Exhibit 99.1

 

 

Fuling Global Inc. Reports 2019 Financial Results

 

- Net Income Attributable to Fuling Global Increases 52.2%; Revenues Advance 9% -

 

WENLING, Zhejiang Province, China and ALLENTOWN, Pennsylvania, April 15, 2020 -- 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 sharply higher financial results for the twelve months ended December 31, 2019.

 

Full Year 2019 Financial Highlights:

 

Revenues increased 9.0% to $151.1 million, from $138.7 million for 2018.

 

Gross profit grew 26.4% to $37.6 million, from $29.8 million for 2018.

 

Net income from continuing operations increased 46.3% to $14.4 million, or $0.91 per share, compared with $9.8 million, or $0.62 per share, for 2018.

 

Net income attributable to Fuling Global increased 52.2% to $15.0 million, or $0.95 per share, compared with $9.9 million, or $0.62 per share, for 2018.

 

“The positive results for 2019 reflected our focus on producing high-quality and environmentally friendly straws, cups and plates for a growing global market,” said Xinfu Hu, Chief Executive Officer of Fuling Global. “We continued to make progress enhancing our manufacturing footprint with the opening of our newest plant in Indonesia, which is now our largest production plant outside of China. This state-of-the-art facility is currently manufacturing straws, and has the capability to produce sauce cups, take-out boxes, paper bags and paper cups. As we continue to penetrate new geographic markets, this plant enables Fuling Global to even better serve our growing worldwide customer base.”

 

“We had a strong 2019 by successfully executing on our long-term strategic plan,” said Guilan Jiang, Chairwoman of Fuling Global. “Our strategy, focused on highly efficient manufacturing and development of an increasing number of environmentally friendly products to meet growing demand, puts us in a solid position for long-term growth and shareholder value enhancement. Cups and plates represented our largest growth category in 2019, as the market increasingly favors environmentally friendly products, versus Styrofoam. During the first quarter of 2020, our facilities in China experienced disruption because of the COVID-19 outbreak, but since the end of March they have been up and running at full capacity,” Ms. Jiang added.

 

Revenues by Product Category:

 

   For the twelve months ended December 31, 
   2019   2018   Y/Y 
   ($’000)   ($’000)   Change 
Cups and plates  $48,126   $37,439    29%
Cutlery   68,649    66,559    3%
Straws   21,888    23,573    (7)%
Others   12,450    11,093    12%

 

 

 

 

Revenues by Geography:

 

   For the twelve months ended December 31, 
   2019   2018   Y/Y 
   ($’000)   ($’000)   Change 
United States  $129,660   $118,308    10%
China   10,220    8,286    23%
Canada   5,575    1,636    241%
Europe   1,457    6,622    (78)%
Other countries   4,201    3,812    10%

 

Gross profit for 2019 advanced to $37.6 million, or 24.9% of total revenue, from $29.8 million, or 21.5% of total revenue, for the comparable period in 2018. The increase in gross profit was primarily attributable to lower raw material unit cost, offset by increased labor cost.

 

Selling expenses were $8.9 million, or 5.9% of total revenues, for 2019, compared with $7.8 million, or 5.6% of total revenues, for the prior year. General and administrative expenses were $9.5 million, or 6.3% of total revenues, for 2019, compared with $8.3 million, or 6.0% of total revenues, for 2018. Research and development expenses amounted to $3.9 million, or 2.6% of total revenues, for 2019, compared with $3.4 million, or 2.5% of total revenues, for the prior year. The Company expects to increase its research and development expenditures approximately proportionate to the expected revenue increases, as it continues to seek the use of environmentally friendly materials, develop new biodegradable materials, and reduce reliance on fossil-based raw materials.

 

Total operating expenses were $22.3 million for 2019, compared with $19.6 million for the prior year.

 

Operating income increased substantially to $15.4 million for 2019, from $10.2 million for 2018. Operating margin rose to 10.2% of total revenues for 2019, compared with 7.3% for 2018.

 

Total net other income, which includes interest income and expenses, subsidy income and other non-operating income and expenses, was $1.6 million for 2019, compared with total net other income of $0.8 million for 2018. The difference primarily related to a subsidy income of approximately $3.0 million received from the Wenling, China government in 2019, compared with approximately $1.7 million in 2018, offset by foreign currency transaction gain of $0.3 million in 2019 versus $0.8 million in 2018. The subsidy income received was for the completion of the Company’s expansion of its newest facility in China, which added an additional 400,000 square feet to the initial 600,000 square feet of the state-of-the-art plastic serviceware manufacturing factory. All subsidies received were one-time grants and may not occur again in the future.

 

The Company’s effective tax rate for 2019 was 15.1%, compared with 10.3% for in 2018. The increase was primarily due to more taxable income generated from the Company’s Chinese subsidiaries in 2019 compared with 2018.

 

Strong Balance Sheet

 

As of December 31, 2019, the Company had cash and cash equivalents and restricted cash of $8.6 million and $1.1 million, respectively, compared with $4.4 million and $2.4 million, respectively, as of December 31, 2018. Short-term borrowings and bank notes payable were reduced to $17.2 million and $1.8 million, respectively, as of December 31, 2019, compared with $19.9 million and $2.9 million, respectively, as of December 31, 2018. Long-term borrowings were $10.3 million as of December 31, 2019, compared with $7.2 million as of December 31, 2018.

 

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Net cash provided by operating activities was $11.0 million for the year ended December 31, 2019, compared with $11.6 million for 2018. Net cash used in investing activities was $6.7 million for 2019, compared with $8.7 million for 2018. Net cash used in financing activities was $1.4 million for 2019, compared with $2.8 million for 2018.

