     72,661  
Change in fair value of earn-out consideration   -       510,000       -       510,000  
Change in fair value of deferred cash consideration   -       (12,000 )     -       (12,000 )
Interest expense   (52,216 )     (46,504 )     (150,304 )     (77,411 )
Other income (expense)   (1,979 )     (5,536 )     (9,735 )     (9,648 )
Total Other income (expense)   (54,195 )     445,960       (160,039 )     410,941  
Income (loss) before income taxes   (104,062 )     235,484       (1,765,494 )     483,602  
Benefit from income taxes   -       -       -       747,000  
Net Income (loss) $ (104,062 )   $ 235,484     $ (1,765,494 )   $ 1,230,602  
Net income (loss) per basic common share $ (0.01 )   $ 0.02     $ (0.19 )   $ 0.13  
Net income (loss) per diluted common share $ (0.01 )   $ 0.02     $ (0.19 )   $ 0.13  
Weighted average number of common and              
common equivalent shares outstanding:              
Basic   9,533,851       9,482,842       9,531,422       9,176,390  
Diluted   9,533,851       9,547,889       9,531,422       9,281,335  


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