Bon Natural Life Limited Announces Record-Setting Full Fiscal Year 2022 Results
02/10/2023 - 08:30 AM
Revenue increase d by 17.3 % to $ 29.9 million . Delivered full fiscal year 202 2 net income of $ 6. 2 million, or $ 0.74 per diluted share . Xian, China, Feb. 10, 2023 (GLOBE NEWSWIRE) -- Bon Natural Life Limited (Nasdaq: BON) ("BON" or the "Company"), one of the leading bio-ingredient solutions providers in the natural, health and personal care industries, today announced its 2022 annual financial results for the fiscal year ended September 30, 2022.
FY 202 2 Financial Highlights
Total net revenues were US$29.9 million , representing a 17.3% increase from US$25.5 million for the same period in 2021.Gross profit increased by 32.5% to US$9.4 million from US$7.1 million for the same period in 2021.Gross margin was 31.5% , an increase by 3.6% from 27.9% for the same period in 2021.Revenues and gross profit of our bioactive food ingredient products increased by 48.5% and 61.4% compared to the same period of 2021. Net income increased by 35.4% to US$6.2 million in FY2022 from US$4.6 million for the same period in 2021.Diluted earnings per share (“EPS”) was $0.74 , compared to $0.68 for the same period in 2021.Management Commentary
“We are pleased to conclude fiscal 2022 with solid growth in both top and bottom lines compared to fiscal year 2021 despite challenges caused by volatile global environment including high inflation, supply chain disruption, and persistent outbreak of COVID-19 pandemic in last year.” Commented Richard (Yongwei) Hu, BON’s Chairman & CEO, “I would like to recognize our team for their contribution in navigating through these conditions by market strategy adjustment, disciplined cost management as well as pricing efforts. Thanks to their relentless effort and hard work, the gross profits of fragrance compound, health supplemental powder drinks and bioactive food ingredients increased by 27.3% , 10.4% and 61.4% from the prior year. Our net income grew 35.4% to $6.2 million .”
“Looking ahead to 2023, we expect the first-phase completion of our third production site - Yumen Plant in May 2023. Once up and running, Yumen Plant will add 150% revenue growth potential on an annualized basis. In addition, the successful launch of our new vegetable based probiotic powder drink for regulation and improvement of human's overall microbiome and digestive health, as well as natural based personal care product for female hygiene health will attract more natural health-conscious consumers and further drive revenue growth for BON. Last but not the least, the reopening of China will help boost our profit by alleviate pressures from supply chain and logistics. With our new Yumen plant, our new natural based products, along with post-COVID reopening, we are confident to deliver the sustainable growth and create lasting long-term value for our shareholders.”
FY 202 2 Product Categories Summary: Growth vs. Prior Year
Revenues increase Gross Profits increase Fragrance Compounds 7.6 % 27.3 % Health Supplements (Powder Drinks) 7.4 % 10.4 % Bioactive Food Ingredients 48.5 % 61.4 %
Fragrance Compounds
Revenue from sales of fragrance compound products increased by 7.6% to US$13.7 million from US$12.7 million for the same period in 2021. The increase was primarily attributable to 9.1% and 27.5% increases in average purchase order by customers and average selling price, partially offset by a decrease of 15.1% in sales volume due to the shortage of material supply. Gross profit from fragrance compound increased by 27.3% from US$3.0 million to US$3.8 million for the same period in 2021. The increase was primarily attributable to the above referenced factors. Health Supplements (Powder Drinks)
Revenue from sales of health supplement (powder drinks) products increased by 7.4% to US$7.1 million from US$6.7 million for the same period in 2021. The increase was attributable to 7.0% and 1.0% increases in average selling price and sales volume. Gross profit from health supplement (powder drinks) increased by 10.4% from US$2.1 million to US$2.3 million for the same period in 2021. The increase was primarily due to the above referenced factors. Bioactive Food Ingredients
Revenue from sales of bioactive food ingredient products increased by 48.5% to US$9.1 million from US$6.1 million for the same period in 2021. The increase was mainly attributable to 27.3% increase in sales volume due to strong customer demand and sales effort. The increase was also due to 17.4% increase in average selling price. Gross profit of our bioactive food ingredient products increased by 61.4% to $3.4 million from $2.1 million for the same period in 2021. This increase was primarily due to the above referenced reasons. Selling expenses increased by $80,292 , or approximately 58.0% , from $138,530 t o $218,822 in the same period of 2021, mainly attributable to increase of advertising expense, salaries and social benefits on attending more trade shows as well as recruiting more sales staff.
