Forward Industries, Inc. (NASDAQ:FORD), a designer and distributor of custom carry and protective solutions, today announced financial results for its fiscal year ended September 30, 2011.
Fiscal 2011 Financial Results – Compared to fiscal 2010:
- Net sales increased $3.8 million, or 20%, to $22.8 million in fiscal 2011 due to higher sales of diabetic products, which increased $2.5 million, or 18%, and higher sales of Other Products, which increased $1.2 million, or 26%.
- Gross profit increased $0.8 million, or 20%, to $5.1 million in fiscal 2011 primarily due to the increase in net sales, and to a lesser extent, decreases in certain components of costs of goods sold as a percentage of sales. These improvements to costs of goods sold were offset, in part, by higher materials costs.
- Sales and marketing expenses increased $1.2 million, or 56%, to $3.4 million in fiscal 2011 primarily due to investments we made in personnel and the incurrence of related travel and entertainment costs. To a lesser extent, additional investments made with regard to office and telecommunication, product development, and sampling and promotion also contributed to the increase. Such investments were made in Fiscal 2011 in order to expand our business, the beginnings of which we expect to see in the first quarter of our 2012 fiscal year, with continued growth thereafter.
- General and administrative expenses increased $1.1 million, or 29%, to $4.7 million in fiscal 2011 primarily due to investments we made in personnel including the payment of retention and inducement bonuses and the incurrence of related travel and entertainment costs, which, in part, was related to the relocation of our executive offices. To a lesser extent, additional investments made with regard to telecommunication, general office, and professional services also contributed to the increase. Such investments are related to the anticipated growth referred to in the preceding paragraph.
- Other income (expense) increased to $58 thousand of income in fiscal 2011 from $10 thousand of income in fiscal 2010, due primarily to higher interest income resulting from a note receivable.
- Net loss was $2.9 million, or ($0.36) per share, in 2011 compared to net loss of $1.7 million, or ($0.21) per share, in fiscal 2010. The increase in net loss was due primarily to the investments in operating expenses made in respect of fiscal 2011 and in anticipation of the growth we expect for our fiscal 2012 year (primarily sales and marketing as well as general and administrative expenses), which were offset, in part, by higher gross profit and other income.
Brett M. Johnson, Forward’s President and Chief Executive Officer, commented: “We are pleased with the growth in sales and gross profit that we achieved in our OEM business for fiscal 2011, which, on a standalone basis, would have been profitable in fiscal 2011. Our net loss in fiscal 2011 directly reflects the ongoing investments we are making in diversifying our selling channels and expanding our product portfolio.”