Dogness (International) Corporation Announces Unaudited Financial Results for the First Six Months of Fiscal Year 2018
First Half of Fiscal Year 2018 Financial Highlights (compared to prior year period unless stated otherwise)
- Total sales in the first half of fiscal 2018 increased by 66.0% to
$14.8 million from$8.9 million . - Gross profit increased by 79.5% to
$6.0 million from$3.3 million in 2017. Gross margin increased to 40.5% in the first half of fiscal 2018 from 37.5%. - Income from operations increased by 71.7% to
$3.7 million from$2.2 million . Operating margin increased to 25.1% in the first half of fiscal 2018 from 24.3%. - Net income increased by 53.8% to
$2.9 million from$1.9 million . Fully diluted net income per share increased to$0.18 from$0.13 .
Mr.
Summary Financial Results
Six Months Ended December 31, | ||||||||||
(USD, except for %) | 2017 | 2016 | % Change | |||||||
Sales | $ | 14,832,705 | $ | 8,936,767 | 66.0 | % | ||||
Cost of sales | (8,818,550 | ) | (5,587,142 | ) | 57.8 | % | ||||
Gross profit | 6,014,155 | 3,349,625 | 79.5 | % | ||||||
Operating expenses | ||||||||||
Selling expenses | 532,287 | 357,939 | 48.7 | % | ||||||
General and administrative expenses | 1,583,049 | 754,823 | 109.7 | % | ||||||
R&D expense | 170,387 | 64,820 | 162.9 | % | ||||||
Total operating expenses | 2,285,723 | 1,177,582 | 94.1 | % | ||||||
Income from operations | 3,728,432 | 2,172,043 | 71.7 | % | ||||||
Other income (expenses) | ||||||||||
Interest expense, net | (153,154 | ) | (181,708 | ) | (15.7 | )% | ||||
Foreign exchange gain (loss) | (175,053 | ) | 144,953 | (220.8 | )% | |||||
Other income | 1,506 | 79,915 | (98.1 | )% | ||||||
Total other income (expenses) | (326,701 | ) | 43,160 | (857.0 | )% | |||||
Income before income taxes | 3,401,731 | 2,215,203 | 53.6 | % | ||||||
Provision for income taxes | 511,010 | 336,274 | 52.0 | % | ||||||
Net income | $ | 2,890,721 | $ | 1,878,929 | 53.8 | % | ||||
Financial Results for Six Months Ended
Revenues
Revenues increased by approximately
Pet collars, pet leashes, and pet harnesses continued to account for the greatest percentages of total sales at 37.1%, 22.4%, and 17.6% of total sales, respectively, during the first half of fiscal 2018, compared to 39.8%, 21.8%, and 16.4% of total sales, respectively, in the first half of fiscal 2017.