Research and development (“R&D”) expenses increased by $175,508 , or approximately 70.5% , from $249,050 in fiscal year 2021 to $424,558 in fiscal year 2022. The increase was mainly due to an increase of $140,504 in outsourcing R&D activities to external consulting firms.
Government subsidies received in the form of a grant and recognized as other operating income totaled $1,306,627 and $449,972 for the fiscal years ended September 30, 2022 and 2021, respectively.
N et income increased from $4.6 million in the fiscal year ended September 30, 2021 to $6.2 million in the same period of 2022.
Net cash used in operating activities during the year ended September 30, 2022 was $0.2 million compared to $4.1 million net cash provided by operating activities in the same period of 2021. The decrease was mainly attribute to a decrease of $3,632,922 in taxes payable primarily due to income and VAT tax paid in fiscal year 2022, an increase of $1,300,942 account receivable due to increased sales in the year ended September 30, 2022, and decrease in deferred revenue of $875,295 due to changes in customer payment pattern related with COVID-19.
Basic earnings per share (“EPS”) was $0.75 , compared to $0.69 for the same period in 2021.
Diluted earnings per share (“EPS”) was $0.74 , compared to $0.68 for the same period in 2021.
Subsequent Events
On September 30, 2022, the Company announced there will be a delay to the completion of the construction work for its third production site – Yumen Plant to May 2023. On January 17, 2023, the Company closed a private offering with gross proceeds of $2,200,000 , mainly to fund its new Yumen Plant and working capital for the new production facility. Investor Conference Call and Webcast
A live webcast to discuss the Company’s FY 2022 financial results will be held on February 10, 2023, beginning at 9:00 a.m. EST. The webcast and accompanying slide presentation may be accessed on the Company’s IR website at https://www.bnlus.com/investorrelations-ep . The webcast also can be accessed by using the direct link: https://event.choruscall.com/mediaframe/webcast.html?webcastid=oKNXFTV5 . For those unable to listen to the live webcast, a recorded version will be available on the Company’s website after the event.
Pre-registration: https://dpregister.com/sreg/10175699/f5ecaa11e8
Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the operator. Participants may pre-register at any time, up to and including after the time that the call has started.
Those without internet access or unable to pre-register may dial in by calling:
About Bon Natural Life Limited
The Company focuses on the manufacturing of personal care ingredients, such as plant extracted fragrance compounds for perfume and fragrance manufacturers, natural health supplements such as powder drinks and bioactive food ingredient products mostly used as food additives and nutritional supplements by their customers. For additional information, please visit the Company’s website at www.bnlus.com .
Safe Harbor 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; product and service demand and acceptance; changes in technology; economic conditions; the growth of the natural, health and personal care market in China and the other international markets the Company plans to serve; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and the international markets the Company plans to serve 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.
