Press Releases

Fuling Global Inc. Reports First Quarter of 2016 Financial Results

Company to Host Earnings Conference Call on Tuesday, May 17, 8:00 am ET

ALLENTOWN, Pa., May 16, 2016 /PRNewswire/ -- Fuling Global Inc. (NASDAQ: FORK) ("Fuling Global" or the "Company"), a specialized producer and distributor of environmentally-friendly plastic serviceware, with precision manufacturing facilities in both the U.S. and China, today announced its financial results for the three months ended March 31, 2016.

Mr. Xinfu Hu, Chief Executive Officer of Fuling Global, commented, "Our first quarter results were, once again, highlighted by increase in sales volume, which grew by 4.6% to 7,418 tons and offset the 4.7% decrease in average selling price ("ASP") resulting from decline in crude oil price. Both gross profit and gross margin increased year-over-year with improvement in gross margin across all product categories. Net income attributable to Fuling Global was $0.7 million, down from the $1.2 million a year ago as a result of increased SG&A expenses and provision for income taxes that more than offset the increase in gross profit."

Ms. Guilan Jiang, Chairwoman of Fuling Global, added, "While putting the IPO proceeds to work, including the $10.2 million purchase of a 32.86-acre land parcel for a new factory in Wenling City and the ongoing expansion at our Allentown facility, we are setting the stage for growth in years to come. We look forward to continuing working with our suppliers, customers, partners and shareholders to take our business to the next level."      

First Quarter of 2016 Financial Highlights

Please note, certain expense items, primarily expenses associated with ocean freight, were previously reported as selling expenses and have been reclassified as cost of goods sold. As a result, cost of goods sold, gross profit, gross margin, selling expenses, and total operating expenses for 2015 have been adjusted retrospectively.



For the Three Months Ended March 31,

($ millions, except per share data)


2016


2015


% Change

Revenues


$20.58


$20.64


-0.3%

Gross profit


$5.2


$4.6


13.3%

Gross margin


25.3%


22.3%


3.0%

Operating margin


5.3%


6.5%


-1.2%

Net income attributable to Fuling Global


$0.7


$1.2


-39.4%

Diluted earnings per share


$0.05


$0.11


-55.1%

  • Revenues were essentially unchanged at $20.6 million for the first quarter of 2016, with increase in sales volume offsetting decrease in ASP.
  • Total sales volume increased by 4.6% to 7,418 tons for the three months ended March 31, 2016 from 7,092 tons for the same period of last year. The increase in total sales volume was primarily related to increased sales of cups and plates and other products and partially offset by decline in sales of cutlery and straws.
  • Blended ASP decreased by 4.7% to $2.77 per kilogram for the three months ended March 31, 2016 from $2.91 per kilogram for the same period of last year. The decrease in ASP was across all product categories as a result of decrease in crude oil prices.
  • Gross profit increased by 13.3% to $5.2 million for the three months ended March 31, 2016 from $4.6 million for the same period of last year. Gross margin was 25.3% for the three months ended March 31, 2016, compared to 22.3% for the same period of last year. The increase in gross margin was across all product categories, particularly for straws.
  • Net income attributable to Fuling Global was $0.7 million, or $0.05 per basic and diluted share, for the three months ended March 31, 2016, compared to $1.2 million, or $0.11 per basic and diluted share, for the same period of last year.

First Quarter of 2016 Financial Results

Revenues

For the three months ended March 31, 2016, total revenues were essentially unchanged at $20.6 million with increase in overall sales volume offsetting by decline in ASP. Overall sales volume increased by 326 tons, or 4.6%, to 7,418 tons for the three months ended March 31, 2016 from 7,092 tons for the same period of last year. The increase in overall sales volume was primarily related to increased sales of cups and plates and other products and partially offset by decline in sales of cutlery and straws. Blended ASP decreased by $0.14 per kilogram, or 4.7%, to $2.77 per kilogram for the three months ended March 31, 2016 from $2.91 per kilogram for the same period of last year. The decrease in ASP was across all product categories as a result of decrease in crude oil prices. 



