Fuling Global Inc. Reports 2019 First Half Financial Results
ALLENTOWN, Pennsylvania, October 22, 2019 -- Fuling Global Inc. (NASDAQ: FORK) (“Fuling Global” or the “Company”), a manufacturer and distributor of environmentally friendly plastic and paper foodservice disposable products, today announced financial results for the six months ended June 30, 2019.
|·||Revenues increased by 6% to $70.9 million for the first half of 2019, from $66.8 million for the comparable period last year.|
|·||Gross profit for the first six months of 2019 increased by 61% to $16.7 million, from $10.4 million for the same period last year.|
|·||Net income from continuing operations increased sharply to $7.4 million, or $0.47 per share, compared with $0.9 million, or $0.06 per share, for the first half of 2018.|
|·||Net income attributable to Fuling Global was $7.7 million, or $0.49 per share, for the first half of 2019, compared with $0.4 million, or $0.02 per share, for the same period last year.|
Revenues by Product Category:
|For the six months ended June 30,|
|Cups and plates||20,334||17,910||14||%|
Revenues by Geography:
|For the six months ended June 30,|
Gross profit advanced to $16.7 million, or 24% of total revenue, for the first half of 2019, up from $10.4 million, or 16% of total revenue, for the same period of last year. The increase in gross profit was primarily attributable to unit price declines in raw materials, as well as favorable exchange rates.
Selling expenses were $4.0 million, or 6% of total revenues, in the first half of 2019, compared with $3.7 million, or 5% of total revenues, for the same period of last year. General and administrative expenses were $3.6 million, or 5% of total revenues, in the first half of 2019, compared with $3.5 million, or 5% of total revenues, for the same period of last year. Research and development expenses amounted to $1.9 million, or 3% of total revenues, for the first half of 2019, compared with $1.4 million, or 2% of total revenues, for the same period of last year. The Company expects research and development expenses to remain at similar levels for the second half of 2019, as it continues to seek the use of environmentally friendly materials, develop biodegradable materials, and reduce reliance on fossil-based raw materials.
Total operating expenses were $9.5 million for the first half of 2019, compared with $8.7 million for the same period of last year.
Operating income increased substantially to $7.1 million for the first half of 2019, from $1.7 million for the same period of last year. Operating margin was 10% for the first half of 2019, compared with 3% for the same period of last year.
Total net other income, which includes interest income and expenses, subsidy income and other non-operating income and expenses, was $1.6 million for the first half of 2019, compared with total net other expense of $0.7 million for the same period last year. The difference was primarily related to a one-time subsidy received from the local government in Wenling, China, for the completion of the phase II expansion of the Company’s newest facility in China, which added an additional 400,000 square feet to the initial 600,000 square foot, state-of-the-art plastic serviceware factory.
The Company’s effective tax rate for the first half of 2019 was 15.3%, compared with 13.2% for the same period in 2018.
Net income from continuing operations for the first half of 2019 increased significantly to $7.4 million from $0.9 million in the same period last year. Net income per share from continuing operations for the first half of 2019 increased to $0.47 from $0.06 for the first half of 2018. Net income attributable to Fuling Global was $7.7 million, compared with $0.4 million in the first half of 2018.
“Fuling Global had a very strong first half of 2019, with our focus on producing straws, cups and plates, generating substantial revenue increases,” said Xinfu Hu, Chief Executive Officer. “Significant progress was also made to ensure our ability to effectively and efficiently serve our U.S. customers and to expand to other global markets with the start of production in our Mexico factory in mid-August and the completion of our phase II facility expansion in Wenling. We are in the process of opening a new factory in Indonesia as well, to further mitigate global trade risks.”
“Our first half results demonstrate Fuling Global’s ability to successfully execute our long-term strategic plan,” said Guilan Jiang, Chairwoman. “At the same time, we continue to make great strides toward effecting more efficient purchasing and manufacturing processes, developing new and more environmentally friendly products, and keeping costs as low as possible. We are in a great position to continue on the path of growth through the remainder of 2019 and beyond.”
As of June 30, 2019, the Company had cash and cash equivalents and restricted cash of $7.6 million and $2.1 million, respectively, compared with $4.4 million and $2.4 million, respectively, as of December 31, 2018. Short-term borrowing and bank notes payable were $21.5 million and $2.7 million, respectively, as of June 30, 2019, compared with $19.9 million and $2.9 million, respectively, as of December 31, 2018. Long-term borrowing was $7.1 million as of June 30, 2019, compared with $7.2 million as of December 31, 2018.
Net cash provided by operating activities was $9.2 million for the first half of 2019, compared with $0.7 million for the same period last year. The increase was mainly attributed to the increase in net income of $7.3 million and the reduction of accounts receivable. Net cash used in investing activities was $6.1 million for the first half of 2019, compared with $8.5 million for the same period of last year. Net cash used in financing activities was $0.1 million for the first half of 2019, compared with net cashed provided by financing activities of $5.1 million for the same period last year.
