Dogness Reports Fiscal Year 2021 Financial Results
- Revenue Increases 26.9% YoY to $24.3 Million
- 81.4% YoY Increase in Sales of Intelligent Pet Products
- Gross Margin Expands 282.8% YoY to $9.1 Million, with Gross Margin of 33.1% Compared to 9.0% a Year Ago
- Comprehensive Income Increases to $6.2 million from a Loss of $10.3 million a Year Ago
- EPS Grows to $0.05 per Basic and Diluted Share from a Loss of $0.33 per Basic and Diluted Share a Year Ago
DONGGUAN, China, Oct. 29, 2021 /PRNewswire/ -- Dogness (International) Corporation ("Dogness" or the "Company") (NASDAQ:DOGZ), a developer and manufacturer of a comprehensive line of Dogness-branded, OEM and private label pet products, today announced its unaudited financial results for the fiscal year ended June 30, 2021.
Silong Chen, Chairman and Chief Executive Officer of Dogness, commented, "We are pleased with our continued strong growth but know it would have been even stronger if not dampened by the ongoing global logistics crisis. We simply cannot get products fast enough to sell. With that said, we were still able to drive strong growth with a 26.9% increase in revenue for fiscal year 2021 compared to fiscal year 2020. We are even more pleased with our expansion in gross margin and profitability. The quality of our revenue also improved, with a nearly 163% increase in sales volume for our intelligent pet products in fiscal year 2021 compared to fiscal year 2020. We have been prioritizing this important long-term growth opportunity and strategically shifted our resources to produce and promote the sales of higher margin intelligent pet products across our integrated Smart Pet Ecosystem, which includes innovative App-controlled pet feeders, pet water fountains, and smart pet toys."
"We have been working to mitigate the impact of COVID-19 and the supply chain shortages by expanding our sales through popular large retail and online shopping platforms. At the same time, we continue to upgrade our production lines to improve production efficiencies and lower costs. As a result, we were able to reduce our selling price for traditional pet products to help our customers, while still maintaining a healthy profit margin. Overall, our strategy and expanded product lines have been well received by customers worldwide, as reflected in the double-digit growth we achieved in our international sales and the momentum for our intelligent pet products. We are optimistic in our outlook and will continue to execute as we drive revenue and profit growth to build value for shareholders."
Financial Results for the Fiscal Year Ended June 30, 2021
Revenue for the fiscal year ended June 30, 2021 increased 26.9% to $24.3 million from $19.2 million in the fiscal year ended June 30, 2020. The increase in revenue was primarily attributable to an 81.4% expansion in sales of Dogness' intelligent pet products, which are benefitting from high demand and a higher average selling price than the Company's traditional pet products. Dogness has built an integrated sales platform across all channels, with major customers including Anyi Trading, Petco, Trendspark, PetSmart, Pet Value, Walmart, Target, IKEA, SimplyShe, Pets at Home, PETZL, and Petmate, and online shopping platforms, such as Amazon, Chewy.com, Boqii, Target.com, HomeDepot.com, Loews.com, Wayfair.com, JD, Tmall and Taobao, as well as live streaming sales platforms hosted by influencers.
During the fiscal year ended June 30, 2021, Dogness' total sales in international markets increased by approximately $1.2 million or approximately 13% from $10.6 million in fiscal 2020 to approximately $10.6 million in fiscal year 2021.
Cost of revenues decreased by approximately $1.6 million, or 9.6%, from approximately $16.8 million in fiscal 2020 to approximately $15.2 million in fiscal 2021. As a percentage of revenues, the cost of goods sold decreased by approximately 25.1 percentage points to 62.4% in fiscal 2021 from 87.5% in fiscal 2020. This was mainly because the Company continues to upgrade its production lines for both traditional and intelligent pet products to improve the productivity and lower the production costs.
Gross profit increased by approximately $6.8 million or 282.8%, to approximately $9.2 million in fiscal 2021 from approximately $2.4 million in fiscal 2020 primarily because the Company continues to upgrade its production lines for both traditional and intelligent pet products, which led to the improved productivity and lower the production costs. Overall gross profit margin was 37.6%, an increase of 25.1 percentage points, for the year ended June 30, 2021 as compared to 12.5% for the year ended June 30, 2020.
