BEIJING, Feb. 6, 2024 /PRNewswire/ -- 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, 2023.
Financial Highlights for the Fiscal Year 2023
For the Fiscal Years Ended September 30
(in $ millions, except earnings per share; differences due to rounding)
2023
2022
% Change
Revenue
$
84.33
$
76.37
10.42 %
Gross profit
12.36
11.14
10.96 %
Gross profit margin
14.65 %
14.91 %
(0.26) percentage points
Net income
3.30
1.95
69.16 %
Net earnings per share – Basic and Diluted
0.23
0.15
53.3 %
Revenue increased by 10.42% to $84.33 million for the year ended September 30, 2023 from $76.37 million for the year ended September 30, 2022, marking the highest revenue in Company's history.
Gross profit increased by 10.96% to $12.36 million for the year ended September 30, 2023, from $11.14 million for the year ended September 30, 2022.
Net income for the fiscal year ended September 30, 2023, was $3.30 million, or net earnings of $0.23 per share. This is compared to net income attributable to HUDI of $1.95 million, or $0.15 per share, for the year ended September 30, 2022, an increase in profit of approximately $1.35 million, or approximately 69.16%.
Cash and cash equivalents as of September 30, 2023 was $20.19 million, compared to $13.20 million as of September 30, 2022
Mr. Jianping Xiang, Chief Financial Officer of the Company, commented: "As we gather to reflect on the culmination of the fiscal year 2023, we are pleased to report a commendable achievement for HUDI - a remarkable 10.42% increase in total revenue to $84.33 million which marked a new record for HUDI, 69.16% increase in net income, cash and cash equivalents totaled $20.19 million as of the year end, despite the challenging backdrop of the global COVID-19 pandemic. Since the end of control measures on COVID-19 in December 2022, our dedicated team has navigated unprecedented hurdles with resilience and determination. We recognize the profound impact of these external factors and extend our thoughts to those affected.
We are delighted to share that our strategic decision to extend our business in the domestic market in China has proven instrumental in propelling our sales growth. This expansion aligns with our commitment to meeting the evolving needs of our customers and diversifying our market presence. The robust performance of our team and the success of this strategic move underscore the strength of our business model and the agility of our operations.
I want to express my gratitude to our entire HUDI family for their unwavering commitment during these challenging times. As we move forward, we remain steadfast in our dedication to delivering value to our shareholders, adapting to the dynamic business landscape, and pursuing avenues for sustainable growth."
Financial Results for the Fiscal year 2023
Revenue
The following table presents revenue by geographic areas for the years ended September 30, 2023 and 2022 respectively.
(differences due to rounding)
September 30, 2023
Sales Amount (In USD)
As % of Sales
Top 5 Geographic Areas:
China
$
73.74
87.45 %
USA
7.15
8.47 %
India
1.60
1.89 %
United Mexican States
0.58
0.68 %
Australia
0.39
0.46 %
Other foreign countries
0.88
1.05 %
(differences due to rounding)
September 30, 2022
Sales Amount (In USD)
As% of Sales
Top 5 Geographic Areas:
China
$
64.79
84.69 %
USA
7.63
9.97 %
Taiwan
1.30
1.70 %
Australia
1.19
1.56 %
Marshall Islands
0.73
0.95 %
Other foreign countries
0.87
1.13 %
For the year ended September 30, 2023, revenue increased by approximately $7.96 million, or 10.42%, to approximately $84.33 million from approximately $76.37 million for the year ended September 30, 2022. The increase in revenues was primarily driven by the following factors:
1) Due to the end of control measures on COVID-19 since 2022 December, construction market recovered and we delivered several orders delayed by mentioned control measures.
2) We were extending business in domestic market in China. Our domestic sales increased over 13.8% year-over-year to $73.7 million which was offset by a slight decrease of 9.6%, year -over-year, of our international sales revenue.
Gross profit
Gross profit increased by approximately $1.22 million, or 10.96%, to approximately $12.36 million for the year ended September 30, 2023 from approximately $11.14 million for the year ended September 30, 2022. Gross profit margin was 14.65% for the year ended September 30, 2023, compared to 14.91% for the year ended September 30, 2022. The slight decrease in gross profit margin was mainly due to increased raw material prices, which drove up the cost of sales, while weighted ASP remained stable as we were extending domestic markets.
Selling, general and administrative ("SGA") expenses
Selling, general and administrative expenses increased by approximately $0.89 million, or 13.73%, to approximately $7.34 million for the year ended September 30, 2023 as compared to approximately $6.45 million for the year ended September 30, 2022. The increase in SGA expenses was mainly due to the following: i) $0.43 million bad debt expense provision during the year ended September 30, 2023, while $0.56 million bad debt recovery during the year ended September 30, 2022; and ii) increased freight and agency expenses related to the domestic market development.
Research and development ("R&D") expenses
Research and development expenses increased by approximately $0.22 million, or 9.43%, to approximately $2.55 million for the year ended September 30, 2023 as compared to approximately $2.33 million for the year ended September 30, 2022. Management is committed to expending research and development activities continually for more orders.
Interest income (expense)
Interest expense (net) decreased by approximately $1.33 million, or 81.82% to approximately $0.30 million for the year ended September 30, 2023, from approximately $1.63 million for the year ended September 30, 2022. The decrease in interest expense was mainly due to decreased bank loan the Company borrowed from the banks.
Other income and expense
The Company's net other income was approximately $0.70 million, which was mainly attributable to dividend income received from invested company, government grant received and rental income during fiscal year 2023.The Company's net other income was approximately $1.40 million, which was mainly attributable to dividend income and government grant received during fiscal year 2022.
Net income
As a result of the factors described above, the Company's net income for the fiscal year ended September 30, 2023, was approximately $3.30 million compared to net profit of $1.95 million for the fiscal year ended September 30, 2022, an increase in profit of approximately $1.35 million, or approximately 69.16%.
Cash and Cash Equivalents
As of September 30, 2023 and 2022, the Company had cash and cash equivalents of $20.19 million and $13.20 million, respectively.
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 the United States, Mexico, Thailand, Australia, Argentina, Taiwan, India, the Philippines, UAE, Canada, and Germany. Its products are widely used in the thermal and nuclear power plants, automotive, oil and gas, agricultural and industrial equipment, chemical engineering, and electricity markets. 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.