About Fuling Global Inc.
Fuling Global Inc. is a specialized producer and distributor of plastic and paper serviceware for the foodservice industry, with precision manufacturing facilities in the U.S., Mexico and China. The Company's plastic and paper serviceware products include disposable cutlery, drinking straws, cups, plates and other plastic and paper products and are used by more than one hundred customers primarily from the U.S., China and Europe, including Subway, Wendy's, Burger King, Taco Bell, KFC (China only), Walmart, and McKesson. More information about the Company can be found at: http://ir.fulingglobal.com/.
This press release contains information about Fuling Global’s view of its future expectations, plans and prospects that constitute forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. 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 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 annual report and in its other filings with the Securities and Exchange Commission. Fuling Global disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.
|Company Contact:||Investor Relations Contact:|
|Fuling Global Inc.||PondelWilkinson Inc.|
|Gilbert Lee, CFO||Judy Lin Sfetcu / Roger Pondel|
|Email: email@example.com||Email: firstname.lastname@example.org|
|Phone: +1-610-366-8070 x1835||Phone: +1-310-279-5980|
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FULING GLOBAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Six Months Ended
|Cost of goods sold||54,209,044||56,452,983|
|General and administrative expenses||3,641,681||3,549,096|
|Research and development expenses||1,897,415||1,448,730|
|Total operating expenses||9,525,380||8,670,046|
|Income from operations||7,128,251||1,721,596|
|Other income (expense):|
|Foreign currency transaction gain (loss)||75,574||(14,316||)|
|Other income (expense), net||29,847||120,297|
|Total other income (expense), net||1,623,478||(698,734||)|
|Income before income taxes||8,751,729||1,022,862|
|Provision for income taxes||1,340,153||135,422|
|Net income from continuing operations||$||7,411,576||$||887,440|
|Net income (loss) from discontinued operations, net of tax||259,042||(503,517||)|
|Less: net (loss) income attributable to non-controlling interest from continuing operations||(59,841||)||15,944|
|Net income attributable to Fuling Global Inc.||$||7,730,459||$||367,979|
|Other comprehensive income|
|Foreign currency translation loss||(23,496||)||(617,025||)|
|Comprehensive income attributable to Fuling Global Inc.||$||7,706,963||$||(249,046||)|
|Earnings (loss) per share - Basic and diluted|
|Weighted average number of shares - Basic and diluted|
|Continuing operations and discontinued operations||15,795,910||15,780,205|
FULING GLOBAL INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|Cash and cash equivalents||$||7,646,898||$||4,400,402|
|Accounts receivable, net||26,325,411||27,760,956|
|Advances to supplier, net||900,955||1,255,420|
|Prepaid expenses and other current assets||1,290,513||1,394,234|
|Current assets from discontinued operation||20,945||37,761|
|Total Current Assets||60,902,996||59,520,379|
|Property, plant and equipment, net||53,858,069||51,836,633|
|Intangible assets, net||8,084,128||8,157,916|
|Prepayments for construction and equipment purchases||1,001,320||1,222,888|
|Security deposits - long term||1,514,534||1,590,671|
|Right-of-use lease assets||3,429,760||-|
|Non-current assets from discontinued operations||-||13,697|
|LIABILITIES AND SHAREHOLDERS' EQUITY|
|Short term borrowings||$||21,541,520||$||19,890,641|
|Bank notes payable||2,704,064||2,888,053|
|Advances from customers||395,315||393,749|
|Accounts payable - related party||592,992||82,014|
|Accrued and other liabilities||1,414,990||2,121,304|
|Other loans payable - current||3,470,790||2,847,859|
|Due to related party||15,575||12,200|
|Operating lease liabilities - current||832,692||-|
|Current liabilities from discontinued operation||298,724||528,263|
|Total Current Liabilities||44,034,714||47,489,288|
|Deferred tax liability||779,239||577,826|
|Long term borrowings||7,063,341||7,203,357|
|Other loan payable – non-current||2,721,659||2,635,567|
|Operating lease liabilities – non-current||2,739,566||-|
|Common stock: $0.001 par value, 70,000,000 shares authorized,|
15,795,910 and 15,795,910 shares issued and outstanding as of June 30, 2019 and December 31, 2018, respectively
|Additional paid in capital||30,034,987||30,009,545|
|Accumulated other comprehensive loss||(2,495,750||)||(2,472,254||)|
|Total Fuling Global Inc.'s equity||72,420,872||64,688,467|
|Total Shareholders' Equity||72,406,616||64,734,052|
|Total Liabilities and Shareholders' Equity||$||129,745,135||$||122,640,090|