BEIJING, Sept. 6,
2023 /PRNewswire/ -- Huadi International Group Co.,
Ltd. ("HUDI" or the "Company") (NASDAQ: HUDI), a leading developer
and manufacturer of industrial stainless steel seamless pipes and
tubes products in China, today
announced its financial results for the first six months of fiscal
year 2023.
Financial Highlights for the First Six Months of Fiscal Year
2023
|
|
For the Six Months
Ended March 31
|
|
(in $
millions, except earnings per share;
differences due to rounding)
|
|
2023
|
|
|
2022
|
|
|
%
Change
|
|
Sales
|
|
$
|
38.0
|
|
|
$
|
36.8
|
|
|
3.2 %
|
|
Gross profit
|
|
|
5.7
|
|
|
|
5.9
|
|
|
(3.6 %)
|
|
Gross margin
|
|
|
15.1 %
|
|
|
|
16.2 %
|
|
|
(1.1 percentage
points)
|
|
Operating
Income
|
|
|
1.5
|
|
|
|
0.7
|
|
|
122.0 %
|
|
Net income
|
|
|
1.5
|
|
|
|
(0.0)
|
|
|
(15,991.7 %)
|
|
Net earnings per share
– Basic and Diluted
|
|
|
0.10
|
|
|
|
(0.00)
|
|
|
(15,044.8 %)
|
- Revenue increased by 3.2% to $38.0
million for the six months ended March 31, 2023, from $36.8
million for the six months ended March 31, 2022.
- Gross profit decreased by 3.6% to $5.7
million for the six months ended March 31, 2023, from $5.9
million for the six months ended March 31, 2022.
- Operating income increased by 122% to $1.5 million for the six months ended
March 31, 2023, from $0.7 million for the six months ended
March 31, 2022
- Net income for the six months ended March 31, 2023, was $1.5
million compared to net loss of $9,000 for the six months ended March 31, 2022.
Mr. Di Wang, Chairman of the
Company, commented: "During the first half of year 2023, we
continue to enhance our cost structure, deliver high-quality
services and products to maintain and expand our existing client
base, resulting in the Company's sales growth of over 3% and
turnaround for net income of $1.5
million in the first half of fiscal year 2023. Despite a
challenging economic situation resulted by Covid-19 pandemic during
the last quarter of 2022, we closed $25
million registered direct offering. Though slow recovery
from the impact of Covid-19 pandemic during the first quarter of
2023, we continued to record progresses on our operations and
entered into strategic partnership with China Huanqiu Contracting
& Engineering Co., Ltd., leading to our recognition as a
significant supplier for large-scale stainless steel seamless pipes
and tubes projects. Also, we are chosen to serve as the chief
executive entity of the Belt and Road Enterprise Development
Association, which will aid us in exploring and cultivating new
business prospects for sustainable growth in the future. All these
developments during the six months ended March 31, 2023 bolster our confidence in
implementing our strategic plan to seek sustainable growth for the
full year 2023."
Financial Results for the First Six Months of Fiscal year
2023
Revenue
For the six months ended March 31,
2023, revenue increased slightly by approximately
$1.2 million or 3.2%, to
approximately $38.0 million from
approximately $36.8 million for the
six months ended March 31, 2022. The
revenue denominated in RMB increased by approximately 30.4 million
(equivalent to $4.4 million, using
the average conversion rate for current period) or 13.0%. The
increase in revenues was primarily driven by our sales growth in
domestic market as a result of the end of control measures on
COVID-19 since the end of 2022.
Gross profit
Gross profit decreased slightly by approximately $0.2 million, or 3.58%, to approximately
$5.7 million for the six months ended
March 31, 2023, from approximately
$5.9 million for the six months ended
March 31, 2022. Gross profit
denominated in RMB increased by approximately 2.1 million
(equivalent to approximately $0.3
million, using the average conversion rate for current
period) or 5.61%, the increase of gross profit was in line with the
Company's growth of revenue. Gross profit margin was 15.1% for the
six months ended March 31, 2023, as
compared to 16.2% for the six months ended March 31, 2022.
