WENZHOU, Feb. 15, 2023 (GLOBE NEWSWIRE) -- Huadi International Group Co., Ltd. (“HUDI” or the “Company”) (NASDAQ: HUDI), a leading developer and manufacturer of industrial stainless steel seamless pipes and tubes products in China, today announced its financial results for the fiscal year ended September 30, 2022.
Financial Highlights for the Fiscal Year 2022
| For the Fiscal Years Ended September 30 | |||||||||||||
| (in $ millions, except earnings per share; differences due to rounding) | 2022 | 2021 | % Change | ||||||||||
| Sales | $ | 76.4 | $ | 70.3 | 8.7 | % | |||||||
| Gross profit | 11.1 | 11.3 | 1.6 | % | |||||||||
| Gross margin | 14.9 | % | 16.1 | % | (1.2 percentage points) | ||||||||
| Net income | 1.9 | 2.6 | (23.8 | %) | |||||||||
| Net earnings per share – Basic and Diluted | 0.15 | 0.21 | (28.6 | %) | |||||||||
Mr. Di Wang, Chairman of the Company commented: “The Company continues to focus its strategy on providing high-quality services and products to maintain and expand HUDI’s existing and prospective client base, which is shown by the Company’s nearly 9% sales growth during the fiscal year ended September 30, 2022. Despite a challenging year amid supply chain disruptions and rising material costs, the Company is pleased to deliver resilient performance during the past fiscal year and is prepared to keep implementing current strategic plan to seek sustainable growth in the coming year.”
Financial Results for the Fiscal year 2022
Sales
For the year ended September 30, 2022, revenues increased by approximately $6.1 million or 8.7%, to approximately $76.4 million from approximately $70.3 million for the year ended September 30, 2021. The increase in revenues was primarily driven by the following factors:
Gross profit
Our gross profit decreased by approximately $0.2 million, or 1.6%, to approximately $11.1 million for the year ended September 30, 2022 from approximately $11.3 million for the year ended September 30, 2021. Gross profit margin was 14.9% for the year ended September 30, 2022, as compared to 16.1% for the year ended September 30, 2021. The slight decrease of gross profit margin was mainly due to increased raw material prices which drove up the cost of sales.
Selling, general and administrative (“SGA”) expenses
Selling, general and administrative expenses decreased by approximately $0.2 million, or 3.5% to approximately $6.5 million for the year ended September 30, 2022 as compared to approximately $6.7 million for the year ended September 30, 2021. The decrease of SGA expenses was mainly due to decreased freight expenses for the Company’s international and domestic sales, and increased travelling and agency expenses related to the increased sales activities.
Research and development (“R&D”) expenses
Research and development expenses increased by approximately $0.3 million, or 13.3% to approximately $2.3 million for the year ended September 30, 2022 as compared to approximately $2.1 million for the year ended September 30, 2021.
Net Income
As a result of the factors described above, the Company’s net income for the fiscal year ended September 30, 2022 was approximately $2.0 million compared to net profit of $2.6 million for the fiscal year ended September 30, 2021, a decrease in profit of approximately $0.6 million, or approximately 23.8%.
Recent development
On November 9, 2022, the Company closed a registered direct offering for the sale of 1,000,000 ordinary shares. The Company received gross proceeds from the sale of the shares of approximately $25 million before deducting placement agent fees and other offering expenses.
On December 8, 2022, Ms. Qin Li tendered her resignation as the Chief Financial officer the Company, effective on December 8, 2022. On the same day, at the recommendation of the Nominating Committee and the Compensation Committee, the Board of Directors approved and confirmed the appointment of Mr. Jianping Xiang as the succeeding Chief Financial Officer of the Company, effective December 8, 2022.
About Huadi International Group Co., Ltd.
Huadi International Group Co., Ltd. is a leading manufacturer of industrial stainless steel seamless pipes and tubes products with extensive distribution facilities and network for over twenty provinces in China and across international steel pipes industry. It offers a broad range of products exported to twenty countries and regions such as United States, Mexico, Thailand, Australia, Argentina, Taiwan, India, the Philippines, UAE and Canada. Its products are widely used in the oil & gas transmission, chemistry engineering, food processing, medical devices, aeronautics and astronautics, boiler, irrigation works construction, electricity, automobile, naval architecture, paper mill and mechanical industries. For more information about the Company, please visit: http://www.huadi.cc.
Forward-Looking Statement
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may, “will, “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company’s goals and strategies; the Company’s future business development; financial condition and results of operations; product and service demand and acceptance; reputation and brand; the impact of competition and pricing; changes in technology; government regulations; fluctuations in general economic and business conditions in China and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the SEC. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward‐looking statements to reflect events or circumstances that arise after the date hereof.