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 fiscal year ended September
30, 2022.
Financial Highlights for the Fiscal Year
2022
|
|
For the Fiscal Years Ended September 30 |
(in $ millions, except earnings per share; differences due to
rounding) |
|
2022 |
|
|
|
2021 |
|
|
|
% Change |
Sales |
|
$ |
76.4 |
|
|
|
$ |
70.3 |
|
|
|
8.7 |
% |
Gross profit |
|
|
11.1 |
|
|
|
|
11.3 |
|
|
|
1.6 |
% |
Gross margin |
|
|
14.9 |
% |
|
|
|
16.1 |
% |
|
|
(1.2 percentage points) |
Net income |
|
|
1.9 |
|
|
|
|
2.6 |
|
|
|
(23.8 |
%) |
Net earnings per share – Basic and Diluted |
|
|
0.15 |
|
|
|
|
0.21 |
|
|
|
(28.6 |
%) |
- Revenue
increased by 8.7% to $76.4 million For the year ended September 30,
2022 from $70.3 million for the year ended September 30, 2021.
- Gross profit
decreased by 1.6% to$11.1 million for the year ended September 30,
2022, from $11.3 million for the year ended September 30,
2021.
- Net income
for the fiscal year ended September 30, 2022 was $1.9 million
compared to net income of $2.6 million for the fiscal year
ended September 30, 2021,
Mr. Di Wang, Chairman of the Company commented:
“The Company continues to focus its strategy on providing
high-quality services and products to maintain and expand HUDI’s
existing and prospective client base, which is shown by the
Company’s nearly 9% sales growth during the fiscal year ended
September 30, 2022. Despite a challenging year amid supply chain
disruptions and rising material costs, the Company is pleased to
deliver resilient performance during the past fiscal year and is
prepared to keep implementing current strategic plan to seek
sustainable growth in the coming year.”
Financial Results for the Fiscal year
2022
Sales
For the year ended September 30, 2022, revenues
increased by approximately $6.1 million or 8.7%, to approximately
$76.4 million from approximately $70.3 million for the year ended
September 30, 2021. The increase in revenues was primarily driven
by the following factors:
- During the fiscal year 2022, the
Company observed an increase of raw materials price, especially the
price of nickel which is an important component of stainless steel.
To minimize the impact the rise of raw material price, we increased
our weighted average selling price (“ASP”) during the fiscal year
2022.
- As a result of domestic shortage of
construction materials and recovery of construction market, the
Company’s domestic sales increased over 21.9% compared to the last
fiscal year. The Company’s international sales revenue during
fiscal year 2022 amounted to approximately $11.7 million, a
decrease of 31.6% compared to last fiscal year.
Gross profit
Our gross profit decreased by approximately $0.2
million, or 1.6%, to approximately $11.1 million for the year ended
September 30, 2022 from approximately $11.3 million for the year
ended September 30, 2021. Gross profit margin was 14.9% for the
year ended September 30, 2022, as compared to 16.1% for the year
ended September 30, 2021. The slight decrease of gross profit
margin was mainly due to increased raw material prices which drove
up the cost of sales.
Selling, general and administrative
(“SGA”) expenses
Selling, general and administrative expenses
decreased by approximately $0.2 million, or 3.5% to approximately
$6.5 million for the year ended September 30, 2022 as compared to
approximately $6.7 million for the year ended September 30, 2021.
The decrease of SGA expenses was mainly due to decreased freight
expenses for the Company’s international and domestic sales, and
increased travelling and agency expenses related to the increased
sales activities.
Research and development (“R&D”)
expenses
Research and development expenses increased by
approximately $0.3 million, or 13.3% to approximately $2.3 million
for the year ended September 30, 2022 as compared to approximately
$2.1 million for the year ended September 30, 2021.
Net Income
As a result of the factors described above, the
Company’s net income for the fiscal year ended September 30, 2022
was approximately $2.0 million compared to net profit of $2.6
million for the fiscal year ended September 30, 2021, a decrease in
profit of approximately $0.6 million, or approximately 23.8%.
Recent development
On November 9, 2022, the Company closed a
registered direct offering for the sale of 1,000,000 ordinary
shares. The Company received gross proceeds from the sale of the
shares of approximately $25 million before deducting placement
agent fees and other offering expenses.
