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Forward Reports Fiscal 2013 Third Quarter Results



Forward Reports Fiscal 2013 Third Quarter Results

WEST PALM BEACH, Fla., Aug. 12, 2013 (GLOBE NEWSWIRE) -- Forward Industries,
Inc. (Nasdaq:FORD), a designer and distributor of custom carry and protective
solutions, today announced financial results for its third fiscal quarter
ended June 30, 2013.

Forward generated operating income of $0.5 million in its fiscal 2013 third
quarter, marking it as the company's second successive quarter resulting in
positive operating income. Compared to an operating loss of $(0.6) million in
its fiscal 2012 third quarter, the improvement was primarily due to increased
gross profit combined with lower general and administrative expenses. Other
key financial results for Forward's fiscal 2013 third quarter, compared to its
fiscal 2012 third quarter, are as follows:

  * Net sales increased $0.9 million, or 12%, to $8.6 million in the 2013
    quarter due primarily to higher sales of diabetic products, which
    increased $0.7 million. Sales of Other Products increased $0.2 million in
    the 2013 Quarter.
  * Gross profit increased $1.0 million to $1.8 million, or 21.5% of net
    sales, in the 2013 quarter due primarily to the higher sales level
    achieved and cost savings realized from the restructure of our Asia-based
    sourcing and quality assurance operations.
  * Sales and marketing expenses increased $0.3 million, or 113%, to $0.6
    million in the 2013 quarter due primarily to higher personnel costs
    resulting from the restructure and expansion of our sales and sales
    support teams.
  * General and administrative expenses decreased $0.3 million, or 29%, to
    $0.8 million in the 2013 quarter due primarily to lower personnel costs
    and professional fees resulting from the restructure of our executive,
    finance, and IT teams.
  * Other expense, net increased to $0.7 million in the 2013 quarter from $18
    thousand in the 2012 quarter due primarily to net realized and unrealized
    losses on investments in marketable securities.
  * Net loss from continuing operations was $0.3 million, or $(0.03) per basic
    and diluted share, in the 2013 quarter compared to a net loss of $0.6
    million, or $(0.08) per basic and diluted share, in the 2012 quarter.
  * Net loss from discontinued operations was $19 thousand, or $(0.00) per
    basic and diluted share, in the 2013 quarter, compared to net loss of $2.7
    million, or $(0.33) per basic and diluted share, in the 2012 quarter.

Forward generated operating income of $0.6 million in its fiscal 2013
nine-month period compared to an operating loss of $(1.7) million in the
fiscal 2012 nine-month period due to increased gross profit and decreased
general and administrative expenses. Other key financial results for Forward's
fiscal 2013 nine-month period, compared to the fiscal 2012 nine-month results,
are as follows:

  * Net sales increased $3.4 million, or 16%, to $23.4 million in the 2013
    period due primarily to higher sales of diabetic products, which increased
    $3.5 million. Sales of Other Products decreased $0.1 million to $5.1
    million in the 2013 period.
  * Gross profit increased $1.8 million to $4.9 million, or 20.8% of net
    sales, in the 2013 period due primarily to the higher sales level achieved
    and cost savings realized from the restructure of our Asia-based sourcing
    and quality assurance operations.
  * Sales and marketing expenses increased $0.7 million, or 75%, to $1.6
    million in the 2013 period due primarily to higher personnel costs
    resulting from the restructure and expansion of our sales and sales
    support teams.
  * General and administrative expenses decreased $1.2 million, or 31%, to
    $2.7 million in the 2013 period due primarily to lower personnel costs and
    professional fees resulting from the restructure of our executive,
    finance, and IT teams.
  * Other income (expense), changed to $0.4 million of expense in the 2013
    period from $43 thousand of income in the 2012 period, due primarily to
    net realized and unrealized losses on investments in marketable
    securities.
  * Net income from continuing operations was $0.2 million, or $0.03 per basic
    and diluted share, in the 2013 period compared to a net loss of $1.6
    million, or $(0.20) per basic and diluted share, in the 2012 period.
  * Net loss from discontinued operations was $0.2 million, or $(0.02) per
    basic and diluted share, in the 2013 period, compared to $4.7 million, or
    $(0.58) per basic and diluted share, in the 2012 period.

Robert Garrett, Jr., Forward's Chief Executive Officer, commented: "With our
restructuring solidly behind us, we have taken important first steps towards
protecting our existing OEM business, improving our gross margins, and laying
the foundation to diversify and grow our customer base. The investments we
have made in expanding, re-incentivizing, and resourcing our sales, design and
sales support teams, combined with the growing capabilities of our Asia-based
sourcing agent, serve the dual purpose of improving the productivity of our
sales team, as well as expanding our ability to provide innovative solutions
to new and existing customers. We believe these factors to be a driving force
behind the recent growth in our existing accounts, as well as accelerated new
account development we are seeing.

"We continue to face challenges with respect to our customer and product
concentrations, which impose on us a heightened sensitivity to fluctuations in
sales demand and downward pricing pressure. While we recognize that we have a
lot of work ahead of us, we believe that the restructuring we completed and
the investments we are making are real steps towards overcoming these
challenges and returning our company to sustainable profitability."

The tables below are derived from the company's audited, consolidated
financial statements included in its Annual Report on Form 10-Q filed today
with the Securities and Exchange Commission. Please refer to the Form 10-K for
complete financial statements and further information regarding the company's
results of operations and financial condition relating to the fiscal years
ended September 30, 2012 and 2011. Please also refer to the Form 10-K for a
discussion of risk factors applicable to the company and its business.

