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Forward Industries Inc. (FORD) filed Annual Report for the period ended 2011-09-30.
Forward Industries Inc. has a market cap of $12.9 million; its shares were traded at around $1.62 with and P/S ratio of 0.7.
This is the annual revenues and earnings per share of FORD over the last 10 years. For detailed 10-year financial data and charts, go to 10-Year Financials of FORD.
Highlight of Business Operations:
We incurred a net loss of $2.9 million in Fiscal 2011 compared to net loss of $1.7 million in Fiscal 2010. The increase in net loss is primarily the result of higher sales and marketing expenses, as well as higher general and administrative expenses, which were offset, in part, by an increased gross profit on higher sales and “other income” (primarily interest income) in Fiscal 2011, as reflected in the table below:Sales of carrying cases for blood glucose monitoring kits represented 73% of our total net sales in Fiscal 2011 compared to 74% of our total net sales in Fiscal 2010.
Sales of other products increased $1.2 million, or 26%, to $6.2 million in Fiscal 2011 from $4.9 million in Fiscal 2010. Included in the Fiscal 2011 amount is $0.4 million of sales to Flash Ventures, Inc. (refer to Note 3 – Note Receivable in the Notes to Financial Statements), which we consider as non-recurring business. The balance of the increase was primarily driven by higher sales to five existing customers, which totaled $1.5 million in the aggregate and individually accounted for 10% or more of total increase in other products. Smaller increases in several other customer accounts, totaling $0.3 million in the aggregate, also contributed to the higher sales of “Other Products” in Fiscal 2011. These sales increases were offset, in part, by decreases in sales to several customers, most of which were individually immaterial, except to two customers, which each decreased $0.2 million, respectively.
Sales of other products represented 27% of our net sales in Fiscal 2011 compared to 26% of net sales in Fiscal 2010.
During Fiscal 2011, we used $1.8 million of cash in operations compared to a use of $1.7 million in Fiscal 2010. Net cash used in operating activities in Fiscal 2011 consisted of net loss of $2.9 million, adjusted by $0.5 million for non-cash items (primarily share based compensation), and offset by net cash provided by working capital items of $0.6 million. As to working capital items, cash provided by operations consisted of an increase in prepaid and other assets (current and long-term) of $0.8 million and a decrease in accrued expenses and other current liabilities of $0.3 million. These changes were offset, in part, by decreases in accounts receivables and inventory of $0.7 million and $20 thousand, respectively, and an increase in accounts payable of $0.5 million. The increase in prepaid and other assets (current and long term) is due primarily to advanced royalties paid to a strategic partner (refer to Note 11 – License Agreement – in Notes to Financial Statements), prepaid rents (for the Company’s California headquarters and its JAFZA branch office), prepaid tooling and mold costs in support of firm purchase orders, prepaid telecommunication and IT costs, and insurance premiums. The decrease in accrued expenses and other current liabilities is primarily due to payments made during the Fiscal 2011 in respect of items accrued as of September 30, 2010: (i) $229 thousand in severance payments to a former officer of the Company; (ii) $142 thousand in settlement costs paid to a shareholder (iii) $225 thousand in sales commissions; and (iv) $130 thousand in wages. The decrease in accounts receivable is due to an improvement in our days sales outstanding and timing differences in cash payments received immediately prior to the close of our fiscal year. The increase in accounts payable is due to higher materials purchases made in the fourth quarter of Fiscal 2011 compared to the fourth quarter of Fiscal 2010 and are primarily in support of sales orders received in our OEM channel.
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