Forward Reports Fiscal 2020 Second Quarter Results

Revenues of $7.9 million and Net loss of $1.4 million for the quarter

West Palm Beach, Florida, UNITED STATES


WEST PALM BEACH, Fla., June 25, 2020 (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 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

   
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