On December 8, 2022, Ms. Qin Li tendered her
resignation as the Chief Financial officer the Company, effective
on December 8, 2022. On the same day, at the recommendation of the
Nominating Committee and the Compensation Committee, the Board of
Directors approved and confirmed the appointment of Mr. Jianping
Xiang as the succeeding Chief Financial Officer of the Company,
effective December 8, 2022.
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:
Wealth Financial Services LLC
Email: services@wealthfsllc.com
HUADI INTERNATIONAL GROUP CO.,
LTD.
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2022 AND
2021
(IN U.S. DOLLARS, EXCEPT SHARE
DATA)
|
|
2022 |
|
|
2021 |
|
Assets |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
13,195,999 |
|
|
$ |
15,350,197 |
|
Restricted cash |
|
|
1,347,246 |
|
|
|
1,304,518 |
|
Accounts receivable, net of allowance for doubtful accounts of
$2,197,396 and $3,066,937, respectively |
|
|
19,658,188 |
|
|
|
21,297,261 |
|
Accounts receivable – related parties |
|
|
- |
|
|
|
3,981,697 |
|
Notes receivable |
|
|
1,410,613 |
|
|
|
2,593,018 |
|
Inventories |
|
|
24,867,708 |
|
|
|
22,721,265 |
|
Advances to suppliers |
|
|
3,369,468 |
|
|
|
3,806,420 |
|
Advances to suppliers – related parties |
|
|
- |
|
|
|
5,550,504 |
|
Other receivables |
|
|
552,633 |
|
|
|
475,793 |
|
Total current assets |
|
|
64,401,855 |
|
|
|
77,080,673 |
|
Property, plant and equipment, net |
|
|
5,989,136 |
|
|
|
7,208,705 |
|
Land use rights, net |
|
|
1,069,891 |
|
|
|
1,234,636 |
|
Long-term investments |
|
|
12,836,916 |
|
|
|
14,171,928 |
|
Deferred tax assets |
|
|
338,729 |
|
|
|
549,921 |
|
TOTAL ASSETS |
|
$ |
84,636,527 |
|
|
$ |
100,245,863 |
|
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
919,492 |
|
|
$ |
1,713,716 |
|
Accounts payable - related parties |
|
|
2,439,105 |
|
|
|
- |
|
Accrued expenses and other current liabilities |
|
|
1,771,245 |
|
|
|
2,048,979 |
|
Notes payable |
|
|
548,253 |
|
|
|
2,312,556 |
|
Advances from customers |
|
|
4,401,440 |
|
|
|
4,667,084 |
|
Due to related parties |
|
|
606,986 |
|
|
|
514,913 |
|
Short-term borrowings |
|
|
11,888,662 |
|
|
|
33,459,043 |
|
Tax payable |
|
|
3,126,778 |
|
|
|
4,051,158 |
|
Total current liabilities |
|
|
25,701,961 |
|
|
|
48,767,449 |
|
Long-term borrowing |
|
|
9,300,625 |
|
|
|
- |
|
TOTAL LIABILITIES |
|
|
35,002,586 |
|
|
|
48,767,449 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’ equity: |
|
|
|
|
|
|
|
|
Common stock, $0.0002 par value, 250,000,000 shares
authorized, 13,239,182 and 13,127,000 shares
issued and outstanding, respectively |
|
|
2,648 |
|
|
|
2,625 |
|
Additional paid-in capital |
|
|
44,211,313 |
|
|
|
44,211,336 |
|
Statutory surplus reserves |
|
|
494,223 |
|
|
|
255,705 |
|
Retained earnings |
|
|
3,802,265 |
|
|
|
2,116,581 |
|
Accumulated other comprehensive income |
|
|
873,059 |
|
|
|
4,627,661 |
|
Total equity attributable to Huadi International Group Co.,
Ltd. |
|
|
49,383,508 |
|
|
|
51,213,908 |
|
Equity attributable to non-controlling interests |
|
|
250,433 |
|
|
|
264,506 |
|
Total shareholders’ equity |
|
|
49,633,941 |
|
|
|
51,478,414 |
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
84,636,527 |
|
|
$ |
100,245,863 |
|
HUADI INTERNATIONAL GROUP CO.,
LTD.
CONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
FOR THE YEARS ENDED SEPTEMBER 30, 2022,
2021 AND 2020(IN U.S. DOLLARS, EXCEPT SHARE
DATA)
|
|
|
2022 |
|
2021 |
|
2020 |
|
Sales |
|
$ |
74,702,625 |
|
|
$ |
67,006,655 |
|
|
$ |
57,767,081 |
|
Production service revenue |
|
|
1,663,523 |
|
|
|
3,239,956 |
|
|
|
1,370,197 |
|
Cost of sales |
|
|
(65,230,521 |
) |
|
|
(58,926,675 |
) |
|
|
(48,473,061 |
) |
Gross profit |
|
|
11,135,627 |
|
|
|
11,319,936 |
|
|
|
10,664,217 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and administrative |
|
|
6,452,173 |
|
|
|
6,684,410 |
|
|
|
3,938,511 |
|
Research and development |
|
|
2,330,913 |
|
|
|
2,057,547 |
|
|
|
2,120,649 |
|
Total operating expenses |
|
|
8,783,086 |
|
|
|
8,741,957 |
|
|
|
6,059,160 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating income |
|
|
2,352,541 |
|
|
|
2,577,979 |
|
|
|
4,605,057 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income (expenses): |
|
|
|
|
|
|
|
|
|
|
|
|
Interest expenses, net |
|
|
(1,629,642 |
) |
|
|
(2,058,461 |
) |
|
|
(2,162,589 |
) |
Other income, net |
|
|
1,398,173 |
|
|
|
1,948,527 |
|
|
|
1,132,780 |
|
Total other expenses, net |
|
|
(231,469 |
) |
|
|
(109,934 |
) |
|
|
(1,029,809 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes |
|
|
2,121,071 |
|
|
|
2,468,045 |
|
|
|
3,575,248 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax benefit/(provision) |
|
|
(173,017 |
) |
|
|
89,000 |
|
|
|
(218,949 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
|
1,948,054 |
|
|
|
2,557,045 |
|
|
|
3,356,299 |
|
Net income attributable to non-controlling interests |
|
|
23,852 |
|
|
|
25,570 |
|
|
|
33,563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to Huadi International Group Co., Ltd. |
|
$ |
1,924,202 |
|
|
$ |
2,531,475 |
|
|
$ |
3,322,736 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,948,054 |
|
|
$ |
2,557,045 |
|
|
$ |
3,356,299 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
(3,792,527 |
) |
|
|
1,452,328 |
|
|
|
1,225,301 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income |
|
|
(1,844,473 |
) |
|
|
4,009,373 |
|
|
|
4,581,600 |
|
Comprehensive income attributable to non-controlling interests |
|
|
(14,073 |
) |
|
|
40,093 |
|
|
|
45,816 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income attributable to Huadi International Group Co.,
Ltd. |
|
$ |
(1,830,400 |
) |
|
$ |
3,969,280 |
|
|
$ |
4,535,784 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted earnings per share |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.15 |
|
|
$ |
0.21 |
|
|
$ |
0.34 |
|
Diluted |
|
$ |
0.15 |
|
|
$ |
0.21 |
|
|
$ |
0.34 |
|
Weighted average numbers of common shares outstanding |
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
13,239,182 |
|
|
|
12,116,079 |
|
|
|
10,000,000 |
|
Diluted |
|
|
13,239,182 |
|
|
|
12,116,079 |
|
|
|
10,000,000 |
|
HUADI INTERNATIONAL GROUP CO.,
LTD.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
FOR THE YEARS ENDED SEPTEMBER 30, 2022,
2021 AND 2020
(IN U.S. DOLLARS)
|
|
|
|
|
|
2022 |
|
|
2021 |
|
2020 |
|
Cash Flows from Operating Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Net income |
|
$ |
1,948,054 |
|
|
$ |
2,557,045 |
|
|
$ |
3,356,299 |
|
Adjustments to reconcile net income to net cash provided by
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation |
|
|
792,888 |
|
|
|
735,333 |
|
|
|
723,586 |
|
Amortization |
|
|
32,087 |
|
|
|
32,349 |
|
|
|
30,048 |
|
