Bon Natural Life Limited Announces Record First Half-Year Revenue and Net Income

Rhea-AI Summary

Bon Natural Life Limited (Nasdaq: BON) reported a 17.0% revenue increase to US$13.7 million for 1H-2022. Gross profit rose 19.6% to US$4.0 million, with a gross margin of 29.5%. Notably, bioactive food ingredient sales surged 171.8%, while health supplements fell 28.5%. Net income improved by 10.2% to US$2.5 million, although diluted EPS decreased to $0.30 from $0.40 year-over-year. The company is expanding production capabilities with the Yumen plant, set to boost capacity by 200%.

Positive

• Revenue increased by 17.0% to US$13.7 million.
• Gross profit rose by 19.6% to US$4.0 million.
• Net income improved by 10.2% to US$2.5 million.
• Bioactive food ingredients sales surged by 171.8%.
• Yumen plant expected to increase production capacity by 200%.

Negative

• Health supplement sales decreased by 28.5%.
• Diluted EPS decreased to $0.30 from $0.40 year-over-year.
• General and administrative expenses increased by 47.0%.

1H-2022 Revenue increases by 17.0% to $13.7 million

XI'AN, China, Aug. 1, 2022 /PRNewswire/ -- Bon Natural Life Limited (Nasdaq: BON) ("BON" or the "Company"), one of the leading bio-ingredient solutions providers in the natural, health and personal care industries, today announced its half-year financial results for the six months ended March 31, 2022.

1H-2022 Financial Highlights

• Total net revenues were US$13.7 million, representing a 17.0% increase from US$11.7 million for the same period in 2021.
• Gross profit increased by 19.6% to US$4.0 million from US$3.4 million for the same period in 2021.
• Gross margin was 29.5%, an increase by 70 basis points from 28.8% for the same period in 2021, and an increase by 2.4% sequentially compared to that of the six months ended September 30, 2021.
• Sales volumes and gross profit of our bioactive food ingredient products increased by 47.5% and 191.1% compared to the same period of 2021.
• Net income increased by 10.2% to US$2.5 million from US$2.3 million for the same period in 2021.
• Diluted earnings per share ("EPS") was $0.30, compared to $0.40 for the same period in 2021.
• Diluted weighted-average number of ordinary shares outstanding increased to 8,386,306 from 5,800,000 for the same period in 2021 due to more shares issued in connection with IPO.

Management Commentary

"We are pleased with a strong start to 2022 and a positive momentum across many of our new initiatives despite unprecedented challenges caused by the pandemic and the most recent macro-economic conditions." Said Richard (Yongwei) Hu, BON's Chairman & CEO, "I am incredibly proud of our teams' achievements to adapt these conditions and help offset pressures over time by our pricing actions, in combination with our continuing cost discipline and market strategy adjustment. In the first six months of the current fiscal year, the average selling prices of fragrance compound, health supplemental powder drinks and bioactive food ingredients increased by 64.1%, 11.2% and 79.2% year over year, respectively, as we effectively passed through the rising raw material costs downstream by raising our selling prices on top of our product mix shift to higher value added and higher margin products. We are encouraged by the positive trending of our gross margin, which has been on a stable upward trajectory and expanded 2.4% sequentially."

"We are excited about the multiple near term catalysts ahead of us. In this fiscal half year, we kept investing in our future and our third production base, Yumen plant is on track to complete construction as scheduled and expected to be operational in the fourth quarter of 2022. Once up and running, Yumen plant will add 200% increase in production capacity in fragrance compounds and bioactive food ingredients and 150% overall revenue growth potential on an annualized basis. In addition, with the successful rollout of our new proprietary vegetable based probiotic powder drink for regulation and improvement of human's overall microbiome and digestive health, stachyose and apple extract based personal care product for female hygiene health, we are expecting growing demand from natural and health -conscious consumers. Our new Yumen Plant and the expansion of Tongchuan plant, coupled with our new product initiatives will enable us to meet more customer demand efficiently, accelerate our global business expansion and deliver lasting long-term value for our shareholders."