For the Three Months Ended March 31,



2016



2015


Revenues
($'000)


COGS
($'000)


Gross
Margin (%)


Revenues
($'000)


COGS
($'000)


Gross
Margin (%)

Cutlery

$

11,680


$

8,891


24%


$

12,505


$

9,529


24%

Straws


2,095



1,356


35%



2,521



1,933


23%

Cups and plates


5,504



4,048


26%



4,869



3,891


20%

Others products


1,299



977


25%



744



584


22%

Tax





101








109



Total

$

20,578


$

15,373


25.3%


$

20,639


$

16,046


22.3%

Cutlery, straws, cups and plates, and other products accounted for 56.8%, 10.2%, 26.7%, and 6.3% of total revenues for the three months ended March 31, 2016, compared to 60.6%, 12.2%, 23.6%, and 3.6% for the same period of last year, respectively. 

On a geographical basis, sales in Fuling Global's largest market, the U.S., decreased a bit to $19.5 million for the three months ended March 31, 2016 from $19.6 million for the same period of last year. Sales in Europe increased by 9.1% to $0.4 million while sale in Canada increased by 18.6% to $0.2 million for the three months ended March 31, 2016. Sales in China was $0.3 million, versus $nil for the same period of last year.



For the Three Months Ended March 31,



2016



2015



Y/Y Change



Revenues ($'000)


% of Total



Revenues ($'000)


% of Total



Amount($'000)


%

U.S.

$

19,475


94.6%


$

19,696


95.4%


$

(221)


-1.1%

Europe


434


2.1%



398


1.9%



36


9.1%

Canada


205


1.0%



173


0.8%



32


18.6%

China


345


1.7%



-


0.0%



345


NA

Others


119


0.6%



372


1.8%



(253)


-68.0%

Total

$

20,578


100.0%


$

20,639


100.0%


$

(61)


-0.3%

Gross profit

Total cost of goods sold decreased by $0.7 million, or 4.2%, to $15.4 million for the three months ended March 31, 2016 from $16.0 million for the same period of last year. Gross profit increased by $0.6 million, or 13.3%, to $5.2 million for the three months ended March 31, 2016 from $4.6 million for the same period of last year. Gross margin was 25.3% for the three months ended March 31, 2016, compared to 22.3% for the same period of last year. The increase in gross margin was across all product categories, particularly for straws. Gross margins for cutlery, straws, cups and plates, and other products were 23.9%, 35.3%, 26.4%, and 24.8%, respectively, for the three months ended March 31, 2016, compared to 23.8%, 23.3%, 20.1%, and 21.6%, respectively, for the same period of last year.

Operating income

Selling expenses increased by $0.25 million, or 18.3%, to $1.63 million for the three months ended March 31, 2016 from $1.38 million for the same period of last year. The increase in selling expenses was due to increase in sales commission and export credit insurance cost. General and administrative expenses increased by $0.53 million, or 34.4%, to $2.06 million for the three months ended March 31, 2016 from $1.53 million for the same period of last year. The increase in general and administrative expenses was due to professional fees related to being a public company as well as increase in administrative expenses at our Allentown facility. Research and development expenses increased by $0.1 million, or 26.0%, to $0.4 million for the three months ended March 31, 2016 from $0.3 million for the same period of last year. As a result, total operating expenses increased by $0.9 million, or 26.7%, to $4.1 million for the three months ended March 31, 2016 from $3.2 million for the same period of last year.

Operating income decreased by $0.25 million, or 19.0%, to $1.09 million for the three months ended March 31, 2016 from $1.34 million for the same period of last year. Operating margin was 5.3% for the three months ended March 31, 2016, compared to 6.5% for the same period of last year.

