Forward Reports Fiscal 2020 Third Quarter Results

Rhea-AI Summary

Forward Industries (NASDAQ:FORD) announced its Q3 2020 financial results, revealing revenues of $9.5 million, down 3.6% from $9.9 million in Q3 2019. The gross margin decreased to 18.6% from 19.1% year-over-year. The net loss widened to $215,000 compared to $104,000 in Q3 2019, translating to a net loss per share of $0.02. Cash and cash equivalents stood at $3.1 million as of June 30, 2020. The CEO acknowledged challenges due to delays in the retail sector but expressed confidence in the company's resilience.

Positive

• Cash and cash equivalents of $3.1 million provide operational liquidity.
• The CEO expressed confidence in the company's future despite current challenges.

Negative

• Revenues decreased by 3.6% from Q3 2019.
• Gross margin fell to 18.6%, indicating reduced profitability.
• Net loss increased to $215,000 from $104,000 year-over-year.

HAUPPAUGE, N.Y., Aug. 14, 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 third fiscal quarter ended June 30, 2020. 

Third Quarter 2020 Financial Highlights 

• Revenues were $9.5 million compared to $9.9 million from the third quarter of 2019 a decrease of 3.6%.
   
• Gross margin decreased to 18.6% compared to 19.1% in the third quarter of 2019.
   
• Net loss was $215 thousand compared to a net loss of $104 thousand in the third quarter of 2019. 
   
• Net loss per share was $0.02 compared to net loss per share of $0.01 for the third quarter of 2019.
   
• Cash and cash equivalents totaled $3.1 million at June 30, 2020.

Terry Wise, Chief Executive Officer of Forward Industries, stated, “Like most other companies, this was a challenging quarter with our business continuing to be adversely impacted by delays within the retail sector and uncertainty which has slowed the growth of our design business. However, overall, I am pleased at the Company’s resilience and performance in spite of these extraordinary trading conditions and am encouraged by recent developments. I continue to have confidence in the future.”

The tables below are derived from the Company’s condensed consolidated financial statements included in its Form 10-Q filed on August 14, 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 quarters ended June 30, 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. 

About Forward Industries

Forward is a fully integrated design, development and manufacturing solution provider 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 design and distribution of carry and protective solutions, primarily for handheld electronic devices, we are now a one-stop shop for design, development and manufacturing solutions serving a wide range of clients in the industrial, commercial and consumer industries.

Contact:        

Forward Industries, Inc.                                        
Anthony Camarda
acamarda@forwardindustries.com                    
(631) 547-3041

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
				June 30,				September 30,
					2020				2019
				(Unaudited)
Assets
Current assets:
	Cash			$	3,084,635			$	3,092,813
	Accounts receivable, net				8,264,935				6,695,120
	Inventories				727,419				1,608,827
	Prepaid expenses and other current assets				502,893				441,502
			Total current assets		12,579,882				11,838,262
Property and equipment, net					219,375				243,002
Intangible assets, net					1,126,299				1,248,712
Goodwill					1,167,427				2,182,427
Investment					-				326,941
Operating lease right of use assets, net					3,409,259				-
Other assets					138,002				255,008
			Total assets	$	18,640,244			$	16,094,352
Liabilities and shareholders' equity
Current liabilities:
	Line of credit			$	1,000,000			$	1,300,000
	Accounts payable				297,098				315,444
	Due to Forward China				3,199,874				3,236,693
	Deferred income				525,763				219,831
	Current portion of notes payable				2,196,621				1,654,799
	Current portion of capital leases payable				24,733				39,941
	Deferred consideration				296,000				834,000
	Current portion of operating lease liability				238,413				-
	Accrued expenses and other current liabilities				625,540				694,972
			Total current liabilities		8,404,042				8,295,680
Other liabilities:
	Capital leases payable, less current portion				15,402				26,438
	Deferred rent				-				60,935
	Operating lease liability, less current portion				3,278,908				-
	Notes payable, less current portion				759,949				-
		Total other liabilities			4,054,259				87,373
			Total liabilities		12,458,301				8,383,053
Commitments and contingencies
Shareholders' equity:
	Common stock, par value $0.01 per share; 40,000,000 shares authorized;
		9,583,851 and 9,533,851 shares issued and outstanding at June 30, 2020
		and September 30, 2019, respectively			95,838				95,338
	Additional paid-in capital				19,074,747				18,936,130
	Accumulated deficit				(12,988,642	)			(11,320,169	)
			Total shareholders' equity		6,181,943				7,711,299
			Total liabilities and shareholders' equity	$	18,640,244			$	16,094,352

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
		For the Three Months Ended June 30,								For the Nine Months Ended June 30,
			2020				2019				2020				2019
Revenues, net		$	9,548,732			$	9,909,452			$	25,872,963			$	28,265,202
Cost of sales			7,773,944				8,014,998				20,925,017				23,756,862
Gross profit			1,774,788				1,894,454				4,947,946				4,508,340
Sales and marketing			464,247				539,072				1,478,880				1,437,047
General and administrative			1,485,447				1,405,249				4,324,798				4,676,748
Goodwill impairment			-				-				1,015,000				-
Loss from operations			(174,906	)			(49,867	)			(1,870,732	)			(1,605,455	)
Fair value adjustment of earn-out consideration			-				-				350,000				-
Fair value adjustment of deferred cash consideration			(3,000	)			-				(12,000	)			-
Interest expense			(37,148	)			(52,216	)			(132,275	)			(150,304	)
Other expense, net			(148	)			(1,979	)			(3,466	)			(9,735	)
Net loss		$	(215,202	)		$	(104,062	)		$	(1,668,473	)		$	(1,765,494	)
Net loss per share:
Basic		$	(0.02	)		$	(0.01	)		$	(0.18	)		$	(0.19	)
Diluted		$	(0.02	)		$	(0.01	)		$	(0.18	)		$	(0.19	)
Weighted average common shares outstanding:
Basic			9,534,407				9,533,851				9,534,034				9,531,422
Diluted			9,534,407				9,533,851				9,534,034				9,531,422

FAQ

What were Forward Industries' Q3 2020 revenues?

Forward Industries reported revenues of $9.5 million for Q3 2020.

How did Forward Industries' gross margin perform in Q3 2020?

The gross margin for Q3 2020 was 18.6%, down from 19.1% in Q3 2019.

What was the net loss for Forward Industries in Q3 2020?

The net loss for Q3 2020 was $215,000, compared to a net loss of $104,000 in Q3 2019.

What is the cash position of Forward Industries as of June 30, 2020?

Forward Industries had cash and cash equivalents totaling $3.1 million as of June 30, 2020.

What challenges did Forward Industries face in Q3 2020?

The company faced challenges due to delays in the retail sector affecting growth.