Forward Reports Fiscal 2020 Second Quarter Results

Revenues of $7.9 million and Net loss of $1.4 million for the quarter

WEST PALM BEACH, Fla., June 25, 2020 (GLOBE NEWSWIRE) -- Forward Industries, Inc. (NASDAQ:FORD), a single source solution provider for the full spectrum of hardware and software product design and engineering services as well as a designer and distributer of carry and protective solutions, today announced financial results for its second fiscal quarter ended March 31, 2020. 

Second Quarter 2020 Financial Highlights 

• Revenues were $7.9 million compared to $8.2 million from the second quarter of 2019. A decrease of 3.7%.
   
• Gross profit percentage increased to 18.3% compared to 16% in the second quarter of 2019.
   
• Net Loss was $1.4 million compared to a loss of $1.1 million in the second quarter of 2019.  Included in the loss was an impairment charge for Goodwill of $1 million.
   
• Net loss per share was $0.14 compared to Net loss per share of $0.12 for the second quarter of 2019.
   
• Cash and cash equivalents totaled $1.3 million at March 31, 2020.

Terry Wise, Chief Executive Officer of Forward Industries, stated, “Unsurprisingly, in these challenging times, the quarter has been impacted by delays within the retail sector which have affected timing on the roll out of our smart line of products. Forward’s financial performance was further impacted by the expected continued decline of our diabetes distribution business. However, as we adapt and emerge out of these difficult trading conditions, I am confident that Forward is well placed to succeed in the future.”

The tables below are derived from the Company’s condensed consolidated financial statements included in its Form 10-Q filed on June 25, 2020 with the Securities and Exchange Commission. Please refer to the Form 10-Q for complete financial statements and further information regarding the Company’s results of operations and financial condition relating to the fiscal quarter ended March 31, 2020 and 2019. Please also refer to the Company’s Form 10-K for a discussion of risk factors applicable to the Company and its business. 

Note Regarding Forward-Looking Statements

This press release contains certain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 including statements regarding our belief regarding our progress from retail and opportunities from new business lines.  Forward has tried to identify these forward-looking statements by using words such as “may”, “should,” “expect,” “hope,” “anticipate,” “believe,” “intend,” “plan,” “estimate” and similar expressions. These forward-looking statements are based on information currently available to the Company and are subject to a number of risks, uncertainties and other factors that could cause its actual results, performance, prospects or opportunities to differ materially from those expressed in, or implied by, these forward-looking statements. These risks include the inability to expand our customer base, pricing pressures, lack of success of our sales people, failure to develop products at a profit, failure to commercialize products that we develop, a long delay in the re-opening of retail stores in the U.S., as a result of the pandemic, changes in consumer purchasing as a result of unemployment,  unanticipated issues with our affiliated sourcing agent, issues at Chinese factories that we source our products as a result of the pandemic,  and failure to obtain acceptance of our products by big box retail stores. No assurance can be given that the actual results will be consistent with the forward-looking statements. Investors should read carefully the factors described in the “Risk Factors” section of the Company’s filings with the SEC, including the Company’s Form 10-K for the year ended September 30, 2019 for information regarding risk factors that could affect the Company’s results. Except as otherwise required by Federal securities laws, Forward undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, changed circumstances or any other reason.

About Forward Industries

Forward is a fully integrated design, development and manufacturing solution to top tier medical and technology customers worldwide. Through its acquisition of Intelligent Product Solutions (“IPS”), the Company has expanded its ability to design and develop solutions for our existing multinational client base and expand beyond the diabetic product line in to a variety of industries with a full spectrum of hardware and software product design and engineering services. In addition to our existing designs and distribution of carry and protective solutions, primarily for handheld electronic devices.  The company now provides one stop shopping for the design development and manufacturing opportunities from a variety of sources.

Contact:                                               
Forward Industries, Inc.                                        
Anthony Camarda                                                 
[phone]

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
	March 31,				September 30,
		2020				2019
	(Unaudited)
Assets
Current assets:
Cash	$	1,348,099			$	3,092,813
Accounts receivable, net		7,368,884				6,695,120
Inventories		636,052				1,608,827
Prepaid expenses and other current assets		609,903				441,502
Total current assets		9,962,938				11,838,262
Property and equipment, net		213,181				243,002
Intangible assets, net		1,167,030				1,248,712
Goodwill		1,167,427				2,182,427
Investment		-				326,941
Operating lease right of use assets, net		3,490,049				-
Other assets		184,201				255,008
Total assets	$	16,184,826			$	16,094,352
Liabilities and shareholders' equity
Current liabilities:
Line of credit	$	400,000			$	1,300,000
Accounts payable		258,442				315,444
Due to Forward China		2,307,759				3,236,693
Deferred income		707,987				219,831
Notes payable		1,608,125				1,654,799
Capital leases payable - short-term portion		39,306				39,941
Deferred consideration		293,000				834,000
Operating lease liability - short-term portion		255,505				-
Accrued expenses and other current liabilities		642,516				694,972
Total current liabilities		6,512,640				8,295,680
Other liabilities:
Capital leases payable - long-term portion		10,585				26,438
Deferred rent		-				60,935
Operating lease liability - long-term portion		3,334,134				-
Total other liabilities		3,344,719				87,373
Total liabilities		9,857,359				8,383,053
Commitments and contingencies
Shareholders' equity:
Common stock, par value $0.01 per share; 40,000,000 shares authorized;
9,533,851 shares issued and outstanding		95,338				95,338
Additional paid-in capital		19,005,569				18,936,130
Accumulated deficit		(12,773,440	)			(11,320,169	)
Total shareholders' equity		6,327,467				7,711,299
Total liabilities and shareholders' equity	$	16,184,826			$	16,094,352

FORWARD INDUSTRIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
	For the Three Months Ended March 31,								For the Six Months Ended March 31,
		2020				2019				2020				2019
Net Revenues	$	7,931,377			$	8,172,467			$	16,324,231			$	18,355,750
Cost of Sales		6,478,228				6,861,622				13,151,073				15,741,864
Gross Profit		1,453,149				1,310,845				3,173,158				2,613,886
		18.32	%			16.04	%
Operating expenses:
Sales and marketing		479,461				428,376				1,014,633				897,975
General and administrative		1,625,385				1,957,530				2,839,351				3,271,499
Goodwill impairment		1,015,000				-				1,015,000				-
Total operating expenses		3,119,846				2,385,906				4,868,984				4,169,474
Loss from operations		(1,666,697	)			(1,075,061	)			(1,695,826	)			(1,555,588	)
Other income (expenses):
Fair value adjustment of earn-out consideration		350,000				-				350,000				-
Fair value adjustment of deferred cash consideration		(9,000	)			-				(9,000	)			-
Interest expense		(44,178	)			(53,051	)			(95,127	)			(98,088	)
Other expense		(1,739	)			(2,793	)			(3,318	)			(7,756	)
Total Other income (expense)		295,083				(55,844	)			242,555				(105,844	)
Net Loss	$	(1,371,614	)		$	(1,130,905	)		$	(1,453,271	)		$	(1,661,432	)
Net loss per basic common share	$	(0.14	)		$	(0.12	)		$	(0.15	)		$	(0.17	)
Net loss per diluted common share	$	(0.14	)		$	(0.12	)		$	(0.15	)		$	(0.17	)
Weighted average number of common and
common equivalent shares outstanding:
Basic		9,533,851				9,532,645				9,533,851				9,530,207
Diluted		9,533,851				9,532,645				9,533,851				9,530,207