- Achieves Fiscal Year 2020 Net Income Per Diluted Share of
$0.05 Compared to a Net Loss of
$0.03 Per Diluted Share for Fiscal
Year 2019
- Continues to Grow Customer Base with Another Customer Now
Accounting for More than 10% of Revenue
LISHUI, China, Jan. 29, 2021 /PRNewswire/ -- Farmmi, Inc.
("Farmmi" or the "Company") (NASDAQ: FAMI), an agriculture products
supplier in China, today announced
its financial results for the twelve months ended September 30, 2020.
Ms. Yefang Zhang, Chairwoman and
CEO of the Company stated, "We are pleased with our team's business
development success in a challenging year, as we achieved positive
net income for the year ended September 30,
2020 compared to a net loss last year. By working
closely with our customers and supply chain, we tried to reduce the
impact of the widespread COVID-19 closures and ongoing business
disruptions. This was not an easy task but we were able to
stabilize our business, while reducing costs to meet the lower
near-term demand level. Longer term, we expect a resumption
in growth and are taking actions now to position our company.
For example, we continue to diversify our customer base as part of
our overall growth strategy, led by the popularity of our healthy,
vitamin-rich shiitake and mu er mushrooms. This includes
expanding another customer to account for more than 10% of revenue,
as we began to utilize our expanded, state-of-the-art production
and warehousing capabilities. We believe that in addition to
expanding our opportunities at existing customers, our strategy
will lead to greater visibility and reduced volatility."
Ms. Zhang continued: "Having spent the past 20 years managing
operations, building long-term customer relationships and
establishing a global supply chain, I can say without hesitation
that our prospects are brighter today than any time in recent
memory. Our competitive position is strong, reinforced by our
extensive, high quality agricultural offerings, global brand and
track record. Even our physical location in the densely
populated, economically strong city of Lishui benefits us given its
impressive history of cultivating edible fungi for over 1,800
years, the supportive government, established infrastructure and
skilled workforce. We are in the midst of a major shift in
dietary priorities, where plant based options are becoming
commonplace. Edible fungi have an inherent advantage given
their rich flavor, gentle texture and stability conducive to
shipping long distances without spoilage, which is ideal as we
start to shift more of our revenue outside of domestic China – the world's largest producer and
consumer of edible fungi – into the U.S., Japan, Canada, Israel and other countries."
Financial Highlights
|
|
For the Twelve
Months Ended
September
30,
|
($ millions,
except per share and percentage data)
|
|
2020
|
|
|
2019
|
|
|
Change
|
Revenues
|
|
$
|
30.17
|
|
|
$
|
30.84
|
|
|
|
(2.19)%
|
Shiitake
|
|
|
16.69
|
|
|
|
17.89
|
|
|
|
(6.77)%
|
Mu Er
|
|
|
12.30
|
|
|
|
11.66
|
|
|
|
5.51%
|
Other edible fungi
and other agricultural products
|
|
|
1.18
|
|
|
|
1.29
|
|
|
|
(8.21)%
|
Gross
profit
|
|
|
4.96
|
|
|
|
5.42
|
|
|
|
(8.44)%
|
Gross
margin
|
|
|
16.46%
|
|
|
|
17.58%
|
|
|
|
1.12 pp*
|
Income from
operations
|
|
$
|
2.10
|
|
|
$
|
3.04
|
|
|
|
(30.79)%
|
Interest
Expense
|
|
|
0.27
|
|
|
|
1.20
|
|
|
|
(77.3)%
|
Net Income (loss)
attributable to Farmmi, Inc.
|
|
|
0.82
|
|
|
|
(0.31)
|
|
|
|
1.12
|
Basic and diluted
income (loss) per share
|
|
|
0.05
|
|
|
|
(0.03)
|
|
|
|
0.08
|
*Notes: pp represents percentage points
Revenues
Total revenues for the year ended September 30, 2020
decreased by $0.67 million, or 2.19%,
to $30.17 million from $30.84 million for the year ended
September 30, 2019. The decrease in sales was primarily
a result of reduced total customer orders related to
shelter-at-home and travel restrictions imposed by the Chinese
government, and lower international sales, which typically have a
higher selling price and gross margin, both due to the COVID-19
outbreak. In addition, during fiscal year 2020 the Company lowered
the selling prices of some products in an effort to stimulate
sales.
Revenue from sales of Mu Er increased by $0.64 million, or 5.51%, to $12.30 million for the year ended
September 30, 2020 from $11.66
million for the year ended September 30, 2019, with
1,019 tons sold for the year ended September 30, 2020,
compared to 945 tons for the year ended September 30,
2019. Revenue from sales of Shiitake decreased by
$1.21 million, or 6.77%, to
$16.68 million for the year ended
September 30, 2020 from $17.89
million for the year ended September 30, 2019, with
1,354 tons sold for the year ended September 30, 2020,
compared to 1,420 tons for the year ended September 30,
2019. Revenue from sales of other edible fungi and other
agricultural products decreased by $0.11
million, or 8.21%, to $1.18
million for the year ended September 30, 2020 from
$1.29 million for the year ended
September 30, 2019, with 43 tons sold for the year ended
September 30, 2020, compared to 41 tons sold for the year
ended September 30, 2019.