Comprehensive income was approximately $6.2 million or $0.05 per basic and diluted share for the fiscal year ended June 30, 2021, compared to a loss of $10.3 million or a loss of $0.33 per basic and diluted share for the fiscal year ended June 30, 2020.
The Company had a $5.5 million balance of cash and short-term investments as of June 30, 2021. This does not include approximately $4 million in gross proceeds from the Company's offering with institutional investors, which closed on July 19, 2021.
About Dogness
Dogness (International) Corporation was founded in 2003 from the belief that dogs and cats are important, well-loved family members. Through its smart products, hygiene products, health and wellness products, and leash products, Dogness' technology simplifies pet lifestyles and enhances the relationship between pets and pet caregivers. The Company ensures industry-leading quality through its fully integrated vertical supply chain and world-class research and development capabilities, which has resulted in over 200 patents and patents pending. Dogness products reach families worldwide through global chain stores and distributors. For more information, please visit: ir.dogness.com.
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 lingering effects of the Covid-19 pandemic on our customers' businesses and end purchasers' disposable income, our ability to raise capital on any particular terms, fulfillment of customer orders, 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 China and the U.S., our ability to attract and retain highly skilled professionals, client concentration, industry segment concentration, reduced demand for technology in our key focus areas, our ability to successfully complete and integrate potential acquisitions, and unauthorized use of our intellectual property and general economic conditions affecting our industry. Additional risks that could affect our future operating results are more fully described in our United States Securities and Exchange Commission filings. These filings are available at www.sec.gov. Dogness may, from time to time, make additional written and oral forward-looking statements, including statements contained in the Company's filings with the Securities and Exchange Commission and our reports to shareholders. In addition, please note that any forward-looking statements contained herein are based on assumptions that we believe to be reasonable as of the date of this press release. The Company does not undertake to update any forward-looking statements that may be made from time to time by or on behalf of the Company unless it is required by law.
DOGNESS (INTERNATIONAL) CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
For the Years Ended June 30, | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Revenues- third party customers | $ | 23,112,435 | $ | 18,261,707 | $ | 25,887,948 | ||||||
Revenues – related parties | 1,207,686 | 909,651 | 328,567 | |||||||||
Total Revenues | 24,320,121 | 19,171,358 | 26,216,515 | |||||||||
Cost of revenues – third party customers | (14,501,166) | (16,146,856) | (16,583,904) | |||||||||
Cost of revenues – related parties | (663,742) | (633,132) | (202,606) | |||||||||
Total cost of revenues | (15,164,908) | (16,779,988) | (16,786,510) | |||||||||
Gross Profit | 9,155,213 | 2,391,370 | 9,430,005 | |||||||||
Operating expenses: | ||||||||||||
Selling expenses | 1,815,771 | 2,336,229 | 2,101,403 | |||||||||
General and administrative expenses | 4,941,036 | 5,746,812 | 6,015,901 | |||||||||
Research and development expenses | 540,613 | 1,528,062 | 673,131 | |||||||||
Loss from disposal of fixed assets | - | 1,036,304 | - | |||||||||
Impairment of fixed assets | - | 281,680 | - | |||||||||
Impairment loss of investment in equity investees | - | 177,750 | - | |||||||||
Total operating expenses | 7,297,420 | 11,106,837 | 8,790,435 | |||||||||
Income (loss) from operations | 1,857,793 | (8,715,467) | 639,570 | |||||||||
Other income (expenses): | ||||||||||||
Interest income (expense), net | (264,408) | 15,560 | 616,878 | |||||||||
Foreign exchange transaction gain (loss) | (228,260) | 214,171 | 503,528 | |||||||||