Selling, general and administrative ("SGA")
expenses
Selling, general and administrative expenses decreased by
approximately $0.3 million, or 7.5%
to approximately $3.7 million for the
six months ended March 31, 2023 as
compared to approximately $4.0
million for the six months ended March 31, 2022. The decrease of SGA expenses was
primarily attributable to the depreciation RMB against USD,
compared to an average exchange rate of 1
USD = 6.3712 RMB for the six
months ended March 31, 2022 to an
average exchange rate of 1 USD =
6.9761 for the six months ended March 31,
2023. The decrease in SGA expenses denominated in RMB was
only 0.3 million (equivalent to approximately $47,000, using the average conversion rate for
current period) or 1.28%.
Research and development ("R&D") expenses
Research and development expenses decreased slightly by
approximately $0.1 million, or 6.7%
to approximately $1.1 million for the
six months ended March 31, 2023 as
compared to approximately $1.2
million for the six months ended March 31, 2022.
Foreign currency transaction gains
The Company incurred foreign currency transaction gains of
approximately $0.6 million for the
six months ended March 31, 2023,
compared to foreign currency transaction loss approximately
$36,000 for the six months ended
March 31, 2022. The increase was
mainly due to the depreciation RMB against USD, compared to an
average exchange rate of 1 USD =
6.3712 RMB for the six months ended
March 31, 2022 to an average exchange
rate of 1 USD = 6.9761 for the six
months ended March 31,
2023.
Income from operations
As a result of the factors described above, the Company incurred
operating income approximately $1.5
million for the six months ended March 31, 2023, compared to operating income
approximately $0.7 million for the
six months ended March 31, 2022,
representing an increase of operating income of approximately
$0.8 million.
Other income and expense
Total other income (expense), net increased by approximately
$0.8 million, or 121.64% to other
income approximately $0.1 million for
the six months ended March 31, 2023,
compared to other expense approximately $0.7
million for the six months ended March 31, 2022. The increase was mainly
attributable to $0.7 million decrease
of interest expense as a result of the decrease of short-term
borrowings and long-term borrowings and an increase of other income
of $0.1 million.
Income tax provision
Income tax expense for the six months ended March 31, 2023 increased by approximately
$0.1 million, compared to the
corresponding period in 2022 due to the increase in taxable
income.
Net income (loss)
As a result of the combination of factors described above, the
Company's net income increased by approximately $1.5 million to net income of $1.5 million for the six months ended
March 31, 2023, compared to net loss
of approximately $9,000 for the six
months ended March 31, 2022.
Cash and Cash Equivalents
As of March 31, 2023 and
September 30, 2022, we had cash and
cash equivalents of $19.8 million and
$13.2 million respectively.
Recent development
On June 15, 2023, Hong Kong Branch, a wholly-owned subsidiary of
the Company, established Huadi Holdings (Songyang) Co., Ltd. under
the laws of the PRC, the registered capital is $15 million.
On July 5, 2023, Huadi (Songyang)
Co., Ltd. a wholly-owned subsidiary of the Company, has entered
into an investment agreement with Songyang County local government
owned enterprise in Zhejiang
Province. The Agreement aims to start an advanced "Future
Factory" construction project in the Chishou Industrial Zone of
southwestern Zhejiang Province in
China. The factory will occupy
approximately 50 acres with a total investment of approximately
RMB 1 billion, including fixed asset
investments of over RMB 620 million.
Huadi Songyang has officially obtained the rights to use the first
portion of 26 acres of land from Songyang Economic Development Zone
on June 30, 2023, for the
construction of the Future Factory project.
About Huadi International Group Co., Ltd.
Huadi International Group Co., Ltd. is a leading manufacturer of
industrial stainless steel seamless pipes and tubes products with
extensive distribution facilities and network for over twenty
provinces in China and across
international steel pipes industry. It offers a broad range of
products exported to twenty countries and regions such as
United States, Mexico, Thailand, Australia, Argentina, Taiwan, India, the
Philippines, UAE and Canada. Its products are widely used in the
oil & gas transmission, chemistry engineering, food processing,
medical devices, aeronautics and astronautics, boiler, irrigation
works construction, electricity, automobile, naval architecture,
paper mill and mechanical industries. For more information about
the Company, please visit: http://www.huadi.cc.