1H-2022 Product Categories Summary: Growth vs. Prior Year

	Revenues increase (decrease)	Gross Profits increase (decrease)
Fragrance Compounds	24.9 %	53.9 %
Health Supplements (Powder Drinks)	(28.5 %)	(36.4 %)
Bioactive Food Ingredients	171.8 %	191.1 %

Fragrance Compounds

Revenue from sales of fragrance compound products increased by 24.9% to US$7.4 million from US$6.0 million for the same period in 2021. The increase was primarily attributable to a 64.1% increase in average selling price driven by our product mix shift towards higher value added and higher margin products, such as ambroxide, a key ingredient of fragrance, as well as a 2.8% positive impact from currency exchange, partially offset by a decrease of 26.0% in sales volume due to shortage of material supply.

Gross profit from fragrance compound increased by 53.9% from US$1.2 million to US$1.8 million for the same period in 2021. The increase was attributable to the above referenced factors.

Health Supplements (Powder Drinks)

Revenue from sales of health supplement (powder drinks) products decreased by 28.5% to US$3.3 million from US$4.7 million for the same period in 2021. The decrease was primarily attributable to the decrease in sales volume due to material supply shortage, partially offset by increase in average selling price and positive impact from currency exchange.

Gross profit from health supplement (powder drinks) decreased by 36.4% from US$1.8 million to US$1.2 million for the same period in 2021. The decrease was mainly due to the decrease in sales volume and increase in weighted average unit cost, partially offset by positive impact from currency exchange.

Bioactive Food Ingredients

Revenue from sales of bioactive food ingredient products increased by 171.8% to US$2.9 million from US$1.1 million for the same period in 2021. The increase was mainly attributable to 79.2% and 47.5% increase in average selling price and sales volume due to strong customer demand and sales effort as well as a 2.8% positive impact from currency exchange.

Gross profit of our bioactive food ingredient products increased by 191.1% to $1.1 million from $365,867 for the same period in 2021. This increase was primarily due to the above referenced factors.

General and administrative expenses increased by $319,308, or approximately 47.0%, from $679,635 in the six months ended March 31, 2021, to $998,943 in the same period of 2022, mainly attributable to increase of $335,265 in professional service fees such as directors' and officers' liability insurance, investor relations management, etc. as we become a public company since we completed the IPO in July 2021.

Research and development ("R&D") expenses increased by $57,677, or approximately 53.9%, from $106,998 in the six months ended March 31, 2021, to $164,675 in the same period of 2022. The increase was mainly due to an increase of $69,022 in outsourcing R&D activities to external consulting firms.

Government subsidies received in the form of a grant and recognized as other operating income totaled $542,256 and $446,910 in the six months ended March 31, 2022 and 2021, respectively.

Net income increased from $2.3 million in the six months ended March 31, 2021 to $2.5 million in the same period of 2022.

Net cash used in operating activities during the six months ended March 31, 2022 was $130,577 compared to net cash provided in operating activities of $2.0 million in the same period of 2021.

Diluted earnings per share ("EPS") was $0.30, compared to $0.40 for the same period in 2021.

Investors are encouraged to review the Company's complete financial statements and related disclosures for additional information.  These materials are available at https://www.sec.gov/edgar/browse/?CIK=1816815&owner=exclude.

Subsequent Events

On May 5, 2022, the Company announced that its third production site – Yumen Plant has completed the building structure of the facility as scheduled and forecasted to commence around September 2022.

On June 16, 2022, the Company launched a new cruciferous vegetable based probiotic powder drink that could help regulate digestive system.

Effective June 28, 2022, Jeffery Guzy was appointed as a new independent Director to the Company's Board of Directors and as Chair of the Audit Committee. Mr. Christopher Constable resigned as a director of the Company for personal reasons and stepped down as a member and chairman of the audit committee of the Board.

Investor Conference Call and Webcast

A live webcast to discuss the Company's 1H 2022 financial results will be held on August 1, 2022, beginning at 9:00 a.m. EST. The webcast and accompanying slide presentation may be accessed on the Company's IR website at https://ir.bnlus.com/events-presentations/. The webcast also can be accessed by using the direct link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=1sM1QUxQ

For those unable to listen to the live webcast, a recorded version will be available on the Company's website after the event.

Pre-registration: https://dpregister.com/sreg/10169993/f3e46b2118

Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the operator. Participants may pre-register at any time, up to and including after the time that the call has started.