Revenue by Product Type | ||||||||||||||||||
For the six months ended December 31, | ||||||||||||||||||
2017 | 2016 | |||||||||||||||||
Product category | Revenue | % of total Revenue |
Revenue | % of total Revenue |
Variance | Variance % |
||||||||||||
Pet leashes | $ | 3,328,950 | 22.4 | % | $ | 1,950,622 | 21.8 | % | $ | 1,378,329 | 70.7 | % | ||||||
Pet collars | 5,504,792 | 37.1 | % | 3,556,654 | 39.8 | % | 1,948,137 | 54.8 | % | |||||||||
Pet harnesses | 2,610,480 | 17.6 | % | 1,467,496 | 16.4 | % | 1,142,983 | 77.9 | % | |||||||||
Gift suspenders | 1,726,310 | 11.6 | % | 1,066,238 | 11.9 | % | 660,072 | 61.9 | % | |||||||||
Retractable dog leashes | 919,254 | 6.2 | % | 611,805 | 6.8 | % | 307,449 | 50.3 | % | |||||||||
Other pet accessories | 742,920 | 5.0 | % | 283,952 | 3.2 | % | 458,968 | 161.6 | % | |||||||||
Total | $ | 14,832,705 | 100.0 | % | $ | 8,936,767 | 100.0 | % | $ | 5,895,939 | 66.0 | % | ||||||
Revenue for six months ended December 31, |
Quantity sold for six months ended December 31, |
Average unit price for six months ended December 31, |
||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | Quantity variance |
% of Quantity variance |
2017 | 2016 | Price Difference |
||||||||||||||||
Pet leashes | $ | 3,328,950 | $ | 1,950,622 | 2,072,485 | 985,304 | 1,087,181 | 110.3 | % | $ | 1.6 | $ | 2.0 | $ | (0.4 | ) | ||||||||
Pet collars | 5,504,792 | 3,556,654 | 4,062,335 | 2,696,946 | 1,365,389 | 50.6 | % | 1.4 | 1.3 | 0.1 | ||||||||||||||
Pet Harnesses | 2,610,480 | 1,467,496 | 1,198,133 | 665,830 | 532,303 | 79.9 | % | 2.2 | 2.2 | - | ||||||||||||||
Gift suspenders | 1,726,310 | 1,066,238 | 5,255,411 | 3,662,925 | 1,592,486 | 43.5 | % | 0.3 | 0.3 | - | ||||||||||||||
Retractable dog leashes | 919,254 | 611,805 | 199,622 | 149,489 | 50,133 | 33.5 | % | 4.6 | 4.1 | 0.5 | ||||||||||||||
Other pet accessories | 742,920 | 283,952 | 1,043,814 | 515,259 | 528,555 | 102.6 | % | 0.7 | 0.6 | 0.1 | ||||||||||||||
Total | $ | 14,832,705 | $ | 8,936,767 | 13,831,800 | 8,675,753 | 5,156,047 | 59.4 | % | $ | 1.1 | $ | 1.0 | $ | 0.1 | |||||||||
Pet leashes
Revenue from pet leashes increased by approximately
Pet collars
Revenue from pet collars increased by approximately
Pet harnesses
Revenue from pet harnesses increased by approximately
Cost of goods sold
Cost of goods sold increased by approximately
Gross profit
During the six months ended
Gross profits by product type were as follows:
For the six months ended December 31, | ||||||||||||||||||
2017 | 2016 | |||||||||||||||||
Product category | Gross profit |
Gross profit % |
Gross profit |
Gross profit % |
Variance in Gross profit |
Variance in Gross profit % |
||||||||||||
Pet leashes | $ | 1,285,758 | 38.6 | % | $ | 723,549 | 37.1 | % | $ | 562,209 | 1.5 | % | ||||||
Pet collars | 2,282,617 | 41.5 | % | 1,326,693 | 37.3 | % | 955,924 | 4.2 | % | |||||||||
Pet harnesses | 112,320 | 42.6 | % | 526,274 | 35.9 | % | 586,046 | 6.7 | % | |||||||||
Gift suspenders | 699,399 | 40.5 | % | 415,506 | 39.0 | % | 283,896 | 1.5 | % | |||||||||
Retractable dog leashes | 342,809 | 37.3 | % | 237,404 | 38.8 | % | 105,405 | (1.5 | )% | |||||||||
Other pet accessories | 291,252 | 39.2 | % | 120,202 | 42.3 | % | 171,049 | (3.1 | )% | |||||||||
Total | $ | 6,014,155 | 40.5 | % | $ | 3,349,625 | 37.5 | % | $ | 2,664,530 | 3.1 | % | ||||||
Selling expenses
Selling expenses primarily included expenses incurred for participating in various trade shows to promote product sales, salary and sales commission expenses paid to the Company’s sales personnel, customs clearance charges for product exports, and shipping and delivery expenses. Selling expenses increased by 48.7% from
General and administrative expenses
General and administrative expenses increased by approximately
Research and development expenses
Research and development expenses increased by approximately
Other income (expense)
Other income (expense) primarily included interest expense and foreign exchange gain or loss. For the six months ended
Net income
Net income was approximately
Cash and cash flow
As of
Net cash provided by operating activities was
Recent developments
On
As of the date of this press release, the Company has an aggregate of 25,913,631 common shares outstanding, consisting of 16,844,631 Class A and 9,069,000 Class B common shares.