Forward-Looking Statement
This press release contains forward-looking statements as
defined by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance, and
underlying assumptions and other statements that are other than
statements of historical facts. When the Company uses words such as
"may, "will, "intend," "should," "believe," "expect," "anticipate,"
"project," "estimate" or similar expressions that do not relate
solely to historical matters, it is making forward-looking
statements. Forward-looking statements are not guarantees of future
performance and involve risks and uncertainties that may cause the
actual results to differ materially from the Company's expectations
discussed in the forward-looking statements. These statements are
subject to uncertainties and risks including, but not limited to,
the following: the Company's goals and strategies; the Company's
future business development; financial condition and results of
operations; product and service demand and acceptance; reputation
and brand; the impact of competition and pricing; changes in
technology; government regulations; fluctuations in general
economic and business conditions in China and assumptions underlying or related to
any of the foregoing and other risks contained in reports filed by
the Company with the SEC. For these reasons, among others,
investors are cautioned not to place undue reliance upon any
forward-looking statements in this press release. Additional
factors are discussed in the Company's filings with the SEC, which
are available for review at www.sec.gov. The Company undertakes no
obligation to publicly revise these forward–looking statements to
reflect events or circumstances that arise after the date
hereof.
For more information, please contact:
The Company:
IR Department
Email: IR@huadigroup.com
Investor Relations:
Janice Wang
Wealth Financial Services LLC
Phone: +86 13811768559
+1 628 283 9214
Email: services@wealthfsllc.com
|
HUADI INTERNATIONAL
GROUP CO., LTD.
|
|
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
AS OF MARCH 31, 2023
AND SEPTEMBER 30, 2022
|
|
|
(UNAUDITED, IN U.S.
DOLLARS, EXCEPT SHARE DATA)
|
|
|
|
|
|
2023
|
|
|
2022
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
19,754,552
|
|
|
$
|
13,195,999
|
|
|
Restricted
cash
|
|
|
915,242
|
|
|
|
1,347,246
|
|
|
Accounts
receivable, net of allowance for doubtful accounts of
$2,342,732
and $2,197,396, respectively
|
|
|
19,390,619
|
|
|
|
19,658,188
|
|
|
Notes
receivable
|
|
|
4,810,805
|
|
|
|
1,410,613
|
|
|
Inventories
|
|
|
29,840,861
|
|
|
|
24,867,708
|
|
|
Advances
to suppliers, net
|
|
|
2,185,565
|
|
|
|
3,369,468
|
|
|
Other
receivables
|
|
|
474,332
|
|
|
|
552,633
|
|
|
Total current
assets
|
|
|
77,371,976
|
|
|
|
64,401,855
|
|
|
Property,
plant and equipment, net
|
|
|
5,878,107
|
|
|
|
5,989,136
|
|
|
Land use
rights, net
|
|
|
1,093,078
|
|
|
|
1,069,891
|
|
|
Long-term
investments
|
|
|
13,296,552
|
|
|
|
12,836,916
|
|
|
Deferred
tax assets
|
|
|
360,495
|
|
|
|
338,729
|
|
|
TOTAL
ASSETS
|
|
$
|
98,000,208
|
|
|
$
|
84,636,527
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts
payable
|
|
$
|
2,563,412
|
|
|
$
|
919,492
|
|
|
Accounts
payable - related parties
|
|
|
3,922,725
|
|
|
|
2,439,105
|
|
|
Accrued
expenses and other current liabilities
|
|
|
1,799,794
|
|
|
|
1,771,245
|
|
|
Notes
payable
|
|
|
82,998
|
|
|
|
548,253
|
|
|
Advances
from customers
|
|
|
4,230,712
|
|
|
|
4,005,942
|
|
|
Advance
from customers - related parties
|
|
|
409,659
|
|
|
|
395,498
|
|
|
Due to
related parties
|
|
|
337,497
|
|
|
|
606,986
|
|
|
Short-term borrowings
|
|
|
72,806
|
|
|
|
11,888,662
|
|
|
Long-term
borrowings - current portion
|
|
|
43,683
|
|
|
|
-
|
|
|
Taxes
payable
|
|
|
3,890,310
|
|
|
|
3,126,778
|
|
|
Total
current liabilities
|
|
|
17,353,596
|
|
|
|
25,701,961
|
|
|
Long-term
borrowings
|
|
|
4,318,830
|
|
|
|
9,300,625
|
|
|
TOTAL
LIABILITIES
|
|
|
21,672,426
|
|
|
|
35,002,586
|
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTIGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders'
equity:
|
|
|
|
|
|
|
|
|
|
Common
stock, $0.0002 par value, 250,000,000 shares
authorized, 14,239,182 and 13,239,182
shares issued and outstanding at
March 31, 2023 and September 30,
2022
|
|
|
2,848
|
|
|
|
2,648
|
|
|
Additional paid-in capital
|
|
|
67,221,113
|
|
|
|
44,211,313
|
|
|
Statutory
reserves
|
|
|
637,882
|
|
|
|
494,223
|
|
|
Retained
earnings
|
|
|
5,095,191
|
|
|
|
3,802,265
|
|
|
Accumulated other comprehensive income
|
|
|
3,080,515
|
|
|
|
873,059
|
|
|
Total equity
attributable to Huadi International Group Co., Ltd.