Income before income taxes

After adjustment for interest income and expenses, subsidy income and other non-operating income and expenses, income before income taxes decreased by $0.34 million, or 24.5%, to $1.03 million for the three months ended March 31, 2016 from $1.37 million for the same period of last year.

Provision for income taxes was $0.3 million for the three months ended March 31, 2016, compared to $0.1 million for the same period of last tear.  

Net income

Net income decreased by $0.5 million, or 42.0%, to $0.7 million for the three months ended March 31, 2016 from $1.2 million for the same period of last year. After deduction of non-controlling interest, net income attributable to Fuling Global was $0.7 million, or $0.05 per basic and diluted share, for the three months ended March 31, 2016, compared to $1.2 million, or $0.11 per basic and diluted share, for the same period of last year.

Financial Condition

As of March 31, 2016, the Company had cash and cash equivalents, restricted cash, and certificates of deposits of $8.4 million, $1.6 million, and $3.3 million, respectively, compared to $15.6 million, $2.1 million, and $3.2 million, respectively at the end of 2015. Short-term borrowing and bank notes payable were $17.9 million and $2.9 million, respectively, as of March 31, 2016, compared to $15.3 million and $2.8 million, respectively, at the end of 2015.

Net cash used in operating activities was $2.7 million for the three months ended March 31, 2016, compared to $2.8 million for the same period of last year.

Net cash used in investing activities was $7.4 million for the three months ended March 31, 2016, compared to $2.5 million for the same period of last year.

Net cash provided by financing activities was $2.8 million for the three months ended March 31, 2016, compared to $5.4 million for the same period of last year.

Recent Updates

On April 12, 2016, the Company announced that it has purchased a 32.86-acre land parcel for its newest factory in Wenling, China for approximately $10.24 million. The Company anticipates that it will complete construction, equipment installation and testing and will ultimately commence commercial production in the new factory in the first quarter of 2017. 

On March 8, 2016, the Company provided an update on the use of proceeds from its initial public offering (the "IPO") and announced that it has disbursed approximately $11 million of the IPO proceeds to increase the registered capital of Taizhou Fuling Plastics Co., Ltd. ("Taizhou Fuling") from $11.11 million to $21.63 million. Taizhou Fuling is a PRC company that is wholly owned by the Company through Total Faith Holdings Limited. The Wenling Bureau of Commerce had granted Taizhou Fuling official approval for the increase in registered capital. The Company is also investing approximately $8 million of the IPO proceeds in its business in the United States.

On March 3, 2016, Gilbert Lee, the Company's Chief Financial Officer, presented at VirtualInvestorConferences.com and provided a comprehensive overview of the Company for investors.

On January 12, 2016, the Company announced that it had hosted a team of scientists from the Chinese Academy of Sciences' Technical Institute of Physics and Chemistry ("TIPC") and Chinese Academy of Engineering ("CAE"), including CAE Academician Yicheng Wu, TIPC Deputy Director Yong Huang and TIPC NRCEP Chief Engineer Junhui Ji. The purposes of the meeting were to review 2015 accomplishments and set directions in 2016 for the Company's Academician and Expert Workstation (the "Workstation") and to further expand the scope of cooperation and collaboration through the Workstation platform in jointly developing new plastics materials and technologies.

Earnings Conference Call

The Company will host its first quarter of 2016 financial results conference call at 8:00 am Eastern Time (5:00 am Pacific Time/8:00 pm Beijing Time) on Tuesday, May 17, 2016. To attend the call, please use the information below for either dial-in access or webcast access. When prompted on dial-in, ask for "Fuling Global Inc./ FORK".

Conference Call


Date:

Tuesday, May 17, 2016

Time:

8:00 am ET, U.S.

