omniture

Fuling Global Inc. Reports Full Year 2018 Financial Results

2019-04-06 04:31 10372

ALLENTOWN, Pa., April 6, 2019 /PRNewswire/ -- Fuling Global Inc. (NASDAQ: FORK) ("Fuling Global" or the "Company"), a specialized producer and distributor of plastic and paper serviceware, with precision manufacturing facilities in both the U.S., Mexico and China, today announced its financial results for the twelve months ended December 31, 2018.




For the Twelve Months Ended December 31,

($ millions, except per share data)


2018


2017


% Change

Revenues


$138.66


$124.21


11.6%

Gross profit


$29.75


$26.13


13.8%

Gross margin


21.5%


21.0%


0.5 percentage points

Operating income


$10.17


$9.09


11.8%

Operating margin


7.3%


7.3%


0.0 percentage points

Net income from continuing operations


$9.85


$8.27


19.1%

Net loss from discontinued operations


($0.09)


($1.97)


-95.5%

Net income attributable to Fuling Global


$9.86


$6.28


57.1%

Earnings per share


$0.62


$0.40


56.9%

- from continuing operations


$0.62


$0.52


19.0%

- from discontinued operations


($0.01)


($0.13)


-95.5%


  • Total revenues increased by 11.6% to $138.66 million for the year of 2018 from $124.21 million for the prior year, driven by increased sales volume and blended average selling price ("ASP").
  • Total sales volume increased by 8.8% to 49.9 million kilograms for the year of 2018 from 45.9 million kilograms for the prior year. The increase in sales volume was across all product categories. Blended ASP also increased by 2.6% to $2.78 per kilogram for the year of 2018 from $2.71 per kilogram for the prior year.
  • Gross profit increased by 13.8% to $29.75 million for the year of 2018 from $26.13 million for the prior year. Gross margin increased by 0.5 percentage points to 21.5% for the year of 2018 from 21.0% for the prior year. The increase in gross margin was primarily due to lower unit cost of raw materials and higher ASP, partially offset by increased labor cost.
  • Net income attributable to Fuling Global was $9.86 million, or $0.62 per basic and diluted share, for the year of 2018, compared to $6.28 million, or $0.40 per basic and diluted share, for the prior year. Net income from continuing operations was $9.85 million, or $0.62 per share, for the year of 2018, compared to $8.27 million, or $0.52 per share, for the prior year.

Mr. Xinfu Hu, Chief Executive Officer of the Company, commented, "With sales volume and revenues growing by 8.8% and 11.6%, respectively, our 2018 results highlighted continued strength in our business. Profitability also improved significantly with net income from continuing operations increasing by 19.1%, thanks to favorable pricing environment (increase in blended ASP and decrease in unit cost of raw materials), stringent cost control that more than offset increase in labor cost and streamlined manufacturing process."

Ms. Guilan Jiang, Chairwoman of the Company, added, "As we are steadfast in executing our long-term strategic plan while pursuing lean manufacturing and stringent cost control, we have exited 2018 on a strong footing and with increasing optimism. We look forward to extending our streak of shipment and top line growths in 2019 and beyond."

Full Year 2018 Financial Results

Revenues

For the year of 2018, total revenues increased by $14.46 million, or 11.6%, to $138.66 million from $124.21 million for the prior year. The increase in total revenues was driven by an 8.8% increase of sales volume and a 2.6% increase in blended ASP. Revenues from Zhejiang Great Plastics Technology Co., Ltd., our discontinued business, was $5.6 million and $3.0 million for the year of 2018 and 2017, respectively, and were included in net loss from discontinued operation.