In
On
About
Forward Looking Statements
No statement made in this press release should be interpreted as an offer to purchase or sell any security. Such an offer can only be made in accordance with the Securities Act of 1933, as amended, and applicable state securities laws. Certain statements in this press release concerning our future growth prospects are forward-looking statements regarding our future business expectations intended to qualify for the “safe harbor” under the Private Securities Litigation Reform Act of 1995, which involve a number of risks and uncertainties that could cause actual results to differ materially from those in such forward-looking statements. The risks and uncertainties relating to these statements include, but are not limited to, risks and uncertainties regarding our ability to raise capital on any particular terms, fluctuations in earnings, fluctuations in foreign exchange rates, our ability to manage growth, our ability to realize revenue from expanded operation and acquired assets in
Contacts:
Rose Zu
Tel: +1-646-588-0383
Email: ir@dognesspet.com
UNAUDITED CONDENSED CONSOLIDATED FINANCIAL DATA
Summary of Unaudited Condensed Consolidated Balance Sheets Data
(In USD)
As of | ||||||||
December 31, 2017 | June 30, 2017 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ | 53,353,910 | $ | 1,504,596 | ||||
Accounts receivable, net | 4,980,118 | 4,001,156 | ||||||
Inventories, net | 5,362,362 | 2,856,578 | ||||||
Prepayments and other current assets | 448,058 | 307,133 | ||||||
Total current assets | 64,144,448 | 8,669,463 | ||||||
Property, plant and equipment, net | 9,372,915 | 8,753,040 | ||||||
Intangible assets, net | 82,917 | 86,014 | ||||||
Deferred tax assets | 11 | 9,543 | ||||||
TOTAL ASSETS | $ | 73,600,291 | $ | 17,518,060 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Short-term bank loans | $ | 5,179,690 | $ | 5,871,973 | ||||
Accounts payable | 1,807,845 | 647,867 | ||||||
Due to related party | 669,955 | 1,330,127 | ||||||
Advance from customers | 242,493 | 425,283 | ||||||
Accrued liabilities and other payable | 2,844,710 | 367,151 | ||||||
Taxes payable | 2,043,408 | 1,518,518 | ||||||
Total current liabilities | 12,788,101 | 10,160,919 | ||||||
Commitments | ||||||||
STOCKHOLDERS’ EQUITY | ||||||||
Common Shares, $0.002 par value, 100,0000,0000 shares authorized, 25,913,631 and 15,000,0000 issued and outstanding at December 31, 2017 and June 30, 2017, respectively |
||||||||
Class A Common Shares | 33,689 | 11,862 | ||||||
Class B Common Shares | 18,138 | 18,138 | ||||||
Additional paid-in capital | 51,803,764 | 1,625,306 | ||||||
Statutory reserves | 67,151 | 67,151 | ||||||
Retained earnings | 8,647,428 | 5,756,706 | ||||||
Accumulated other comprehensive income (deficit) | 242,020 | (122,022 | ) | |||||
Total stockholders’ equity | 60,812,190 | 7,357,141 | ||||||
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 73,600,291 | $ | 17,518,060 | ||||
Summary of Unaudited Condensed Consolidated Statement of Income and Other Comprehensive
Income Data
(In USD)
For the Six Months Ended December 31, | |||||||||
2017 | 2016 | ||||||||
Revenues | $ | 14,832,705 | $ | 8,936,767 | |||||
Cost of revenues | (8,818,550 | ) | (5,587,142 | ) | |||||
Gross Profit | 6,014,155 | 3,349,625 | |||||||
Operating expenses: | |||||||||