International Toll Free:

United States: +1 888-346-8982

Mainland China: 400-120-1203

Hong Kong: 800-905-945

International: +1 412-902-4272

Conference ID:

Fuling Global Inc./FORK

Please dial in at least fifteen minutes before the call to ensure timely participation. For those unable to participate, an audio replay of the conference call will be available beginning approximately one hour after the end of the live call through May 24, 2016. The audio replay can be accessed by dialing +1-877-344-7529 within the United States or +1-412-317-0088 internationally, and entering access code No. 10086390.

About Fuling Global Inc.

Fuling Global Inc. ("Fuling Global") is a specialized producer and distributor of environmentally friendly plastic serviceware, with precision manufacturing facilities in both the U.S. and China. The Company's plastic serviceware products include disposable cutlery, drinking straws, cups, plates and other plastic products and are used by more than one hundred customers primarily from the U.S. and Europe, including Subway, Wendy's, Burger King, KFC (China only), Walmart, McKesson, and Woolworths. More information about the Company can be found at: http://ir.fulingglobal.com/.

Forward-Looking Statements

This press release contains information about Fuling Global's view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its application of IPO proceeds, its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets into its portfolio of software and services, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. Fuling Global encourages you to review other factors that may affect its future results in Fuling Global's registration statement and in its other filings with the Securities and Exchange Commission.

For more information, please contact:

At the Company:
Gilbert Lee, CFO
Email: ir@fulingplasticusa.com
Phone: +1-610-366-8070x1835
Web: http://ir.fulingglobal.com/

Investor Relations:
Tina Xiao                            
Weitian Group LLC
Email: fork@weitian-ir.com
Phone: +1-917-609-0333

 

 

 

FULING GLOBAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

 



March 31,



December 31,




2016



2015









ASSETS






Current Assets:









Cash and cash equivalents


$

8,413,443



$

15,573,554


Restricted cash



1,647,608




2,129,162


Certificates of deposit



3,312,321




3,186,892


Accounts receivable, net



15,116,039




14,725,030


Advances to supplier, net



565,088




312,328


Inventories, net



11,924,289




13,493,685


Prepaid expenses and other current assets



1,001,796




425,477


Total Current Assets



41,980,584




49,846,128











Property, plant and equipment, net



22,276,571




21,556,866


Intangible assets, net



1,780,262




1,778,264


Prepayments for land use rights and construction



6,148,057




-


Other non-current assets



2,380,259




2,228,900


Deferred tax assets



431,716




319,252


                    Total Assets


$

74,997,449



$

75,729,410




















LIABILITIES AND SHAREHOLDERS' EQUITY















Current Liabilities:









Short term borrowings


$

17,895,325



$

15,264,827


Bank notes payable



2,908,111




2,839,783


Advances from customers



913,561




597,226


Accounts payable



6,827,051




10,972,851


Accrued and other liabilities



1,581,702




1,808,135


Taxes payable



564,156




743,147


Loan from third parties



-




184,851


Total Current Liabilities



30,689,906




32,410,820











                    Total  Liabilities



30,689,906




32,410,820











Commitments and contingencies


















Shareholders' Equity









Common stock: $0.001 par value, 70,000,000 shares authorized,
15,732,795 shares issued and outstanding as of March 31, 2016 and December 31, 2015



15,733




15,733


Additional paid in capital



29,756,758




29,722,127


Statutory reserve



2,998,684




2,868,844


Retained earnings



10,802,072




10,182,213


Accumulated other comprehensive income



626,182




392,450


Total Fuling Global Inc.'s equity



44,199,429




43,181,367











Noncontrolling interest



108,114




137,223


                     Total Shareholders' Equity



44,307,543




43,318,590











            Total Liabilities and Shareholders' Equity


$

74,997,449



$

75,729,410


 

 

FULING GLOBAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

(UNAUDITED)

 




For the Three Months Ended March 31,




2016



2015









Revenues


$

20,577,819



$

20,638,516


Cost of goods sold



15,372,996




16,045,597


  Gross Profit



5,204,823




4,592,919











Operating Expenses









  Selling expenses



1,631,533




1,378,971


  General and administrative expenses



2,064,559




1,536,248


  Research and development expenses



418,356




332,139


   Total operating expenses



4,114,448




3,247,358











   Income from Operations



1,090,375




1,345,561











Other Income (Expense):