Overall sales volume increased by 4.0 million kilograms, or 8.8%, to 49.9 million kilograms for the year of 2018 from 45.9 million kilograms for the prior year. The increase in sales volume was across all product categories. Sales volume of cutlery increased by 0.9 million kilograms, or 3.0%, to 30.3 million kilograms for the year of 2018 from 29.4 million kilograms for the prior year. Sales volume of straws increased by 1.6 million kilograms, or 86.7%, to 3.5 million kilograms for the year of 2018 from 1.9 million kilograms for the prior year. Sales volume of cups and plates increased by 1.1 million kilograms, or 10.7%, to 11.7 million kilograms for the year of 2018 from 10.6 million kilograms for the prior year. Sales volume of other products increased by 0.4 million kilograms, or 9.7%, to 4.4 million kilograms for the year of 2018 from 4.0 million kilograms for the prior year.

Blended ASP increased by $0.07 per kilogram, or 2.6%, to $2.78 per kilogram for the year of 2018 from $2.71 per kilogram for the prior year. The increase in blended ASP was mainly related to cutlery, cups and plates and other products, and partially offset by decrease in ASP for straws. ASP of cutlery increased by $0.09 per kilogram, or 4.1%, to $2.20 per kilogram for the year of 2018 from $2.11 per kilogram for the prior year. ASP of straws decreased by $3.23 per kilogram, or 32.2%, to $6.80 per kilogram for the year of 2018 from $10.03 per kilogram for the prior year. ASP of cups and plates increased by $0.03 per kilogram, or 0.8%, to $3.19 per kilogram for the year of 2018 from $3.16 per kilogram for the prior year. ASP of other products increased by $0.04 per kilogram, or 1.7%, to $2.52 per kilogram for the year of 2018 from $2.47 per kilogram for the prior year.

The increase in revenues was across all product categories. Revenues from cutlery sales increased by $4.46 million, or 7.2%, to $66.56 million for the year of 2018 from $62.10 million for the prior year. Revenues from straws sales increased by $4.94 million, or 26.5%, to $23.57 million for the year of 2018 from $18.63 million for the prior year. Revenues from cups and plates sales increased by $3.90 million, or 11.6%, to $37.44 million for the year of 2018 from $33.54 million for the prior year. Revenues from other products sales increased by $1.16 million, or 11.6%, to $11.09 million for the year of 2018 from $9.94 million for the prior year. Cutlery, straws, cups and plates, and other products accounted for 48.0%, 17.0%, 27.0%, and 8.0% of total revenues for the year of 2018, compared to 50.0%, 15.0%, 27.0%, and 8.0% for the prior year, respectively.



For the Twelve Months Ended December 31,



2018



2017



Y/Y Change



Revenues ($'000)


% of Total



Revenues ($'000)


% of Total



Amount ($'000)


%

Cutlery

$

66,559


48.0%


$

62,104


50.0%


$

4,455


7.2%

Straws


23,573


17.0%



18,631


15.0%



4,942


26.5%

Cups and plates


37,439


27.0%



33,537


27.0%



3,902


11.6%

Others


11,093


8.0%



9,937


8.0%



1,156


11.6%

Total

$

138,664


100.0%


$

124,209


100.0%


$

14,455


11.6%


On a geographical basis, sales in the U.S., Fuling Global's largest market, increased by $11.74 million, or 11.0%, to $118.31 million for the year of 2018 from $106.56 million for the prior year. Sales in China increased by $0.55 million, or 7.0%, to $8.29 million for the year of 2018 from $7.74 million for the prior year. Sales in Europe increased by $0.52 million, or 8.5%, to $6.62 million for the year of 2018 from $6.10 million for the prior year. Sales in other countries increased by $1.65 million, or 43.3%, to $5.45 million for the year of 2018 from $3.80 million for the prior year.




For the Twelve Months Ended December 31,



2018



2017



Y/Y Change



Revenues ($'000)


% of Total



Revenues ($'000)


% of Total



Amount ($'000)


%

U.S.