Cost of Revenues
Cost of revenues decreased by $0.22
million, or 0.85%, to $25.20
million for the year ended September 30, 2020 from
$25.42 million for the year ended
September 30, 2019.
Cost of revenues of Shiitake decreased by $0.76 million or 5.14%, to $14.00 million for the year ended
September 30, 2020 from $14.75
million for the year ended September 30, 2019.
Cost of revenue of Mu Er increased by $0.61
million or 6.33% to $10.30
million for the year ended September 30, 2020 from
$9.69 million for the year ended
September 30, 2019. Cost of revenue of other edible fungi and
agricultural products decreased by $0.07
million, or 7.37%, to $0.91
million for the year ended September 30, 2020 from
$0.98 million for the year ended
September 30, 2019.
Gross Profit
Overall gross profit decreased by $0.46
million or 8.44%, to $4.96
million for the year ended September 30, 2020 from
$5.42 million for the same period of
the last year. Gross profit from sales of Shiitake decreased by
$0.45 million or 14.45%, to
$2.69 million for the year ended
September 30, 2020 from $3.14
million for the year ended September 30, 2019. Gross
profit from sales of Mu Er increased by $0.03 million or 1.50%, to $2.00 million for the year ended
September 30, 2020 from $1.97
million for the year ended September 30, 2019. Gross
profit from sales of other edible fungi and agricultural products
decreased by $0.03 million or 10.89%,
to $0.27 million for the year ended
September 30, 2020 from $0.31
million for the year ended September 30, 2019.
Overall gross margin decreased by 1.12 percentage points to
16.46% for the year ended September 30, 2020 from 17.58% for
the year ended September 30, 2019. The decrease in overall
gross margin reflects lower sales for the year ended September 30, 2020, as compared to the year ended
September 30, 2019, primarily due to
the decreased customer orders and lower international sales caused
by the COVID-19 pandemic, and the price reductions to stimulate
customer orders,.
Expense Reductions
The Company reduced costs to reflect its lower sales level
related to shelter-at-home and travel restrictions imposed by the
Chinese government due to the COVID-19 outbreak, combined with
lower international sales, and targeted reductions in headcount and
salaries. Selling and distribution expenses decreased by
$0.26 million or 43.68 %, to
$0.33 million for the year ended
September 30, 2020 from $0.59
million for the year ended September 30, 2019. General
and administrative expenses decreased by $0.16 million or 8.71%, to $1.64 million for the year ended
September 30, 2020 from $1.80
million for the year ended September 30, 2019.
Interest expense was $0.27 million
for the year ended September 30, 2020, as compared to
$1.20 million for the year ended
September 30, 2019. Amortization of debt issuance costs
was $1.09 million for the year ended
September 30, 2020, as compared to $2.11 million for the year ended
September 30, 2019. The decreases were primarily attributable
to the lesser interest expense incurred for the senior convertible
notes, as the notes were fully paid off in June 2020.
Other Income
Other income was $0.11 million for
the year ended September 30, 2020, as compared to other
expenses of $1.88 thousand for the
year ended September 30, 2019. During fiscal 2020, the Company
received a grant awarded from the local government of Lishui City
for expanding international business. No such grant was received in
fiscal 2019.
Net Income
Net income attributable to common shareholders for the year
ended September 30, 2020 was
$0.82 million or $0.05 per basic and diluted share, compared to a
net loss of $0.31 million or a loss
of $0.03 per share for the year ended
September 30, 2019.
Financial Condition
As of September 30, 2020, the
Company had a cash balance of $0.55
million, with a restricted cash balance of $1.62 million. As of September 30, 2020, the Company had advances to
suppliers of $23.37 million, which
were made based on sales orders received or expected to be received
in the future months. As of today, approximately $9.62 million, or 40% has been utilized, with the
remaining balance expected to be fully utilized by September of
2021. As of September 30, 2020, the
Company had an accounts receivable balance of $10.95 million, of which $8.33 million or 76% was collected as of today,
with the remainder expected to be collected by March of 2021.
About Farmmi, Inc.
Headquartered in Lishui, Zhejiang, Farmmi, Inc. (NASDAQ: FAMI), is a
leading agricultural products supplier, processor and retailer of
Shiitake mushrooms, Mu Er mushrooms and other edible fungi.
For further information about the Company, please visit:
http://ir.farmmi.com.cn/.
Forward-Looking Statements
This announcement contains forward-looking statements within the
meaning of the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. All statements other than statements
of historical fact in this announcement are forward-looking
statements, including the potential impact of COVID-19 on our
business within and outside of China. These forward-looking
statements involve known and unknown risks and uncertainties and
are based on current expectations and projections about future
events and financial trends that the Company believes may affect
its financial condition, results of operations, business strategy
and financial needs. Investors can identify these forward-looking
statements by words or phrases such as "may," "will," "expect,"
"anticipate," "aim," "estimate," "intend," "plan," "believe,"
"potential," "continue," "is/are likely to" or other similar
expressions. The Company undertakes no obligation to update
forward-looking statements to reflect subsequent occurring events
or circumstances, or changes in its expectations, except as may be
required by law. Although the Company believes that the
expectations expressed in these forward-looking statements are
reasonable, it cannot assure you that such expectations will turn
out to be correct, and the Company cautions investors that actual
results may differ materially from the anticipated results.
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SOURCE Farmmi, Inc.