   Interest income



6,613




6,069


   Interest expense



(201,684)




(306,473)


   Subsidy income



40,869




60,221


   Foreign currency transaction gain



59,789




227,011


   Other income (expense), net



37,652




36,816


Total other income (expense), net



(56,761)




23,644











Income Before Income Taxes



1,033,614




1,369,205











Provision for Income Taxes



313,024




127,483











Net Income


$

720,590



$

1,241,722











Less: net (loss) income attributable to noncontrolling interest



(29,109)




3,739











Net income attributable to Fuling Global Inc.



749,699




1,237,983











Other Comprehensive Income









Foreign currency translation gain



233,732




163,471


Comprehensive income attributable to Fuling Global Inc.


$

983,431



$

1,401,454











Earnings per share









Basic and diluted


$

0.05



$

0.11











Weighted average number of shares









Basic and diluted



15,732,795




11,666,667











Cash dividends per share









Basic and diluted


$

-



$

0.88


 

 

FULING GLOBAL INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

 




For the Three Months Ended March 31,




2016



2015


CASH FLOWS FROM OPERATING ACTIVITIES









  Net income


$

720,590



$

1,241,722


  Adjustments to reconcile net income to net cash









      provided by operating activities:









  Stock based compensation



34,631




-


  Deferred tax benefit



(112,464)




-


  Depreciation and amortization



619,319




536,522


  Bad debt provisions



5,503




10,884


  Gain on disposal of fixed assets



(12,888)




-


  Changes in operating assets:









       Accounts receivable



(335,806)




1,051,566


       Advances to suppliers



(285,218)




(2,188,453)


       Inventories



1,588,607




740,527


       Other assets



(634,938)




201,035


  Changes in operating liabilities:









       Accounts payable



(4,151,850)




(4,130,730)


       Advance from customers



309,220




62,200


       Taxes payable



(180,977)




(139,457)


       Accrued and other liabilities



(229,848)




(233,380)


      Net cash used in operating activities



(2,666,119)




(2,847,564)











CASH FLOWS FROM INVESTING ACTIVITIES









  Purchase of property and equipment



(1,207,431)




(248,933)


  Cash receipts from disposal property and equipment



19,602




-


  Cash invested in certificates of deposit



(103,046)




(2,014,072)


  Prepayments for land use rights and construction



(6,062,422)




-


  Purchase of intangible assets



-




(268,227)


  Net cash used in investing activities



(7,353,297)




(2,531,232)











CASH FLOWS FROM FINANCING ACTIVITIES









  Proceeds from short-term borrowings



9,682,986




18,021,538


  Repayments of short-term borrowings



(7,187,968)




(14,409,930)


  Proceeds from bank notes payable



1,778,440




1,492,038


  Repayments of bank notes payable



(1,729,451)




(1,462,305)


  Repayment of third party borrowing



(183,474)




-


  Repayments of loans from related parties



-




(38,285)


  Change of restricted cash



488,632




1,768,444


    Net cash provided by financing activities



2,849,165




5,371,500











EFFECT OF EXCHANGE RATES CHANGES ON CASH



10,140




169,500











NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS



(7,160,111)




162,204











CASH AND CASH EQUIVALENTS, BEGINNING OF THE PERIOD



15,573,554




1,399,714











CASH AND CASH EQUIVALENTS, ENDING OF THE PERIOD


$

8,413,443



$

1,561,918











SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:









    Cash paid during the period for:









    Interest paid


$

244,975



$

306,473


    Income tax paid


$

609,402



$

422,743


 

 

To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/fuling-global-inc-reports-first-quarter-of-2016-financial-results-300269100.html

SOURCE Fuling Global Inc.