$

118,308


85.3%


$

106,564


85.8%


$

11,744


11.0%

Europe


6,622


4.8%



6,101


4.9%



521


8.5%

China


8,286


6.0%



7,741


6.2%



545


7.0%

Others


5,448


3.9%



3,803


3.1%



1,645


43.3%

Total

$

138,664


100.0%


$

124,209


100.0%


$

14,455


11.6%


Gross profit

Total cost of goods sold increased by $10.83 million, or 11.0%, to $108.91 million for the year of 2018 from $98.08 million for the prior year. The increase was primarily due to increased sale volume as well as lower unit price of raw materials. Oil prices started to decrease from the middle of 2018 and decreased oil prices led to decreased unit price of raw materials in 2018.

Gross profit increased by $3.62 million, or 13.8%, to $29.75 million for the year of 2018 from $26.13 million for the prior year. Gross margin was 21.5% the year of 2018, compared to 21.0% for the prior year. The increase in gross margin was primarily attributable to decreased unit cost of raw materials and higher average selling price, partially offset by increased labor cost in 2018. Gross margin for cutlery, straws, cups and plates and other products were 16.5%, 16.8%, 33.1%, and 25.4%, respectively, in the year of 2018, compared to 15.8%, 15.9%, 33.3%, and 26.6%, respectively, in the prior year.

Operating income

Selling expenses increased by $1.00 million, or 14.6%, to $7.83 million for the year of 2018 from $6.83 million for the prior year. As a percentage of sales, selling expenses were 5.6% in the year of 2018, compared to 5.5% in the prior year. The increase in selling expenses was consistent with the increase in revenues. General and administrative expenses increased by $1.07 million, or 14.7%, to $8.32 million for the year of 2018 from $7.25 million for the prior year. As a percentage of sales, general and administrative expenses were 6.0% in the year of 2018, compared to 5.8% in the prior year. Research and development expenses increased by $0.48 million, or 16.2%, to $3.43 million for the year of 2018 from $2.95 million for the prior year. As a percentage of sales, research and development expenses were 2.5% in the year of 2018, compared to 2.4% in the prior year. We expect to increase our R&D expenditures proportionate to our revenue increase, as we continue to conduct research and development activities, especially seeking to increase the use of environmentally-friendly materials, develop biodegradable materials and reduce reliance on fossil-based raw materials.

As a result, total operating expenses increased by $2.54 million, or 14.9%, to $19.58 million for the year of 2018 from $17.04 million for the prior year.

Operating income increased by $1.08 million, or 11.8%, to $10.17 million for the year of 2018 from $9.09 million for the prior year. Operating margin was 7.3% for the year of 2018, compared to 7.3% for the prior year. The operating margin was unchanged mainly because the increase in gross margin was partially offset by increase in operating expenses as a percentage of sales.

Income before income taxes

Total net other income, which includes interest income and expenses, subsidy income and other non-operating income and expenses, was $0.81 million for the year of 2018, compared to total net other expense of $0.04 million for the prior year. The difference was mainly due to increased subsidy income and other income and partially offset by increased interest expense in the year of 2018.

Income before income taxes increased by $1.92 million, or 21.2%, to $10.97 million for the year of 2018 from $9.05 million for the prior year.

Provision for income taxes was $1.13 million for the year of 2018, compared to $0.79 million for the prior year.

Net income

Net income from continuing operations increased by $1.58 million, or 19.1%, to $9.85 million for the year of 2018 from $8.27 million for the prior year. Net loss from discontinued operations was $0.09 million for the year of 2018, compared to $1.97 million for the prior year. As a result, net income increased by $3.47 million, or 55.1%, to $9.76 million for the year of 2018 from $6.29 million for the prior year. After deduction of non-controlling interest, net income attributable to Fuling Global increased by $3.59 million, or 57.1%, to $9.86 million for the year of 2018 from $6.28 million for the prior year.

Basic and diluted earnings per share were $0.62 for the year of 2018, compared to $0.40 for the same period of last year. Basic and diluted earnings per share from continuing operations were $0.62 for the year of 2018, compared to $0.52 for the prior year.