 

About Fuling Global Inc.

 

Fuling Global manufactures and distributes environmentally-friendly disposable serviceware for the foodservice industry from six precision manufacturing facilities in the U.S., Mexico, Indonesia 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, including some of the world’s most notable quick-service restaurants and retailers, primarily in the U.S. China, Canada and European countries. 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.

 

For more information, contact:

 

Company Contact: Investor Relations Contact:
Fuling Global Inc. Judy Lin Sfetcu/Roger Pondel, PondelWilkinson Inc.
Gillian Hu, CFO Email: jsfetcu@pondel.com; rpondel@pondel.com
Email: gillian.hu@fulingplastics.com.cn Phone: +1-310-279-5980

 

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FULING GLOBAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

 

   For the Year Ended
December 31,
 
   2019   2018 
Revenues  $151,113,371   $138,664,272 
Cost of goods sold   113,503,127    108,914,256 
Gross profit   37,610,244    29,750,016 
           
Operating expenses          
Selling expenses   8,937,988    7,830,280 
General and administrative expenses   9,455,186    8,323,207 
Research and development expenses   3,860,929    3,430,529 
Total operating expenses   22,254,103    19,584,016 
           
Income from operations   15,356,141    10,166,000 
           
Other income (expense):          
Interest income   27,637    32,810 
Interest expense   (1,679,609)   (1,768,434)
Subsidy income   2,994,383    1,705,956 
Investment loss   (639)   (8,667)
Foreign currency transaction gain (loss)   300,097    780,406 
Other income (expense), net   (37,951)   65,926 
Total other income (expense), net   1,603,918    807,997 
           
Income before income taxes   16,960,059    10,973,997 
           
Provision for income taxes   2,554,432    1,126,736 
           
Net income from continuing operations  $14,405,627   $9,847,261 
           
Discontinued operations:          
Net income (loss) from discontinued operations, net of tax   516,999    (88,302)
Net income   14,922,626    9,758,959 
           
Less: net (loss) income attributable to non-controlling interest from continuing operations   (92,594)   (104,533)
           
Net income attributable to Fuling Global Inc.  $15,015,220   $9,863,492 
           
Other comprehensive income          
Foreign currency translation loss   (636,386)   (3,123,851)
Comprehensive income attributable to Fuling Global Inc.  $14,378,834   $6,739,641 
           
Earnings (loss) per share - Basic and diluted          
Continuing operations  $0.91   $0.62 
Discontinued operations  $0.03   $(0.01)
           
Weighted average number of shares - Basic and diluted          
Continuing operations and discontinued operations   15,796,857    15,782,055 

  

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FULING GLOBAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

   December 31,   December 31, 
   2019   2018 
ASSETS        
         
Current Assets:        
Cash and cash equivalents  $8,584,754   $4,400,402 
Restricted cash   1,102,591    2,396,993 
Accounts receivable, net   23,829,251    27,760,956 
Advances to supplier, net   2,299,873    1,255,420 
Inventories, net   23,779,671    22,274,613 
Security deposits   508,037    - 
Prepaid expenses and other current assets   1,194,215    1,394,234 
Current assets from discontinued operation   -    37,761 
Total Current Assets   61,298,392    59,520,379 
           
Property, plant and equipment, net   54,103,612    51,836,633 
Intangible assets, net   7,882,850    8,157,916 
Prepayments for construction and equipment purchases   1,617,584    1,222,888 
Security deposits - long term   1,492,537    1,590,671 
Other assets   424,648    297,906 
Right-of-use lease assets   7,507,445    - 
Non-current assets from discontinued operations   -    13,697 
Total Assets  $134,327,068   $122,640,090 
           
LIABILITIES AND SHAREHOLDERS' EQUITY          
           
Current Liabilities:          
Short term borrowings  $17,197,339   $19,890,641 
Bank notes payable   1,802,884    2,888,053 
Advances from customers   267,805    393,749 
Accounts payable   10,809,902    18,186,400 
Accounts payable - related party   303,083    82,014 
Accrued and other liabilities   1,936,320    2,121,304 
Other loans payable - current   2,985,476    2,847,859 
Taxes payable   182,058    247,635 
Deferred gains   154,750    291,170 
Due to related party   97,559    12,200 
Operating lease liabilities - current   910,897    - 
Current liabilities from discontinued operation   -    528,263 
Total Current Liabilities   36,648,073    47,489,288 
           
Deferred tax liability   887,098    577,826 
Long term borrowings   10,246,011    7,203,357 
Other loan payable – non-current   1,373,402    2,635,567 
Operating lease liabilities – non-current   6,103,899    - 
Total  Liabilities   55,258,483    57,906,038 
           
Shareholders' Equity          
Common stock: $0.001 par value, 70,000,000 shares authorized, 15,803,763 and 15,795,910 shares issued and outstanding as of December 31, 2019 and December 31, 2018, respectively   15,804    15,797 
Additional paid in capital   30,057,831    30,009,545 
Statutory reserve   6,962,390    5,532,945 
Retained earnings   45,188,209    31,602,434 
Accumulated other comprehensive loss   (3,108,640)   (2,472,254)
Total Fuling Global Inc.'s equity   79,115,594    64,688,467 
           
Non-controlling interest   (47,009)   45,585 
Total Shareholders' Equity   79,068,585    64,734,052 
           
Total Liabilities and Shareholders' Equity  $134,327,068   $122,640,090 

 

 

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