Selling expenses | 532,287 | 357,939 | |||||||
General and administrative expenses | 1,583,049 | 754,823 | |||||||
Research and development expenses | 170,387 | 64,820 | |||||||
Total operating expenses | 2,285,723 | 1,177,582 | |||||||
Income from operations | 3,728,432 | 2,172,043 | |||||||
Other income (expenses): | |||||||||
Interest expenses, net | (153,154 | ) | (181,708 | ) | |||||
Foreign exchange (loss) gain | (175,053 | ) | 144,953 | ||||||
Other income, net | 1,506 | 79,915 | |||||||
Total other income (expense) | (326,701 | ) | 43,160 | ||||||
Income before income taxes | 3,401,731 | 2,215,203 | |||||||
Provision for income taxes | 511,010 | 336,274 | |||||||
Net income | 2,890,721 | 1,878,929 | |||||||
Other comprehensive income: | |||||||||
Foreign currency translation gain | 364,042 | 7,623 | |||||||
Comprehensive income | $ | 3,254,763 | $ | 1,886,552 | |||||
Earnings Per share - Basic and Diluted | $ | 0.18 | $ | 0.13 | |||||
Weighted Average Shares Outstanding - Basic and diluted | 15,775,285 | 15,000,000 | |||||||
Summary of Unaudited Condensed Consolidated Statements of Cash Flows Data
(In USD)
For the Six Months Ended December 31, | ||||||||
2017 | 2016 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 2,890,721 | $ | 1,878,929 | ||||
Adjustments to reconcile net income to net cash | ||||||||
provided by operating activities: | ||||||||
Depreciation and amortization | 576,755 | 384,519 | ||||||
Changes in inventory reserve | (18,735 | ) | - | |||||
Recovery of doubtful account | (33,593 | ) | - | |||||
Deferred tax expenses | 9,730 | - | ||||||
Unrealized foreign exchange gain (loss) | 123,823 | (75,637 | ) | |||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (885,680 | ) | 916,685 | |||||
Inventories | (2,319,591 | ) | (85,340 | ) | ||||
Prepayments and other assets | (28,083 | ) | (354,637 | ) | ||||
Accounts payables | 1,110,063 | 226,897 | ||||||
Accrued expenses and other liabilities | 2,461,702 | 36,114 | ||||||
Advance from customers | (196,510 | ) | 39,898 | |||||
Taxes payable | 452,151 | 343,219 | ||||||
Net cash provided by operating activities | 4,142,753 | 3,310,647 | ||||||
Cash flows from investing activities: | ||||||||
Additions to property, plant and equipment | (819,309 | ) | (528,686 | ) | ||||
Net cash used in investing activities | (819,309 | ) | (528,686 | ) | ||||
Cash flows from financing activities: | ||||||||
Cash dividend paid | - | (2,725,883 | ) | |||||
Net Proceeds from initial public offering | 50,200,285 | - | ||||||
Proceeds from short-term bank loans | - | 3,851,796 | ||||||
Repayment of short-term bank loans | (918,660 | ) | (3,851,796 | ) | ||||
Proceeds from related party loans | - | 227,469 | ||||||
Repayment of related party loans | (736,894 | ) | - | |||||
Net cash provided by (used in) financing activities | 48,544,731 | (2,498,414 | ) | |||||
Effect of exchange rate changes on cash | (18,861 | ) | 133,294 | |||||
Net increase in cash | 51,849,314 | 416,841 | ||||||
Cash, beginning of period | 1,504,596 | 1,384,235 | ||||||
Cash, end of period | $ | 53,353,910 | $ | 1,801,076 | ||||
Supplemental disclosure information: | ||||||||
Cash paid for income tax | $ | 40,624 | $ | 1,524 | ||||
Cash paid for interest | $ | 154,479 | $ | 182,251 | ||||
Source: Dogness (International) Corporation