Financial Condition

As of December 31, 2018, the Company had cash and cash equivalents and restricted cash of $4.40 million and $2.40 million, respectively, compared to $4.10 million and $3.77 million, respectively, at the end of 2017. Short-term borrowing and bank notes payable were $19.89 million and $2.89 million, respectively, as of December 31, 2018, compared to $27.42 million and $4.44 million, respectively, at the end of 2017. Long-term borrowing was $7.20 million as of December 31, 2018, compared to $1.80 million at the end of 2017.

Net cash provided by operating activities was $11.58 million for the year of 2018, compared to $2.47 million for the prior year. Net cash used in investing activities was $8.73 million for the year of 2018, compared to $14.35 million for the prior year. Net cash used in financing activities was $2.77 million for the year of 2018, compared to net cash provided by financing activities of $13.84 million for the prior year.

About Fuling Global Inc.

Fuling Global Inc. ("Fuling Global") is a specialized producer and distributor of plastic and paper serviceware, with precision manufacturing facilities in both the U.S., Mexico and China. The Company's plastic and paper serviceware products include disposable cutlery, drinking straws, cups, plates and other plastic products and are used by more than one hundred customers primarily from the U.S. 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. 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.

For more information, please contact:

At the Company:
Gilbert Lee, CFO
Email: glee@fulingusa.com
Phone: +1-610-366-8070 x1835
Web: http://ir.fulingglobal.com/

Investor Relations:
Tony Tian, CFA
Weitian Group LLC
Email: ttian@weitianco.com
Phone: +1-732-910-9692

 

 

FULING GLOBAL INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



December 31,


December 31,


2018


2017





ASSETS




Current Assets:




Cash and cash equivalents

$

4,400,402


$

4,103,797

Restricted cash


2,396,993



3,767,081

Certificates of deposit


-



105,707

Accounts receivable, net


27,760,956



22,935,245

Advances to supplier, net


1,255,420



509,770

Inventories, net


22,274,613



19,320,066

Security deposits for sale leaseback


-



771,814

Prepaid expenses and other current assets


1,394,234



2,185,961

Current assets from discontinued operation


37,761



3,313,681

Total Current Assets


59,520,379



57,013,122







Property, plant and equipment, net


51,836,633



43,680,372

Intangible assets, net


8,157,916



8,797,581

Prepayments for construction and equipment purchases


1,222,888



527,568

Security deposits for sale leaseback - long term


1,590,671



543,996

Other assets


297,906



282,195

Non-current assets from discontinued operations


13,697



5,884,799

Total Assets

$

122,640,090


$

116,729,633







LIABILITIES AND SHAREHOLDERS' EQUITY












Current Liabilities:






Short term borrowings

$

19,890,641


$

27,417,082

Bank notes payable


2,888,053



4,436,680

Advances from customers


393,749



543,675

Accounts payable


18,186,400



12,797,853

Accounts Payable-related party


82,014



-

Accrued and other liabilities


2,121,304



2,794,584

Other payable - sale leaseback


2,847,859



2,755,931

Taxes payable


247,635



262,828

Deferred gains


291,170



87,605

Due to Related party


12,200



-

Current liabilities from discontinued operation


528,263



4,466,481

Total Current Liabilities


47,489,288



55,562,719













Deferred tax liability


577,826



-

Long term payable - sale leaseback


2,635,567



1,371,359

Long term borrowings


7,203,357



1,801,887

Total Liabilities


57,906,038



58,735,965







Commitments and contingencies












Shareholders' Equity






Common stock: $0.001 par value, 70,000,000 shares authorized, 15,795,910 and 15,780,205 shares issued and outstanding as of December 31, 2018 and December 31, 2017, respectively


15,797



15,781

Additional paid in capital


30,009,545



29,904,285

Statutory reserve


5,532,945



4,617,039

Retained earnings


31,602,434



22,654,848

Accumulated other comprehensive income


(2,472,254)



