Financial Performance - Revenues for the three months ended March 31, 2025, were $3,123,000, a decrease of 38.4% compared to $5,071,000 for the same period in 2024[102] - Gross profit for the 2025 Quarter was a loss of $179,000, compared to a profit of $1,329,000 in the 2024 Quarter, representing a decline of 113.5%[102] - Loss from continuing operations increased to $1,822,000 in the 2025 Quarter, compared to a loss of $627,000 in the 2024 Quarter, marking a 190.6% increase[107] - For the six months ended March 31, 2025, revenues were $7,747,000, down 24.1% from $10,213,000 in the same period in 2024[108] - The company incurred a goodwill impairment charge of $225,000 in the 2025 Period, which was not present in the 2024 Period[108] - The company generated a loss from continuing operations of $2,720,000 in the 2025 Period compared to a loss of $992,000 in the 2024 Period, with basic and diluted loss per share from continuing operations at $2.47 and $0.90, respectively[114] - The company had an accumulated deficit of $21,797,000 and a net loss of $2,160,000 for the six months ended March 31, 2025[119] Revenue Decline Factors - The decline in revenues is primarily attributed to the loss of a major customer in December 2024, which is expected to continue impacting revenues in fiscal 2025[103] - Revenue from the largest design customer, which represented over 30% of consolidated net revenues in fiscal 2024, is expected to cause a material decrease in revenues in fiscal 2025[120] Cost Management - Sales and marketing expenses decreased to $148,000 in the 2025 Quarter, down 28.2% from $206,000 in the 2024 Quarter[102] - General and administrative expenses decreased to $1,495,000 in the 2025 Quarter, a reduction of 14.3% from $1,744,000 in the 2024 Quarter[102] Gross Margin and Profitability - The gross profit margin declined from 26.2% in the 2024 Quarter to (5.7%) in the 2025 Quarter, driven by lower staff utilization rates[104] - Gross margin decreased from 27.1% in the 2024 Period to 12.3% in the 2025 Period, primarily due to lower staff utilization rates, partially offset by an increase in the average bill rate[110] Working Capital and Cash Flow - Working capital decreased to $2,784,000 at March 31, 2025, down from $4,663,000 at September 30, 2024, primarily due to lower cash and accounts receivable balances[115] - Cash used in operating activities was $972,000 during the 2025 Period, resulting from a net loss of $2,160,000 and a decrease in accounts receivable of $912,000[123] - Cash used in investing activities was $7,000 in the 2025 Quarter, primarily for purchases of property and equipment[125] Strategic Initiatives - The company plans to sell its OEM segment, which is classified as assets and liabilities held for sale as of March 31, 2025[92] - The company is in preliminary discussions regarding a potential sale of equity securities and establishment of an equity line of credit facility with an institutional investor[118] Debt and Financial Obligations - Forward China holds a $1,600,000 promissory note, with an outstanding balance reduced to $600,000 following principal payments totaling $1,000,000 made through March 31, 2025[116]
Forward Industries(FORD) - 2025 Q2 - Quarterly Report