Financial Statements and Reporting - The unaudited condensed consolidated financial statements are prepared in accordance with U.S. GAAP and include necessary adjustments for fair presentation[19]. - The Company recognizes revenue from contracts with customers in accordance with ASC Topic 606, reflecting the transfer of goods or services[33]. - Revenue from retail sales is recognized at the point when control of products is transferred to customers, typically upon shipment[40]. - The Company’s export sales revenue is recognized when performance obligations are satisfied, generally upon delivery of goods[44]. - The Company evaluates the terms of agreements to determine whether it acts as a principal or agent in revenue recognition, generally acting as a principal[47]. - The Company adopted the FASB ASU 2016-02 "Leases (Topic 842)" standard, requiring recognition of lease assets and liabilities on the balance sheet for leases over twelve months[54]. - The Company is evaluating the impact of ASU No. 2024-03, which requires enhanced disclosures about costs and expenses in the income statement, effective for annual reporting periods beginning after December 15, 2026[73]. Revenue and Growth - For the six months ended June 30, 2024, total net revenue was $156,312,109, which is projected to increase to $180,774,803 for the same period in 2025, representing a growth of approximately 15.7%[50]. - Export sales accounted for $148,257,093 in revenue for the first half of 2024, expected to rise to $168,009,212 in 2025, indicating a growth of about 13.3%[50]. - Retail sales increased from $2,003,351 in the first half of 2024 to $3,382,273 in 2025, reflecting a significant growth of approximately 68.5%[50]. - Leather trading revenue is projected to grow from $6,051,665 in 2024 to $9,383,318 in 2025, marking an increase of about 55.5%[50]. - For the six months ended June 30, 2025, total net revenues increased to $180,774,803, with retail sales at $3,382,273 and export sales at $168,009,212[84]. - The company reported a segment income of $10,024,075 for the six months ended June 30, 2025, compared to $5,365,616 for the same period in 2024[84]. - The Asia Pacific region generated total revenues of $48,682,985 for the six months ended June 30, 2025, up from $42,860,427 in 2024[84]. Expenses and Profitability - The gross profit for the same period was $41,935,957, resulting in a gross margin of approximately 26.8%[82]. - The gross profit for the six months ended June 30, 2025, was $49,832,545, reflecting a gross margin of approximately 27.6%[84]. - Operating profit for the retail segment was a loss of $752,627, while the export sales segment achieved an operating profit of $8,419,544[83]. - The operating profit for the export sales segment in 2025 was $10,748,250, while the retail segment reported an operating loss of $1,330,878[84]. - Warranty expense for the six months ended June 30, 2024, was $2,769,218, which increased to $4,004,614 in 2025, showing a rise of approximately 44.5%[58]. Assets and Liabilities - As of June 30, 2025, total identifiable long-lived assets amounted to $11,756,316, with property, plant, and equipment netting $4,499,588[86]. - Accounts receivable increased from $66,928,602 as of December 31, 2024, to $71,669,261 as of June 30, 2025, representing a growth of approximately 7.5%[87]. - Total inventories increased from $8,032,089 to $10,613,295, reflecting a significant growth of 32.2%[89]. - Property, plant, and equipment net value increased from $3,734,157 to $4,499,588, a rise of 20.5%[90]. - Short-term borrowings surged from $15,255,874 to $23,382,206, marking a substantial increase of 53.3%[91]. Taxation - The effective income tax rate for both periods presented is 17%, with income before income taxes increasing from $7,003,351 in 2024 to $12,353,347 in 2025, representing a growth of 76.5%[16]. - Current income tax expense for the six months ended June 30, 2025, is $2,465,661, an increase from $1,665,092 in 2024, reflecting a growth of 47.9%[12]. - The income tax expense for the six months ended June 30, 2025, is $2,329,272, up from $1,637,735 in 2024, marking an increase of 42.4%[16]. - The company did not incur any interest and penalties related to potential underpaid income tax expenses for the six months ended June 30, 2024, and 2025[117]. - The company has no significant unrecognized uncertain tax positions as of June 30, 2025[117]. Related Party Transactions - Related party accounts receivable decreased from $928,951 as of December 31, 2024, to $353,886 as of June 30, 2025[120]. - Amounts due from related parties increased significantly from $2,807,854 as of December 31, 2024, to $4,967,733 as of June 30, 2025, indicating a growth of 76.8%[120]. - Accounts payable to related parties decreased from $72,724,799 as of December 31, 2024, to $55,254,469 as of June 30, 2025, a reduction of 24.1%[120]. - The total amount due from related parties was $95,644,019, with a net balance of $4,967,733 after adjustments[124]. - Accounts payable to related parties totaled $130,351,249 as of June 30, 2025, with a net balance of $(55,254,469) after netting off arrangements[124]. Risks and Contingencies - The Company has significant exposure to foreign exchange fluctuations, with more than half of its revenues generated outside Singapore[138]. - The management currently has a foreign currency hedging policy and monitors foreign exchange exposure for potential hedging actions[135]. - The Company is exposed to interest rate risk primarily related to fixed-rate trading financing and has not used derivative instruments to mitigate this risk[136]. - The Company is subject to global economic and political risks, including market volatility and changes in government policies, which can negatively impact net revenues and cash flows[138]. - As of June 30, 2025, the Company did not have any significant commitments and contingencies that could materially affect its financial condition[139]. Shareholder Information - Net income attributable to shareholders increased from $5,365,616 to $10,024,075, representing an impressive growth of 86.5%[112]. - Basic and diluted net income per share improved from $0.06 to $0.11, reflecting a 83.3% increase[112]. - On August 22, 2025, the Company increased its authorized shares from 100,000,000 to 500,000,000 shares[141]. - The company issued 75,000,000 ordinary shares to acquire HTL Marketing, which closed on May 19, 2025[109].
HomesToLife Ltd(HTLM) - 2025 Q2 - Quarterly Report