Those without internet access or unable to pre-register may dial in by calling:

U.S. Toll Free: 1-866-777-2509 | International Toll: 1-412-317-5413

About Bon Natural Life Limited

The Company focuses on the manufacturing of personal care ingredients, such as plant extracted fragrance compounds for perfume and fragrance manufacturers, natural health supplements such as powder drinks and bioactive food ingredient products mostly used as food additives and nutritional supplements by their customers. For additional information, please visit the Company's website at www.bnlus.com.

Safe Harbor 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; product and service demand and acceptance; changes in technology; economic conditions; the growth of the natural, health and personal care market in China and the other international markets the Company plans to serve; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and the international markets the Company plans to serve 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:

In the United States:
Maggie Zhang | Impact IR	Sophie Zhang | Impact IR
Phone: (646) 893-8916	Phone: (786) 953-2513
Email: maggie.zhang@irimpact.com	Email: sophie.zhang@irimpact.com

 

 

 

BON NATURAL LIFE LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
		As Of
		March 31, 2022				September 30, 2021
ASSETS
CURRENT ASSETS
Cash		$	1,609,079			$	1,903,867
Short-term investments			132,114				1,703,314
Accounts receivable, net			7,534,786				6,152,807
Inventories, net			2,143,385				1,596,492
Advance to suppliers, net			3,187,116				4,094,312
Deferred offering costs			-				-
Acquisition deposit			1,000,000				1,000,000
Prepaid expenses and other current assets			95,286				98,960
TOTAL CURRENT ASSETS			15,701,766				16,549,752
Property, plant and equipment, net			23,069,191				19,228,642
Intangible assets, net			416,024				411,056
Right-of-use lease assets, net			171,380				201,007
Deferred tax assets, net			22,774				22,342
TOTAL ASSETS		$	39,381,135			$	36,412,799
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term loans		$	1,615,503			$	41,381
Current portion of long-term loans			1,845,275				448,005
Accounts payable			553,750				380,385
Due to related parties			272,942				245,104
Taxes payable			3,328,986				5,052,018
Deferred revenue			673,974				1,096,101
Accrued expenses and other current liabilities			73,710				41,711
Finance lease liabilities, current			114,216				161,286
Operating lease liability, current			69,167				62,871
TOTAL CURRENT LIABILITIES		$	8,547,523			$	7,528,862
Long-term loans			1,080,402				2,173,532
Finance lease liabilities, noncurrent			-				28,953
Operating lease liability, noncurrent			113,478				146,703
TOTAL LIABILITIES			9,741,403				9,878,050
COMMITMENTS AND CONTINGENCIES
EQUITY
Ordinary shares, $0.0001 par value, 500,000,000 shares authorized, 8,350,381 and 8,330,000 shares issued and outstanding as of March 31, 2022 and September 30, 2021, respectively		$	835			$	833
Additional paid in capital			15,630,251				15,540,433
Statutory reserve			1,050,721				1,050,721
Retained earnings			11,741,354				9,192,676
Accumulated other comprehensive income			710,020				222,221
TOTAL BON NATURAL LIFE LIMITED SHAREHOLDERS' EQUITY			29,133,181				26,006,884
Non-controlling interest			506,551				527,865
Total equity			29,639,732				26,534,749
TOTAL LIABILITIES AND EQUITY		$	39,381,135			$	36,412,799

 

 

 

BON NATURAL LIFE LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)
		For the six months ended March 31,
		2022				2021
REVENUE		$	13,688,400			$	11,698,830
COST OF REVENUE			(9,652,453)				(8,325,148)
GROSS PROFIT			4,035,947				3,373,682
OPERATING EXPENSES
Selling expenses			(83,970)				(52,666)
General and administrative expenses			(998,943)				(679,635)
Research and development expenses			(164,675)				(106,998)
Total operating expenses			(1,247,588)				(839,299)
INCOME FROM OPERATIONS			2,788,359				2,534,383
OTHER INCOME (EXPENSES)
Interest income			589				294
Interest expense			(277,764)				(197,168)
Unrealized foreign transaction exchange loss			(16,994)				(65,691)
Government subsidies			542,256				446,910
Income from short-term investments			12,419				-
Other income			43,532				41,548
Total other income, net			304,038				225,893
INCOME BEFORE INCOME TAX PROVISION			3,092,397				2,760,276
INCOME TAX PROVISION			(562,737)				(465,077)
NET INCOME			2,529,660				2,295,199
Less: net loss attributable to non-controlling interest			(19,018)				(16,200)
NET INCOME ATTRIBUTABLE TO BON NATURAL LIFE LIMITED		$	2,548,678			$	2,311,399
NET INCOME			2,529,660				2,295,199
OTHER COMPREHENSIVE INCOME
Total foreign currency translation adjustment			485,503				406,143
TOTAL COMPREHENSIVE INCOME			3,015,163				2,701,342
Less: comprehensive loss attributable to non-controlling interest			(21,314)				(13,580)
COMPREHENSIVE INCOME ATTRIBUTABLE TO BON NATURAL LIFE LIMITED		$	3,036,477			$	2,714,922
EARNINGS PER SHARE
Basic		$	0.31			$	0.40
Diluted		$	0.30			$	0.40
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic			8,350,381				5,800,000
Diluted			8,386,306				5,800,000