Note Regarding Forward-Looking Statements

In addition to the historical information contained herein, this press release
contains certain "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, that reflect Forward's current
expectations and projections about its future results, performance, prospects
and opportunities. 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 in the 2013 quarter, 2013 period, and
beyond to differ materially from those expressed in, or implied by, these
forward-looking statements. 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, 2012 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

Incorporated in 1962, and headquartered West Palm Beach, Florida, Forward
Industries is a global designer and distributor of mobile device cases and
accessories. Forward's products can be viewed online at
www.forwardindustries.com.

 
FORWARD INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)
 
                              Three Months Ended      Nine Months Ended
                              June 30,                June 30,
                              2013       2012         2013        2012
Net sales                     $8,590,248 $7,664,252   $23,350,344 $20,049,363
Cost of goods sold            6,747,066  6,906,769    18,489,104  16,989,281
Gross profit                  1,843,182  757,483      4,861,240   3,060,082
                                                                   
Operating expenses:                                                
Sales and marketing           602,038    282,020      1,620,880   925,245
General and administrative    767,588    1,088,552    2,612,398   3,821,512
Total operating expenses      1,369,626  1,370,572    4,233,278   4,746,757
                                                                   
Income (loss) from operations 473,556    (613,089)    627,962     (1,686,675)
                                                                   
Other income (expense):                                            
Interest income (expense)     (120)      21,234       (376)       88,931
Loss on marketable            (702,377)  --           (374,160)   --
securities, net
Other income (expense), net   2,897      (38,998)     (11,285)    (46,023)
Total other income (expense), (699,600)  (17,764)     (385,821)   42,908
net
                                                                   
Income (loss) from continuing
operations before income tax  (226,044)  (630,853)    242,141     (1,643,767)
expense
Income tax expense            --         --           507         --
Income (loss) from continuing (226,044)  (630,853)    241,634     (1,643,767)
operations
Loss from discontinued
operations, net of tax
expense (benefit) of $(8,977) (18,659)   (2,678,075)  (199,498)   (4,722,216)
and $(130); and $(6,002) and
$4,850, respectively
Net income (loss)             (244,703)  (3,308,928)  42,136      (6,365,983)
Other comprehensive income                                         
(loss):
Change in unrealized gains on --         --           23,744      --
marketable securities
Translation adjustments       (152)      (7,446)      (9,353)     (11,558)
Comprehensive income (loss)   $(244,855) $(3,316,374) $56,527     $(6,377,541)
                                                                   
Net income (loss) per basic                                        
and diluted common share:
Income (loss) from continuing $(0.03)    $(0.08)      $0.03       $(0.20)
operations
Loss from discontinued        $(0.00)    $(0.33)      $(0.02)     $(0.58)
operations
Net income (loss) per share   $(0.03)    $(0.41)      $0.01       $(0.78)
                                                                   
Weighted average number of
common and common equivalent                                       
shares outstanding
Basic                         8,112,685  8,105,185    8,110,734   8,100,478
Diluted                       8,112,685  8,105,185    8,120,909   8,100,478

 
 
FORWARD INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
 
                                                     June 30,    September 30,
                                                     2013        2012
Assets:                                              (Unaudited) (Note 1)
Current assets:                                                   
Cash and cash equivalents                            $5,011,600  $4,608,246
Marketable securities                                405,721     420,605
Accounts receivable, net                             6,222,761   7,533,491
Inventories, net                                     2,363,833   3,380,813
Prepaid expenses and other current assets            755,826     367,552
Assets of discontinued operations                    312,319     621,879
Total current assets                                 15,072,060  16,932,586
                                                                  
Property and equipment, net                          123,533     138,774
Other assets                                         40,442      40,442
Total Assets                                         $15,236,035 $17,111,802
                                                                  
Liabilities and shareholders' equity                              
Current liabilities:                                              
Accounts payable                                     $4,223,383  $5,936,848
Accrued expenses and other current liabilities       868,741     1,725,185
Liabilities of discontinued operations               35,391      261,806
Total current liabilities                            5,127,515   7,923,839
                                                                  
Other liabilities                                    82,811      --
Total Liabilities                                    5,210,326   7,923,839
                                                                  
6% Senior Convertible Preferred Stock, par value
$0.01 per share; 1,500,000 shares authorized;        447,983     --
381,674 shares issued and outstanding (aggregate
liquidation value of $750,000)
                                                                  
Commitments and contingencies                                     
                                                                  
Shareholders' equity:                                             
Preferred stock, par value $0.01 per share;
4,000,000 shares authorized; no shares issued and    --          --
outstanding
Series A Participating Preferred stock, par value
$0.01; 100,000 authorized; no shares issued and      --          --
outstanding
Common stock, par value $0.01 per share; 40,000,000
shares authorized, 8,819,095 and 8,811,595 shares
issued; and                                          88,191      88,116
8,112,685 and 8,105,185 shares outstanding,
respectively
Capital in excess of par value                       17,353,932  17,020,771
Treasury stock, 706,410 shares at cost               (1,260,057) (1,260,057)
Accumulated deficit                                  (6,582,790) (6,624,926)
Accumulated other comprehensive loss                 (21,550)    (35,941)
Total shareholders' equity                           9,577,726   9,187,963
Total liabilities and shareholders' equity           $15,236,035 $17,111,802

CONTACT: Forward Industries, Inc.
         James McKenna, CFO
         (561) 465-0070

Forward Industries, Inc.
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