Financial Position - As of September 30, 2020, Huadi International Group Co., Ltd. had total assets of $69,123,370, a slight increase from $68,773,494 in 2019, representing a growth of approximately 0.51%[17] - The company reported total liabilities of $43,334,670 as of September 30, 2020, down from $47,566,394 in 2019, indicating a reduction of about 8.3%[17] - Shareholders' equity increased to $25,788,700 in 2020 from $21,207,100 in 2019, reflecting a growth of approximately 21.5%[17] - The accumulated deficit decreased significantly from $(3,481,925) in 2019 to $(159,189) in 2020, showing an improvement in financial health[17] - Cash and cash equivalents were reported at $796,794, down from $1,057,992 in 2019, a decline of about 24.6%[17] - Accounts receivable decreased slightly from $14,001,714 in 2019 to $13,618,697 in 2020, a reduction of approximately 2.7%[17] - The company had inventories valued at $20,837,594 as of September 30, 2020, an increase from $17,845,405 in 2019, representing a growth of about 16.7%[17] Revenue and Profitability - Total sales for 2020 were $57,767,081, a decrease of 12% from $65,518,316 in 2019[20] - Gross profit for 2020 was $10,664,217, down 27% from $14,622,672 in 2019[20] - Operating income decreased to $4,460,585 in 2020, a decline of 47% compared to $8,378,504 in 2019[20] - Net income for 2020 was $3,356,299, representing a 38% decrease from $5,446,487 in 2019[20] - Total comprehensive income for 2020 was $4,581,600, slightly down from $4,588,608 in 2019[20] - Total revenue decreased by approximately $6.4 million in fiscal year 2020 compared to fiscal year 2019, with international sales dropping from $17.9 million to $11.9 million, a 34% reduction[43] Expenses and Costs - Research and development expenses increased to $2,120,649 in 2020, up 19% from $1,777,110 in 2019[20] - Total operating expenses for 2020 were $6,203,632, a marginal decrease from $6,244,168 in 2019[20] - Advertising costs for the years ended September 30 were $104,933 in 2020, $147,363 in 2019, and $105,734 in 2018, indicating a decrease of 29% from 2019 to 2020[79] Cash Flow and Financing - Net cash provided by operating activities increased to $3,204,290 in 2020 from $2,346,607 in 2019, representing a 36.5% increase[29] - Cash and cash equivalents at the end of the year decreased to $1,705,204 from $3,016,672 in 2019, a decline of 43.4%[29] - Purchases of property, plant, and equipment amounted to $664,996 in 2020, down from $912,702 in 2019[29] - Proceeds from short-term borrowings were $38,620,077 in 2020, slightly down from $39,715,044 in 2019[29] - The company was able to repay all debt and obligations during the year ended September 30, 2020, without utilizing any payment deferral or forbearance[46] Impact of COVID-19 - The workforce remained stable throughout fiscal year 2020, but increased operational costs were incurred due to safety measures related to COVID-19[45] - The company experienced supply chain disruptions during the COVID-19 pandemic, leading to increased lead times and purchase prices for raw materials[45] - The impact of COVID-19 resulted in a temporary closure of offices and production facilities, with operations fully resuming by February 18, 2020[43] Shareholder Information - The Company is authorized to issue 250,000,000 ordinary shares, with 10,000,000 shares currently issued and outstanding as of September 30, 2020[137] - A reverse stock split was approved on October 9, 2020, reducing the number of authorized shares from 500,000,000 to 250,000,000[151] - The company completed an IPO on January 26, 2021, raising approximately $25 million from the sale of 3,125,000 shares at $8.00 per share[153] Taxation and Compliance - Current income tax expense for 2020 was $218,949, down 69.0% from $709,027 in 2019[144] - Total income tax expense for 2020 was $218,949, compared to $1,005,190 in 2019, reflecting a significant reduction[144] - The Company did not incur any interest and penalties related to potential underpaid income tax expenses for the fiscal years ended September 30, 2020, and 2019[141] Investments and Assets - The carrying value of long-term investments was $13,449,305 and $12,775,494 as of September 30, 2020, and 2019, respectively[64] - Long-term investments totaled $13,449,305 as of September 30, 2020, with significant holdings in Huashang Micro Finance Co. and Longwan Rural Commercial Bank[107] - The Company invested RMB 44,982,000 ($7,172,207) to acquire a 2.1% stake in Longwan Rural Commercial Bank (LRCB) in 2012, receiving dividend income of RMB 3,087,000 ($440,647) in 2020, down from RMB 3,307,500 ($481,070) in 2019[111] Customer and Supplier Relationships - The Company had no significant customers in 2020, but two customers accounted for 26.31% of total accounts receivable[120] - In the year ended September 30, 2020, three suppliers accounted for 32.05%, 16.60%, and 11.16% of total purchases, with these suppliers combined representing 63.47% of total accounts payable[122] - The Company purchased $14,521,129 in raw materials from Taizhou Huadi during the year ended September 30, 2020, with an outstanding balance of $5,342,512 as of the same date[126]
Huadi International Group(HUDI) - 2020 Q4 - Annual Report