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Forward Reports Fiscal 2022 Third Quarter Results

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Forward Industries, Inc. (NASDAQ:FORD) reported its third-quarter financial results for the period ending June 30, 2022, revealing a 6% increase in revenues to $10.6 million, up from $10.0 million in the same quarter of 2021.

However, gross margin decreased to 18.1% from 21.9% year-over-year.

The company experienced an operating loss of $0.4 million compared to an operating income of $0.3 million last year. Additionally, net loss was $0.4 million, contrasting with a net income of $0.2 million.

Basic and diluted EPS was $(0.04) versus $0.02 in the prior year. Cash reserves improved, totaling $2.3 million as of June 30, 2022, compared to $1.4 million in September 2021.

Positive
  • Revenue growth of 6%, totaling $10.6 million.
  • Increased cash balance of $2.3 million compared to $1.4 million in September 2021.
Negative
  • Gross margin declined to 18.1% from 21.9% year-over-year.
  • Operating loss of $0.4 million compared to operating income of $0.3 million last year.
  • Net loss of $0.4 million compared to net income of $0.2 million in the same quarter last year.
  • Basic and diluted EPS decreased to $(0.04) from $0.02 year-over-year.

HAUPPAUGE, N.Y., Aug. 10, 2022 (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 distributor of carry and protective solutions, today announced financial results for its third quarter ended June 30, 2022.

Third Quarter Fiscal 2022 Financial Highlights

  • Revenues were $10.6 million, an increase of 6.0% from $10.0 million for the three months ended June 30, 2021.

  • Gross margin declined to 18.1% compared to 21.9% for the three months ended June 30, 2021.

  • Operating loss was $0.4 million compared to operating income of $0.3 million for the three months ended June 30, 2021.

  • Net loss was $0.4 million compared to net income of $0.2 million for the three months ended June 30, 2021.

  • Basic and diluted (loss)/earnings per share was $(0.04) compared to $0.02 for the three months ended June 30, 2021.

  • Cash balance of $2.3 million at June 30, 2022 as compared to $1.4 million at September 30, 2021.

Terry Wise, Chief Executive Officer of Forward Industries, stated “Our revenues continued to improve but this was a predictably challenging quarter as the unprecedented logistical challenges continue. Our design division, principally IPS, continued to perform strongly. OEM performed in line with expectations. We have started to implement measures to mitigate the retail supply chain cost pressures, which we expect will help improve the financial performance of our retail division in future periods. I therefore believe that we will close out our fiscal year on a stronger footing despite the significant challenges facing the business.”

The tables below are derived from the Company’s consolidated financial statements included in its Form 10-Q filed on August 10, 2022 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, 2022 and 2021. Please also refer to the Company’s Form 10-K for a discussion of risk factors applicable to the Company and its business. 

Cautionary 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 how we will finish the fiscal year. 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, continued supply chain issues, inability of our design division’s customers to pay for our services, unanticipated issues with our affiliated sourcing agent, issues at Chinese factories that we source our products as a result of the pandemic or otherwise, 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, 2021 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 provider to top tier medical and technology customers worldwide. Through its acquisitions of Intelligent Product Solutions, Inc. and Kablooe Design, Inc., the Company has expanded its ability to design and develop solutions for its existing multinational client base and expand beyond the diabetic product line into 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, medical and consumer industries.

For more information, contact:
Anthony Camarda, CFO, Forward Industries, Inc.
(631) 547-3041, acamarda@forwardindustries.com


FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
       
    June 30, September 30,
     2022   2021 
Assets (Unaudited)  
       
Current assets:   
 Cash $2,277,635  $1,410,365 
 Accounts receivable, net 8,738,264   8,760,715 
 Inventories, net 4,871,734   2,062,557 
 Prepaid expenses and other current assets 483,232   561,072 
       
