Press Releases

Fuling Global Inc. Reports 2019 First Half Financial Results

ALLENTOWN, Pa., Oct. 22, 2019 /PRNewswire/ -- 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
Change


($'000)


($'000)


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

Change


($'000)


 ($'000)


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


 


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,

2018




(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

 

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SOURCE Fuling Global Inc.