Exhibit 99.1

  

 

 

 

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.

 

Financial Highlights:

·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, 
  2019   2018   Y/Y  
  ($’000)   ($’000)   Change 
Cutlery  $29,524   $33,222    (11%)
Straws   16,050    10,647    51%
Cups and plates   20,334    17,910    14%
Others   4,955    5,065    (2%)

 

Revenues by Geography:

  For the six months ended June 30, 
  2019   2018   Y/Y
 
  ($’000)   ($’000)   Change 
United States  $61,654   $56,795    9%
China   4,047    5,242    (23%)
Europe   2,251    1,885    19%
Canada   1,018    1,834    (44%)
Other countries   1,893    1,089    74%

 

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.”

 

Financial Condition

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/.

 

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 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: glee@fulingusa.com Email: jsfetcu@pondel.com
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

(UNAUDITED)

 

 

For the Six Months Ended

June 30,

 
   2019   2018 
Revenues  $70,862,675   $66,844,625 
Cost of goods sold   54,209,044    56,452,983 
Gross profit   16,653,631    10,391,642 
Operating expenses          
Selling expenses   3,986,284    3,672,220 
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):          
Interest income   11,140    22,557 
Interest expense   (838,644)   (827,272)
Subsidy income   2,345,561    -   
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 
Discontinued operations:          
Net income (loss) from discontinued operations, net of tax   259,042    (503,517)
Net income   7,670,618    383,923 
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          
Continuing operations  $0.47   $0.06 
Discontinued operations  $0.02   $(0.03)
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

 

           
    

June 30,

2019

    

December 31,

2019

 
   (Unaudited)    (Audited) 
ASSETS          
Current Assets:          
Cash and cash equivalents  $7,646,898   $4,400,402 
Restricted cash   2,141,081    2,396,993 
Accounts receivable, net   26,325,411    27,760,956 
Advances to supplier, net   900,955    1,255,420 
Inventories, net   22,061,669    22,274,613 
Security deposits   515,524    -   
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 
Other assets   954,328    297,906 
Right-of-use lease assets   3,429,760    -   
Non-current assets from discontinued operations   -      13,697 
Total Assets  $129,745,135   $122,640,090 
LIABILITIES AND SHAREHOLDERS' EQUITY          
Current Liabilities:          
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   12,351,799    18,186,400 
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 
Taxes payable   191,924    247,635 
Deferred gains   224,329    291,170 
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    -   
Total  Liabilities   57,338,520    57,906,038 
Shareholders' Equity          
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
   15,797    15,797 
Additional paid in capital   30,034,987    30,009,545 
Statutory reserve   6,349,766    5,532,945 
Retained earnings   38,516,072    31,602,434 
Accumulated other comprehensive loss   (2,495,750)   (2,472,254)
Total Fuling Global Inc.'s equity   72,420,872    64,688,467 
Non-controlling interest   (14,256)   45,585 
Total Shareholders' Equity   72,406,616    64,734,052 
Total Liabilities and Shareholders' Equity  $129,745,135   $122,640,090