|
|
|
76,037,549
|
|
|
|
49,383,508
|
|
|
Equity attributable to
non-controlling interests
|
|
|
290,233
|
|
|
|
250,433
|
|
|
Total shareholders'
equity
|
|
|
76,327,782
|
|
|
|
49,633,941
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
$
|
98,000,208
|
|
|
$
|
84,636,527
|
|
|
HUADI INTERNATIONAL
GROUP CO., LTD.
|
|
|
CONSOLIDATED
STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
|
|
|
FOR THE SIX MONTHS
ENDED MARCH 31, 2023 AND 2022
|
|
|
(UNAUDITED, IN U.S.
DOLLARS, EXCEPT SHARE DATA)
|
|
|
|
|
|
2023
|
|
|
2022
|
|
|
Sales
|
|
$
|
37,333,555
|
|
|
$
|
35,875,136
|
|
|
Production service
revenue
|
|
|
618,897
|
|
|
|
912,205
|
|
|
Cost of
sales
|
|
|
(32,222,729)
|
|
|
|
(30,844,955)
|
|
|
Gross
profit
|
|
|
5,729,723
|
|
|
|
5,942,386
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative
|
|
|
3,726,022
|
|
|
|
4,029,179
|
|
|
Research and
development
|
|
|
1,141,874
|
|
|
|
1,223,213
|
|
|
Foreign currency
transaction gains
|
|
|
(590,132)
|
|
|
|
36,021
|
|
|
Total operating
expenses
|
|
|
4,277,764
|
|
|
|
5,288,413
|
|
|
|
|
|
|
|
|
|
|
|
Operating
income
|
|
|
1,451,959
|
|
|
|
653,973
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(expense):
|
|
|
|
|
|
|
|
|
|
Interest income
(expenses), net
|
|
|
(268,260)
|
|
|
|
(952,644)
|
|
|
Other income
|
|
|
411,762
|
|
|
|
289,521
|
|
|
Total other income
(expense), net
|
|
|
143,502
|
|
|
|
(663,123)
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
|
|
1,595,461
|
|
|
|
(9,150)
|
|
|
|
|
|
|
|
|
|
|
|
Income tax
provision
|
|
|
(141,374)
|
|
|
|
-
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
|
1,454,087
|
|
|
|
(9,150)
|
|
|
Net income (loss)
attributable to non-controlling interests
|
|
|
17,502
|
|
|
|
(92)
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Huadi International Group Co., Ltd.
|
|
$
|
1,436,585
|
|
|
$
|
(9,058)
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
1,454,087
|
|
|
$
|
(9,150)
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income:
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustment
|
|
|
2,229,754
|
|
|
|
658,742
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive
income
|
|
|
3,683,841
|
|
|
|
649,591
|
|
|
Comprehensive income
attributable to non-controlling interests
|
|
|
39,800
|
|
|
|
6,495
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
attributable to Huadi International Group Co., Ltd.
|
|
$
|
3,644,041
|
|
|
$
|
643,096
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted
earnings (loss) per share
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.10
|
|
|
$
|
-(0.00)
|
|
|
Diluted
|
|
$
|
0.10
|
|
|
$
|
-(0.00)
|
|
|
Weighted average
numbers of common shares outstanding
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
14,028,071
|
|
|
|
13,192,232
|
|
|
Diluted
|
|
|
14,028,071
|
|
|
|
13,192,232
|
|
View original
content:https://www.prnewswire.com/news-releases/huadi-international-group-co-ltd-announces-the-first-six-months-of-fiscal-year-2023-financial-results-301918885.html
SOURCE Huadi International Group Co., Ltd.