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Forward Reports Fiscal 2011 Second Quarter Results

Such risk factors include, among others: the loss of any key customer or material sales in our Diabetic Products line, where customer and sales concentration are high; whether important customers reduce or discontinue inclusion of carry solutions “in box” with their electronic products; the impact on our business and results of operations of an acquisition or the failure to make an acquisition; the potential lag in time between increased operating expenses incurred to implement our growth strategy and the time we begin to realize the benefits in increased revenue, if at all; the concentration of our accounts receivable in a small number of customers and our ability to collect payment; the adverse impact of customer pricing pressures on gross margins; failure of a third party borrower to repay us in full the principal of a note; fluctuations in foreign currency exchange rates that could result in increased costs or reduced revenues; levels of demand and pricing generally for electronic devices sold by our customers for which we supply carry solutions; the development of quality control, delivery, or pricing issues involving our Asian suppliers; uncertainties in the financial and credit markets; changes in, governmental regulations; variability in order flow from our OEM customers; a significant change in the Company’s relationship with one or more key customers (including changes affecting their businesses); and the loss of key sales personnel who have significant influence on our relationships with some of our largest customers.

About Forward Industries

Forward Industries, Inc. designs and distributes custom carrying case solutions for hand held electronic devices. Forward’s products can be viewed online at and



Three Months Ended March 31, Six Months Ended March 31,
2011   2010 2011   2010
Net sales $ 4,996,267 $ 4,419,681 $ 10,964,474 8,546,453
Cost of goods sold   3,841,999     3,425,938     8,433,676     6,628,515  
Gross profit   1,154,268     993,743     2,530,798     1,917,938  
Operating expenses:
Selling 662,447 533,286 1,103,437 991,558
General and administrative   1,099,591     551,414     2,011,911     1,211,535  
Total operating expenses   1,762,038     1,084,700     3,115,348     2,203,093  
Loss from operations   (607,770 )   (90,957 )   (584,550 )   (285,155 )
Other income (expense):
Interest income 29,748 8,700 35,403 29,032
Other income (expense), net   23,234     (29,937 )   11,834     (43,057 )
Total other income (expense)   52,982       (21,237 )     47,237       (14,025 )
Net loss $ (554,788 ) $ (112,194 ) $ (537,313 ) $ (299,180 )
Net loss per common and common equivalent share
Basic and diluted $ (0.07 ) $ (0.01 ) $ (0.07 ) $ (0.04 )
Weighted average number of common and common equivalent shares outstanding
Basic and diluted   8,085,875     7,964,938     8,125,304     7,952,462  



March 31, September 30,
2011 2010


(Unaudited) (Note 1)
Current assets:
Cash and cash equivalents $ 16,292,122 $ 18,471,520
Accounts receivable, net 4,240,424 4,621,181
Inventories, net 1,167,066 1,036,386
Note receivable 1,024,260 --
Prepaid expenses and other current assets   307,620     240,651  
Total current assets 23,031,492 24,369,738
Property and equipment, net 161,748 115,205
Other assets   52,276     46,032  
Total Assets $ 23,245,516   $ 24,530,975  

Liabilities and shareholders’ equity

Current liabilities:
Accounts payable $ 1,827,080 $ 2,439,273
Accrued expenses and other current liabilities   601,187     885,332  
Total liabilities   2,428,267     3,324,605  
Commitments and contingencies
Shareholders’ equity:
Preferred stock, par value $0.01 per share; 4,000,000 shares authorized;
no shares issued and outstanding -- --
Common stock, par value $0.01 per share; 40,000,000 shares authorized,
8,792,296 and 8,761,629 shares issued; and
8,085,886 and 8,055,219 shares outstanding, respectively 87,923 87,616
Capital in excess of par value 16,617,027 16,469,142
Retained earnings 5,372,356 5,909,669
Treasury stock, 706,410 shares at cost   (1,260,057 )   (1,260,057 )
Total shareholders’ equity   20,817,249     21,206,370  
Total liabilities and shareholders’ equity $ 23,245,516   $ 24,530,975  

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