CONSOLIDATED BALANCE SHEETS
As of September 30, 2022 2021 ASSETS CURRENT ASSETS Cash $ 840,861 $ 1,903,867 Short-term investments - 1,703,314 Accounts receivable, net 6,784,307 6,152,807 Inventories, net 1,722,120 1,596,492 Advance to suppliers, net 4,091,990 4,094,312 Acquisition deposit 1,000,000 1,000,000 Prepaid expenses and other current assets 277,509 98,960 TOTAL CURRENT ASSETS 14,716,787 16,549,752 Property, plant and equipment, net 21,624,437 19,228,642 Intangible assets, net 366,167 411,056 Right-of-use lease assets, net 546,690 201,007 Deferred tax assets, net 2,768 22,342 TOTAL ASSETS $ 37,256,849 $ 36,412,799 LIABILITIES AND EQUITY CURRENT LIABILITIES Short-term loans $ 2,424,587 $ 41,381 Current portion of long-term loans 2,135,979 448,005 Accounts payable 214,585 380,385 Due to related parties 72,836 245,104 Taxes payable 1,239,708 5,052,018 Deferred revenue 188,745 1,096,101 Accrued expenses and other current liabilities 114,431 41,711 Finance lease liabilities, current 26,285 161,286 Operating lease liability, current 230,182 62,871 TOTAL CURRENT LIABILITIES $ 6,647,338 $ 7,528,862 Long-term loans 189,813 2,173,532 Finance lease liabilities, noncurrent - 28,953 Operating lease liability, noncurrent 327,202 146,703 TOTAL LIABILITIES 7,164,353 9,878,050 COMMITMENTS AND CONTINGENCIES EQUITY Ordinary shares, $0.00 01 par value, 500,000,000 shares authorized, 8,396,226 and 8,330,000 shares issued and outstanding as of September 30, 2022 and 2021, respectively $ 840 $ 833 Additional paid in capital 15,711,450 15,540,433 Statutory reserve 1,804,116 1,050,721 Retained earnings 14,676,769 9,192,676 Accumulated other comprehensive income (2,631,171 ) 222,221 TOTAL BON NATURAL LIFE LIMITED SHAREHOLDERS’ EQUITY 29,562,004 26,006,884 Non-controlling interest 530,492 527,865 TOTAL SHAREHOLDERS’ EQUITY 30,092,496 26,534,749 TOTAL LIABILITIES AND EQUITY $ 37,256,849 $ 36,412,799
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
For the Years Ended September 30, 2022 2021 2020 REVENUE $ 29,908,561 $ 25,494,564 $ 18,219,959 COST OF REVENUE (20,484,996 ) (18,382,637 ) (13,017,646 ) GROSS PROFIT 9,423,565 7,111,927 5,202,313 OPERATING EXPENSES Selling expenses (218,822 ) (138,530 ) (161,719 ) General and administrative expenses (2,239,967 ) (1,323,726 ) (1,367,070 ) Research and development expenses (424,558 ) (249,050 ) (205,359 ) Total operating expenses (2,883,347 ) (1,711,306 ) (1,734,148 ) INCOME FROM OPERATIONS 6,540,218 5,400,621 3,468,165 OTHER INCOME (EXPENSES) Interest income 1,392 3,207 714 Interest expense (446,884 ) (417,266 ) (329,102 ) Unrealized foreign transaction exchange gain (loss) 18,831 (45,124 ) (248 ) Gain on disposal of fixed assets - - 20,150 Government subsidies 1,306,627 449,972 362,187 Income from short-term investments 20,343 565 - Other income 68,922 38,409 132,713 Total other income, net 969,231 29,763 186,414 INCOME BEFORE INCOME TAX PROVISION 7,509,449 5,430,384 3,654,579 INCOME TAX PROVISION (1,267,025 ) (820,931 ) (556,262 ) NET INCOME 6,242,424 4,609,453 3,098,317 Less: net income attributable to non-controlling interest 4,936 18,650 71,644 NET INCOME ATTRIBUTABLE TO BON NATURAL LIFE LIMITED $ 6,237,488 $ 4,590,803 $ 3,026,673 OTHER COMPREHENSIVE INCOME (LOSS) Total foreign currency translation adjustment (2,855,701 ) 612,806 450,234 TOTAL COMPREHENSIVE INCOME 3,386,723 5,222,259 3,548,551 Less: comprehensive income attributable to non-controlling interest 2,627 21,133 81,737 COMPREHENSIVE INCOME ATTRIBUTABLE TO BON NATURAL LIFE LIMITED $ 3,384,096 $ 5,201,126 $ 3,466,814 EARNINGS PER SHARE Basic $ 0.75 $ 0.69 $ 0.58 Diluted $ 0.74 $ 0.68 $ 0.58 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING Basic 8,360,774 6,615,833 5,210,649 Diluted 8,396,064 6,706,235 5,210,649