   Total current assets 16,370,865   12,794,709 
       
Property and equipment, net 234,401   167,997 
Intangible assets, net 1,159,090   1,318,658 
Goodwill 1,758,682   1,758,682 
Operating lease right of use assets, net 3,633,267   3,743,242 
Other assets 72,251   72,251 
       
   Total assets$23,228,556  $19,855,539 
       
Liabilities and shareholders' equity   
       
Current liabilities:   
 Accounts payable$433,412  $391,992 
 Due to Forward China 8,756,217   5,733,708 
 Deferred income 623,395   187,695 
 Current portion of earnout consideration -   25,000 
 Current portion of operating lease liability 415,494   340,151 
 Accrued expenses and other current liabilities 1,075,757   529,497 
   Total current liabilities 11,304,275   7,208,043 
       
Other liabilities:   
 Note payable to Forward China 1,450,000   1,600,000 
 Operating lease liability, less current portion 3,407,626   3,559,053 
 Earnout consideration, less current portion 70,000   45,000 
  Total other liabilities 4,927,626   5,204,053 
       
   Total liabilities 16,231,901   12,412,096 
       
Commitments and contingencies   
       
Shareholders' equity:   
 Common stock, par value $0.01 per share; 40,000,000 shares authorized;   
  10,061,185 shares issued and outstanding at June 30, 2022   
  and September 30, 2021 100,612   100,612 
 Additional paid-in capital 20,062,912   19,914,476 
 Accumulated deficit (13,166,869)  (12,571,645)
       
   Total shareholders' equity 6,996,655   7,443,443 
       
   Total liabilities and shareholders' equity$23,228,556  $19,855,539 
       


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,
  2022   2021   2022   2021 
        
        
Revenues, net$10,588,835  $9,964,514  $32,517,139  $28,077,496 
Cost of sales 8,671,103   7,781,485   25,727,964   21,888,135 
Gross profit 1,917,732   2,183,029   6,789,175   6,189,361 
        
Sales and marketing expenses 664,484   620,737   2,106,263   1,802,134 
General and administrative expenses 1,639,053   1,293,941   5,177,241   5,102,545 
        
(Loss)/income from operations (385,805)  268,351   (494,329)  (715,318)
        
Gain on forgiveness of note payable -   -   -   (1,356,570)
Fair value adjustment of earn-out consideration -   10,000   -   (20,000)
Interest income -   (32,459)  -   (88,760)
Interest expense 30,424   45,802   94,115   138,908 
Other expense, net 2,684   1,421   6,780   3,209 
(Loss)/income before income taxes (418,913)  243,587   (595,224)  607,895 
        
Provision for income taxes -   -   -   - 
        
Net (loss)/income$(418,913) $243,587  $(595,224) $607,895 
        
(Loss)/earnings per share:       
Basic$(0.04) $0.02  $(0.06) $0.06 
Diluted$(0.04) $0.02  $(0.06) $0.06 
        
Weighted average common shares outstanding:       
Basic 10,061,185   9,963,969   10,061,185   9,919,579 
Diluted 10,061,185   10,512,893   10,061,185   10,423,108 
        


FAQ

What were Forward Industries' revenues for Q3 2022?

Forward Industries reported revenues of $10.6 million for the third quarter of 2022, a 6% increase from $10.0 million in Q3 2021.

How did Forward Industries' gross margin change in Q3 2022?

The gross margin for Forward Industries declined to 18.1% in Q3 2022, down from 21.9% in the same quarter of the previous year.

What was the net loss reported by Forward Industries in Q3 2022?

Forward Industries experienced a net loss of $0.4 million in the third quarter of 2022, compared to a net income of $0.2 million in Q3 2021.

What is the basic and diluted earnings per share for Forward Industries in Q3 2022?

The basic and diluted earnings per share for Forward Industries in Q3 2022 was $(0.04), a decrease from $0.02 in Q3 2021.

What was Forward Industries' cash balance as of June 30, 2022?

As of June 30, 2022, Forward Industries reported a cash balance of $2.3 million.

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