Bad debt expense reverse |
|
|
(564,283 |
) |
|
|
(153,676 |
) |
|
|
- |
|
Deferred tax benefits (expenses) |
|
|
173,017 |
|
|
|
(89,000 |
) |
|
|
- |
|
Loss (gain) on disposal of fixed assets |
|
|
- |
|
|
|
1,767 |
|
|
|
(654,138 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
4,080,722 |
|
|
|
(8,823,928 |
) |
|
|
(260,202 |
) |
Notes receivable |
|
|
1,018,351 |
|
|
|
(1,987,871 |
) |
|
|
(10,332 |
) |
Inventories |
|
|
(4,653,336 |
) |
|
|
(756,588 |
) |
|
|
(1,987,737 |
) |
Advances to suppliers |
|
|
19,092 |
|
|
|
(2,727,661 |
) |
|
|
366,087 |
|
Advances to suppliers – related party |
|
|
5,457,504 |
|
|
|
78,283 |
|
|
|
180,333 |
|
Other receivables |
|
|
(132,062 |
) |
|
|
2,006,975 |
|
|
|
3,303,687 |
|
Accounts payable |
|
|
1,960,756 |
|
|
|
(238,638 |
) |
|
|
650,988 |
|
Accrued expenses and other current liabilities |
|
|
(91,961 |
) |
|
|
372,155 |
|
|
|
(387,358 |
) |
Notes payable |
|
|
(1,678,680 |
) |
|
|
707,021 |
|
|
|
(2,301,375 |
) |
Advances from customers |
|
|
188,878 |
|
|
|
3,040,106 |
|
|
|
222,805 |
|
Tax payable |
|
|
(589,163 |
) |
|
|
(402,478 |
) |
|
|
(28,401 |
) |
Net cash provided by (used in) operating activities |
|
|
8,027,856 |
|
|
|
(5,648,806 |
) |
|
|
3,204,290 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Investing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant and equipment |
|
|
(206,175 |
) |
|
|
(917,539 |
) |
|
|
(664,996 |
) |
Proceeds from disposition of property, plant and equipment |
|
|
- |
|
|
|
20,285 |
|
|
|
724,782 |
|
Net cash (used in) provided by investing activities |
|
|
(206,175 |
) |
|
|
(897,254 |
) |
|
|
59,786 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from Financing Activities: |
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from short-term borrowings |
|
|
21,719,160 |
|
|
|
35,820,322 |
|
|
|
38,620,077 |
|
Repayments on short-term borrowings |
|
|
(41,712,446 |
) |
|
|
(35,265,552 |
) |
|
|
(40,488,791 |
) |
Proceeds from long-term borrowings |
|
|
10,095,831 |
|
|
|
- |
|
|
|
- |
|
Proceeds from stock offering, net of offering costs |
|
|
- |
|
|
|
21,680,341 |
|
|
|
- |
|
Advances from related parties |
|
|
305,226 |
|
|
|
6,223,875 |
|
|
|
3,068,965 |
|
Repayments to related parties |
|
|
(152,628 |
) |
|
|
(7,182,813 |
) |
|
|
(5,889,557 |
) |
Net cash (used in) provided by financing activities |
|
|
(9,744,857 |
) |
|
|
21,276,173 |
|
|
|
(4,689,306 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate changes on cash and cash equivalents and
restricted cash |
|
|
(188,294 |
) |
|
|
219,398 |
|
|
|
113,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease) increase in cash and cash equivalents and restricted
cash |
|
|
(2,111,470 |
) |
|
|
14,949,511 |
|
|
|
(1,311,468 |
) |
Cash and cash equivalents and restricted cash at the beginning of
year |
|
|
16,654,715 |
|
|
|
1,705,204 |
|
|
|
3,016,672 |
|
Cash and cash equivalents and restricted cash at the end of
year |
|
$ |
14,543,245 |
|
|
$ |
16,654,715 |
|
|
$ |
1,705,204 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flows information: |
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for income taxes |
|
$ |
64,016 |
|
|
$ |
480,495 |
|
|
$ |
135,262 |
|
Cash paid for interest |
|
$ |
1,151,567 |
|
|
$ |
1,550,082 |
|
|
|
1,951,622 |
|
Huadi (NASDAQ:HUDI)
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From Aug 2024 to Sep 2024
Huadi (NASDAQ:HUDI)
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From Sep 2023 to Sep 2024