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Forward Reports Fiscal 2011 Second Quarter Results

Forward Industries, Inc. (NASDAQ:FORD), a designer and distributor of custom carry and protective solutions, today announced financial results for its second fiscal quarter ended March 31, 2011.

Fiscal 2011 Second Quarter Financial Results – Compared to Fiscal 2010 Second Quarter:

  • Net sales increased $0.6 million, or 13%, to $5.0 million in the 2011 Quarter due to higher sales of diabetic products, which increased $0.4 million, or 11%, and higher sales of Other Products, which increased $0.2 million, or 23%.
  • Gross profit increased $0.2 million, or 16%, to $1.2 million in the 2011 Quarter primarily due to the increase in net sales and to a lesser extent, decreases in Hong Kong costs and freight, duties, and customs. These improvements were offset, in part, by higher materials costs due largely to new product launches.
  • Selling expenses of $0.7 million increased $0.1 million, or 24%, in the 2011 Quarter primarily due to higher personnel costs, and to a lesser extent, higher promotion and sampling costs.
  • General and administrative expenses of $1.1 million increased $0.5 million, or 99%, in the 2011 Quarter primarily due to higher personnel costs and related travel and entertainment expenses. To a lesser extent, higher professional fees also contributed to the increase.
  • Other income (expense) rose $74 thousand to $53 thousand of income in the 2011 Quarter due primarily to foreign currency transaction gains compared to losses in the 2010 Quarter, and to a lesser extent, to an increase in interest income attributable to interest on a note receivable.
  • Net loss was $0.6 million, or ($0.07) per share, in the 2011 Quarter compared to a net loss of $0.1 million, or ($0.01) per share, in the 2010 Quarter. This resulted from higher operating expenses (primarily general and administrative expenses), which were offset, in part, by higher gross profit and other income.

Fiscal 2011 Six-Month Period Financial Results – Compared to six-month period ended March 31, 2010:

  • Net sales increased $2.4 million, or 28%, to $11.0 million in the 2011 Period due to higher sales of diabetic products, which increased $1.5 million, or 23%, and higher sales of Other Products, which increased $0.9 million, or 45%.
  • Gross profit increased $0.6 million, or 32%, to $2.5 million in the 2011 Period primarily due to the increase in net sales and to a lesser extent, decreases in Hong Kong costs and freight, duties, and customs. These improvements were offset, in part, by higher materials costs.
  • Selling expenses of $1.1 million increased $0.1 million, or 11%, in the 2011 Period primarily due to higher personnel costs, and to a lesser extent, higher promotion and sampling costs, and postage costs.
  • General and administrative expenses of $2.0 million increased $0.8 million, or 66%, in the 2011 Period primarily due to higher personnel costs and related travel and entertainment expenses. To a lesser extent, higher professional fees (incurred in connection with effort to acquire Flash Ventures, Inc.), public costs, and office expenses also contributed to the increase.
  • Other income (expense) rose $61 thousand to $47 thousand of income in the 2011 Period due primarily to foreign currency transaction gains compared to losses in the 2010 Period and to a lesser extent, to an increase in interest income attributable to interest on a note receivable.
  • Net loss was $0.5 million, or ($0.07) per share, in the 2011 Period compared to a net loss of $0.3 million, or ($0.04) per share, in the 2010 Quarter. This resulted from higher operating expenses (primarily general and administrative expenses), which were offset, in part, by and higher gross profit and other income.

Brett M. Johnson, Forward’s President and Chief Executive Officer, commented: “We continue to make steady progress in increasing our level of sales. We are particularly heartened by new customer revenues, which speaks to broadening our customer base, which is critical to internally generated growth. As we implement our strategy to increase our selling capability, develop new products, and develop a retail sales channel, we have hired top-notch sales and operations professionals. This does not come without cost, and it is the investment in selling, general, and administrative expense that is, for the most part, the cause for the operating losses in fiscal 2011 and unfavorable comparisons with last year. We anticipate that the investment in operating expenses will be in greater evidence for the remainder of the year as the cost of these hires kicks in for full reporting periods.”

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