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Years Ended September 30, 2022 2021 2020 Cash flows from operating activities Net income $ 6,242,424 $ 4,609,453 $ 3,098,317 Adjustments to reconcile net income to cash provided (used in) by operating activities Allowance for doubtful accounts 116 2,948 22,137 Depreciation and amortization 218,526 228,547 230,597 Inventory reserve (recovery) reverse (138,354 ) (312,532 ) 29,539 Deferred income tax 19,012 29,109 (7,751 ) Amortization of operating lease right-of-use assets 150,978 58,147 - Amortization of stock-based compensation 170,883 44,910 - Unrealized foreign currency exchange loss (gain) (18,831 ) 45,124 248 Gain on disposal of property and equipment (725 ) - (20,150 ) Changes in operating assets and liabilities: Accounts receivable (1,300,942 ) (89,543 ) (284,546 ) Inventories (157,709 ) (209,011 ) 1,636,321 Advance to suppliers, net (407,022 ) (399,262 ) (3,021,739 ) Prepaid expenses and other current assets (265,446 ) 2,642 72,116 Accounts payable (141,927 ) (969,414 ) (1,982,205 ) Operating lease liabilities (147,812 ) (49,648 ) - Taxes payable (3,632,922 ) 410,716 2,662,542 Deferred revenue (875,295 ) 684,030 161,045 Accrued expenses and other current liabilities 97,925 (33,092 ) 46,605 Net cash (used in) provided by operating activities (187,121 ) 4,053,124 2,643,076 Cash flows from investing activities Purchase of short-term investments (5,097,816 ) (2,159,920 ) - Proceeds upon redemption of short-term investments 6,776,385 470,082 - Purchase of property and equipment (27,695 ) (51,878 ) (31,885 ) Proceeds from sales of property and equipment 1,613 - - Capital expenditures on construction-in-progress (4,708,138 ) (4,432,941 ) (4,301,103 ) Purchase of intangible assets - (269,088 ) - (Payment) refund of acquisition deposit - (1,000,000 ) 1,329,945 Net cash used in investing activities (3,055,651 ) (7,443,745 ) (3,003,043 ) Cash flows from financing activities Net proceeds from issuance of Ordinary Shares in initial public offerings - 11,271,480 - Proceeds from exercise of stock options 140 Proceeds from short-term loans 2,631,890 1,257,225 2,033,570 Proceeds from long-term loans 578,343 1,245,871 319,342 Repayment of short-term loans (40,780 ) (2,563,433 ) (2,872,778 ) Repayment of long-term loans (637,147 ) (2,522,101 ) - (Repayment of) proceeds from borrowings from related parties (96,969 ) (2,262,378 ) 1,067,808 (Repayment of) proceeds from third party loans - (721,484 ) 238,133 (Repayment of) principal from finance lease (173,961 ) 169,153 (392,030 ) Payment for deferred initial public offering costs - (521,651 ) (281,553 ) Net cash provided by financing activities 2,261,516 5,352,682 112,492 Effect of changes of foreign exchange rates on cash (81,750 ) (111,300 ) 6,810 Net (decrease) increase in cash (1,063,006 ) 1,850,761 (240,665 ) Cash, beginning of year 1,903,867 53,106 293,771 Cash, end of year $ 840,861 $ 1,903,867 $ 53,106 Supplemental disclosure of cash flow information Cash paid for interest expense $ 446,884 $ 417,266 $ 276,671 Cash paid for income tax $ 2,290,393 $ 2,411 $ - Supplemental disclosure of non-cash investing and financing activities Amortization of share-based compensation for initial public offering services $ - $ 422,221 $ 211,112 Right-of-use assets obtained in exchange for operating lease obligations $ 546,323 $ 257,564 $ -