651,597

Total Fuling Global Inc.'s equity


64,688,467



57,843,550







Non-controlling interest


45,585



150,118

Total Shareholders' Equity


64,734,052



57,993,668







Total Liabilities and Shareholders' Equity

$

122,640,090


$

116,729,633

 

 

FULING GLOBAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME



For the Years Ended December 31,


2018


2017


2016







Revenues

$

138,664,272


$

124,208,506


$

102,320,689

Cost of goods sold


108,914,256



98,077,100



77,129,454

Gross Profit


29,750,016



26,131,406



25,191,235










Operating Expenses









Selling expenses


7,830,280



6,834,645



5,955,391

General and administrative expenses


8,323,207



7,254,270



6,277,018

Research and development expenses


3,430,529



2,953,477



2,355,449

Total operating expenses


19,584,016



17,042,392



14,587,858










Income from Operations


10,166,000



9,089,014



10,603,377










Other Income (Expense):









Interest income


32,810



57,477



27,870

Interest expense


(1,768,434)



(981,061)



(589,758)

Subsidy income


1,705,956



1,012,128



1,646,774

Investment loss


(8,667)



-



-

Foreign currency transaction gain (loss)


780,406



(175,271)



56,970

Other income, net


65,926



51,607



65,260

Total other income (expense), net


807,997



(35,120)



1,207,116










Income Before Income Taxes


10,973,997



9,053,894



11,810,493










Provision for Income Taxes


1,126,736



788,370



1,561,404










Net income from continuing operations

$

9,847,261


$

8,265,524


$

10,249,089










Discontinued operation:









Net loss from discontinued operations, net of tax


(88,302)



(1,974,852)



(2,306,036)

Net income


9,758,959



6,290,672



7,943,053










Less: net income (loss) attributable to non-controlling interest from continuing operations


(104,533)



12,875



20










Net income attributable to Fuling Global Inc.

$

9,863,492


$

6,277,797


$

7,943,033










Other Comprehensive Income









Foreign currency translation income (loss)


(3,123,851)



2,172,347



(1,913,200)

Comprehensive income attributable to Fuling Global Inc.

$

6,739,641


$

8,450,144


$

6,029,833










Earnings per share - Basic and diluted









Continuing operations

$

0.62


$

0.52


$

0.65

Discontinued operations

$

(0.01)


$

(0.13)


$

(0.15)










Weighted average number of shares - Basic and diluted









Continuing operations and discontinued operations


15,782,055



15,759,293



15,735,588

 

 

FULING GLOBAL INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS



For the Years Ended December 31,


2018


2017


2016










CASH FLOWS FROM OPERATING ACTIVITIES










Net income

$

9,758,959


$

6,290,672


$

7,943,053


Net (loss) from discontinued operations


(88,302)



(1,974,852)



(2,306,036)


Net income from continuing operations


9,847,261



8,265,524



10,249,089


Adjustments to reconcile net income to net cash provided by operating activities:











Stock based compensation


105,276



58,867



123,339



Deferred tax expense


-



-



319,252



Depreciation and amortization


4,406,888



3,611,510



2,354,193



Bad debt provisions (recovery)


(3,372)



154,051



(1,645)



Unrealized (gains) losses


(4,849)



34,417



(60,225)



Inventory reserve


38,716



22,818



23,932



(Gain) loss on disposal of fixed assets


(30,981)



43,172



(12,687)


Changes in operating assets:


-



-



-



Accounts receivable


(5,547,070)



(2,414,707)



(6,742,328)



Advances to suppliers


(733,643)



(40,504)



(251,704)



Inventories


(3,805,026)



(3,408,394)



(3,262,302)



Other assets


704,459



(1,969,564)



(5,159,033)



Security deposit for sale leaseback


(359,340)



(523,839)



(755,934)


Changes in operating liabilities:


-



-



-



Accounts payable


5,195,799



(2,285,276)



5,525,688



Accounts Payable-related party


85,253



-



-



Advance from customers


(301,971)



(43,339)



34,729



Deferred gains


216,506



(583,978)