Other income (expenses), net | 215,233 | 23,937 | 23,498 | |||||||||
Rental income from related parties | 354,968 | 89,411 | - | |||||||||
Gain from disposition of a subsidiary | 5,162 | - | - | |||||||||
Total other income (expense) | 82,695 | 343,079 | 1,143,904 | |||||||||
Income (loss) before income taxes | 1,940,488 | (8,372,388) | 1,783,474 | |||||||||
Provision for income taxes | 641,460 | 164,537 | 380,296 | |||||||||
Net income (loss) | 1,299,028 | (8,536,925) | 1,403,178 | |||||||||
Less: net loss attributable to noncontrolling interest | (213,336) | (95,366) | (18,603) | |||||||||
Net income (loss) attributable to Dogness (International) | 1,512,364 | (8,441,559) | 1,421,781 | |||||||||
Other comprehensive income (loss): | ||||||||||||
Foreign currency translation income (loss) | 4,879,315 | (1,896,934) | (2,010,170) | |||||||||
Comprehensive income (loss) | 6,178,343 | (10,433,859) | (606,992) | |||||||||
Less: comprehensive loss attributable to noncontrolling interest | (161,701) | (98,635) | (19,224) | |||||||||
Comprehensive income (loss) attributable to Dogness | $ | 6,340,044 | $ | (10,335,224) | $ | (587,768) | ||||||
Income (loss) earnings Per share | ||||||||||||
Basic | $ | 0.05 | $ | (0.33) | $ | 0.05 | ||||||
Diluted | $ | 0.05 | $ | (0.33) | $ | 0.05 | ||||||
Weighted Average Shares Outstanding | ||||||||||||
Basic | 27,499,367 | 25,913,631 | 25,913,631 | |||||||||
Diluted | 27,554,811 | 25,913,631 | 25,941,606 | |||||||||
DOGNESS (INTERNATIONAL) CORPORATION CONSOLIDATED BALANCE SHEETS | ||||||||
2021 | 2020 | |||||||
As of June 30, | ||||||||
2021 | 2020 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash | $ | 4,912,442 | $ | 1,266,873 | ||||
Restricted cash | 23,312 | - | ||||||
Short-term investments | 549,895 | 3,551,968 | ||||||
Accounts receivable from third-party customers, net | 2,367,326 | 1,916,840 | ||||||
Accounts receivable – related parties | 515,193 | 559,465 | ||||||
Inventories, net | 4,203,163 | 2,860,700 | ||||||
Due from related parties | 32,528 | - | ||||||
Prepayments and other current assets | 1,662,272 | 1,471,612 | ||||||
Total current assets | 14,266,131 | 11,627,458 | ||||||
Property, plant and equipment, net | 69,876,039 | 43,533,512 | ||||||
Right-of-use lease assets | 5,170,395 | 5,123,898 | ||||||
Intangible assets, net | 2,223,285 | 2,104,803 | ||||||
Long-term investments in equity investees | 1,703,900 | 1,046,360 | ||||||
Deferred tax assets | 605,658 | 115,230 | ||||||
TOTAL ASSETS | $ | 93,845,408 | $ | 63,551,261 | ||||
LIABILITIES AND EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Short-term bank loans | $ | 704,446 | $ | 5,142,000 | ||||
Current portion of long-term loan | 796,416 | - | ||||||
Accounts payable | 847,151 | 705,223 | ||||||
Accounts payable – related parties | 350,199 | 305,215 | ||||||
Due to a related party | 2,001,940 | 25,462 | ||||||
Advance from customers | 209,508 | 152,299 | ||||||
Taxes payable | 4,443,192 | 2,814,411 | ||||||
Accrued liabilities and other payable | 11,737,680 | 1,452,408 | ||||||
Operating lease liabilities, current | 171,803 | 172,716 | ||||||
Total current liabilities | 21,262,335 | 10,769,734 | ||||||
Long term bank loan | 6,557,608 | 73,300 | ||||||
Operating lease liabilities, non-current | 1,123,060 | 1,200,299 | ||||||
TOTAL LIABILITIES | 28,943,003 | 12,043,333 | ||||||
Commitments | - | - | ||||||
EQUITY | ||||||||
Common stock, $0.002 par value, 100,0000,000 shares authorized, | ||||||||
Class A Common stock | 41,111 | 33,689 | ||||||
Class B Common stock | 18,138 | 18,138 | ||||||
Common stock | ||||||||
Additional paid-in capital | 60,355,278 | 53,221,610 | ||||||
Statutory reserve | 291,443 | 191,716 | ||||||
Retained earnings | 4,628,708 | 3,216,071 | ||||||
Accumulated other comprehensive loss | (960,285) | (5,787,965) | ||||||
Total Dogness (International) Corporation stockholders' equity | 64,374,393 | 50,893,259 | ||||||
Noncontrolling interest | 528,012 | 614,669 | ||||||
Total equity | 64,902,405 | 51,507,928 | ||||||
TOTAL LIABILITIES AND EQUITY | $ | 93,845,408 | $ | 63,551,261 | ||||
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SOURCE Dogness International Corporation