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Forward Reports Fiscal 2023 First Quarter Results

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Forward Industries, Inc. (NASDAQ:FORD) announced its first-quarter results for the fiscal year 2023, reporting revenues of $10.8 million, a 6.9% decline from $11.6 million in Q1 FY 2022. The gross margin fell to 17.7% compared to 22.5%% in the same quarter last year. The company faced an operating loss of $0.5 million, down from operating income of $0.2 million in Q1 FY 2022. Net loss was $0.4 million, contrasting with net income of $0.2 million a year prior, leading to a basic and diluted loss per share of $(0.04). Cash reserves decreased from $2.6 million to $2.3 million.

Positive
  • Growth in the design division.
Negative
  • Revenue decreased by 6.9% year-over-year.
  • Gross margin fell from 22.5% to 17.7%.
  • Operating loss of $0.5 million compared to an operating income of $0.2 million.
  • Net loss of $0.4 million vs. net income of $0.2 million in Q1 FY 2022.
  • Cash balance decreased from $2.6 million to $2.3 million.

HAUPPAUGE, N.Y., Feb. 14, 2023 (GLOBE NEWSWIRE) -- Forward Industries, Inc. (NASDAQ:FORD), a global design, manufacturing, sourcing and distribution group, today announced financial results for its first quarter ended December 31, 2022.

First Quarter Fiscal Year 2023 Financial Highlights  

  • Revenues were $10.8 million, a decrease of 6.9% from $11.6 million for the first quarter of fiscal year 2022.

  • Gross margin declined to 17.7% compared to 22.5% for the first quarter of fiscal year 2022.

  • Operating loss was $0.5 million compared to operating income of $0.2 million for the first quarter of fiscal year 2022.

  • Net loss was $0.4 million compared to net income of $0.2 million for the first quarter of fiscal year 2022.

  • Basic and diluted (loss)/earnings per share was $(0.04) compared to $0.02 for the first quarter of fiscal year 2022.

  • Cash balance of $2.3 million at December 31, 2022 as compared to $2.6 million at September 30, 2022.

Terry Wise, Chief Executive Officer of Forward Industries, stated, “This has clearly been a disappointing quarter and start to the fiscal year. Whilst the design division continued to grow, the legacy and logistical challenges within the retail and the OEM divisions have impacted the group’s performance. We are actively addressing these complex issues, and I am confident that in time these will be reflected in a positive performance.”

The tables below are derived from the Company’s consolidated financial statements included in its Form 10-Q filed on February 14, 2023 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 December 31, 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 optimism for improved performance in fiscal year 2023. 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, loss of additional customers, 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. 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, 2022 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 global design, manufacturing, sourcing and distribution group serving 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
       
    December 31, September 30,
    2022 2022
Assets
(Unaudited)  
       
Current assets:   
 Cash$2,331,806  $2,575,522 
 Accounts receivable, net 8,523,079   7,542,666 
 Inventories, net 4,138,879   3,801,030 
 Prepaid expenses and other current assets 394,343   417,605 
       
   Total current assets 15,388,107   14,336,823 
       
Property and equipment, net 261,917   241,146 
Intangible assets, net 1,052,711   1,105,901 
Goodwill 1,758,682   1,758,682 
Operating lease right of use assets, net 3,328,047   3,427,726 
Other assets 68,737   68,737 
       
   Total assets$21,858,201  $20,939,015 
       
Liabilities and shareholders' equity   
       
Current liabilities:   
 Accounts payable$576,449  $268,160 
 Due to Forward China 9,475,932   7,713,880 
 Deferred income 334,588   438,878 
 Current portion of earnout consideration -   25,000 
 Current portion of operating lease liability 387,222   377,940 
 Accrued expenses and other current liabilities 694,644   1,153,906 
   Total current liabilities 11,468,835   9,977,764 
       
Other liabilities:   
 Note payable to Forward China 1,350,000   1,400,000 
 Operating lease liability, less current portion 3,149,279   3,249,824 
 Earnout consideration, less current portion 30,000   45,000 
  Total other liabilities 4,529,279   4,694,824 
       
   Total liabilities 15,998,114   14,672,588 
       
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 December 31, 2022   
  and September 30, 2022 100,612   100,612 
 Additional paid-in capital 20,139,646   20,115,711 
 Accumulated deficit (14,380,171)  (13,949,896)
       
   Total shareholders' equity 5,860,087   6,266,427 
       
   Total liabilities and shareholders' equity$21,858,201  $20,939,015 
       


 
FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
  
 For the Three Months Ended December 31,
 2022 2021
    
    
Revenues, net$10,809,679  $11,613,741 
Cost of sales 8,890,978   8,994,973 
Gross profit 1,918,701   2,618,768 
    
Sales and marketing expenses 690,300   737,677 
General and administrative expenses 1,695,278   1,666,877 
    
(Loss)/income from operations (466,877)  214,214 
    
Fair value adjustment of earnout consideration (40,000)  - 
Interest expense 27,958   32,828 
Other (income)/expense, net (24,560)  1,362 
(Loss)/income before income taxes (430,275)  180,024 
    
Provision for income taxes -   - 
    
Net (loss)/income$(430,275) $180,024 
    
(Loss)/earnings per share:   
Basic$(0.04) $0.02 
Diluted$(0.04) $0.02 
    
Weighted average common shares outstanding:   
Basic 10,061,185   10,061,185 
Diluted 10,061,185   10,337,113 
    


FAQ

What were Forward Industries' revenues in Q1 FY 2023?

Forward Industries reported revenues of $10.8 million for the first quarter of fiscal year 2023.

How much did the gross margin decline for Forward Industries in Q1 FY 2023?

The gross margin for Forward Industries declined to 17.7% in Q1 FY 2023, down from 22.5% in Q1 FY 2022.

What was the net loss for Forward Industries in Q1 FY 2023?

Forward Industries reported a net loss of $0.4 million for the first quarter of fiscal year 2023.

What is the EPS for Forward Industries for the first quarter of fiscal year 2023?

The earnings per share for Forward Industries was $(0.04) in Q1 FY 2023.

How did Forward Industries' cash balance change by December 31, 2022?

The cash balance of Forward Industries decreased from $2.6 million on September 30, 2022, to $2.3 million on December 31, 2022.

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