 

 

 

BON NATURAL LIFE LIMITED AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
		For the six months ended March 31,
		2022				2021
Cash flows from operating activities
Net income		$	2,529,660			$	2,295,199
Adjustments to reconcile net income to cash provided by operating activities
Allowance for doubtful accounts			187				6,323
Depreciation and amortization			112,945				117,888
Deferred income tax			(28)				13,879
Amortization of operating lease right-of-use assets			33,122				26,195
Amortization of stock options			89,820				-
Unrealized foreign currency exchange loss			16,994				65,691
Gain on disposal of property and equipment			(745)				-
Changes in operating assets and liabilities:
Accounts receivable			(1,265,109)				(2,898,493)
Inventories			(515,690)				(391,958)
Advance to suppliers, net			977,033				1,738,442
Prepaid expenses and other current assets			(38,795)				(99,108)
Accounts payable			165,741				(760,103)
Operating lease liabilities			(30,589)				(21,975)
Taxes payable			(1,806,543)				1,120,847
Deferred revenue			(440,032)				403,246
Accrued expenses and other current liabilities			41,452				383,696
Net cash provided by (used in) operating activities			(130,577)				1,999,769
Cash flows from investing activities
Purchase of short-term investments			(3,678,199)				-
Proceeds upon redemption of short-term investments			5,273,186				-
Purchase of property and equipment			(10,231)				(715)
Proceeds from sales of property and equipment			1,659
Capital expenditures on construction-in-progress			(3,577,995)				-
Net cash used in investing activities			(1,991,580)				(715)
Cash flows from financing activities
Proceeds from short-term loans			1,608,378				943,517
Proceeds from long-term loans			594,864				685,067
Repayment of short-term loans			(41,945)				(457,729)
Repayment of long-term loans			(339,343)				(109,382)
Proceeds from (repayment of) borrowings from related parties			91,965				(1,391,813)
Proceeds from (repayment of) third party loans			-				(716,574)
Principal payment from (repayment of) capital lease			(89,465)				254,970
Payment for deferred offering costs			-				(155,557)
Net cash provided by (used in) financing activities			1,824,454				(947,501)
Effect of changes of foreign exchange rates on cash			2,915				(64,052)
Net increase (decrease) in cash			(294,788)				987,501
Cash, beginning of year			1,903,867				53,106
Cash, end of year		$	1,609,079			$	1,040,607
Supplemental disclosure of cash flow information
Cash paid for interest expense		$	277,764			$	215,268
Cash paid for income tax		$	785,853			$	1,424
Supplemental disclosure of non-cash investing and financing activities
Amortization of share-based compensation for initial public offering services		$	89,820			$	316,668
Right-of-use assets obtained in exchange for operating lease obligations		$	-			$	255,811

 

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SOURCE Bon Natural Life Limited

FAQ

What were Bon Natural Life's revenue results for 1H-2022?

Bon Natural Life reported a 17.0% revenue increase to US$13.7 million for 1H-2022.

How did the net income of Bon Natural Life change in 1H-2022?

Net income for Bon Natural Life increased by 10.2% to US$2.5 million in 1H-2022.

What is the significance of the Yumen plant for Bon Natural Life?

The Yumen plant is expected to boost Bon Natural Life's production capacity by 200%.

What were the changes in diluted EPS for Bon Natural Life in 1H-2022?

Diluted EPS decreased from $0.40 in 1H-2021 to $0.30 in 1H-2022.

What challenges did Bon Natural Life face regarding health supplements?

Sales of health supplements decreased by 28.5% due to material supply shortages.