679,774



Deferred tax liability


600,646



-



-















Taxes payable


(40,248)



(258,589)



(558,864)



Accrued and other liabilities


(566,821)



1,270,299



1,446,220




Net cash provided by operating activities from continuing operations


9,807,483



1,932,468



3,951,494




Net cash provided by (used in) operating activities from discontinuing operations


1,770,101



542,170



1,193,663




Net cash provided by operating activities


11,577,584



2,474,638



5,145,157













CASH FLOWS FROM INVESTING ACTIVITIES










Purchase of property and equipment


(4,171,367)



(6,388,069)



(3,838,709)


Additions to construction in progress


(9,878,241)



(10,231,413)



(12,679,337)


Cash receipts from disposal property and equipment


272,055



13,352



19,296


Cash increase in certificates of deposit


103,967



1,479,874



1,505,061


Payments of construction and equipment purchase


(752,299)



(480,689)



(1,996,510)


Repayments of deposit and prepayments for construction and equipment purchase


-



1,358,566



1,354,585


Purchase of intangible assets


(6,589)



(2,602)



(8,298,564)


Cash from discontinued business


(18,684)



64,208



435,085




Net cash (used in) investing activities from continuing operations


(14,451,158)



(14,186,773)



(23,499,093)




Net cash provided by (used in) investing activities from discontinuing operations


5,719,074



(159,086)



(149,403)




Net cash (used in) investing activities


(8,732,084)



(14,345,859)



(23,648,496)













CASH FLOWS FROM FINANCING ACTIVITIES










Proceeds from short-term borrowings


33,213,599



31,239,350



23,677,701


Repayments of short-term borrowings


(39,629,404)



(20,342,692)



(18,538,408)


Proceeds from long-term borrowings


5,631,163



1,048,749



836,471


Proceeds from bank notes payable


5,947,885



7,002,823



5,255,076


Repayments of bank notes payable


(7,309,428)



(4,871,021)



(5,431,761)


Repayment of third party borrowing


-



-



(180,611)


Proceeds from loans from related parties


-



-



55,484


Repayments of loans from related parties


(24,930)



(57,148)



-


Proceeds from other payable - sales lease back


5,784,874



2,906,977



3,941,746


Repayments of other payable - sales lease back


(4,144,246)



(2,638,787)



(172,154)




Net cash provided by (used in) financing activities from continuing operations


(530,487)



14,288,251



9,443,544




Net cash (used in) financing activities from discontinuing operations


(2,241,606)



(450,272)



(1,463,718)




Net cash provided by (used in) financing activities


(2,772,093)



13,837,979



7,979,826













EFFECT OF EXCHANGE RATES CHANGES ON CASH AND CASH EQUIVALENTS


(1,146,890)



(356,466)



(400,727)










NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH


(1,073,483)



1,610,292



(10,924,240)










CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, BEGINNING OF YEAR


7,870,878



6,260,586



17,184,826










CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR

$

6,797,395


$

7,870,878


$

6,260,586










CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, END OF YEAR

$

6,797,395


$

7,870,878


$

6,260,586

LESS: RESTRICTED CASH


2,396,993



3,767,081



2,333,608

CASH AND CASH EQUIVALENTS, END OF YEAR

$

4,400,402


$

4,103,797


$

3,926,978










SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:










Cash paid during the year for:











Interest paid

$

1,329,377


$

836,401


$

762,868



Income tax paid

$

331,997


$

1,433,998


$

2,331,173


Non-cash investing activities:











Transfer from construction in progress to fixed assets

$

9,918,862


$

15,545,784


$

1,209,221



Transfer from accounts payable to fixed assets

$

851,966


$

1,162,202


$

-



Transfer from advance payments to fixed assets

$

170,281


$

191,868


$

296,853

 

 

Cision View original content:http://www.prnewswire.com/news-releases/fuling-global-inc-reports-full-year-2018-financial-results-300825610.html

Source: Fuling Global Inc.
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