Highlights for the Fiscal Year Ended June 30, 2022
- 11.5% Revenue Increase YoY
to $27.1 Million
- 73% Increase YoY in Sales of Intelligent Pet
Products
- 100% Increase YoY in Income Per Basic and Diluted
Share
- 241% Increase YoY in Balance of Cash and Short-Term
Investments
PLANO,
Texas, Sept. 30, 2022 /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 audited financial results for the fiscal year ended
June 30 2022.
Silong Chen, Chairman and Chief
Executive Officer of Dogness, commented, "We continue to benefit
from our priority focus of resources on the production and
promotion of sales of our higher margin intelligent pet products.
With both our existing models and the newly launched models of our
smart products, we delivered a 73% increase in sales of our
intelligent pet products in the fiscal year ended June 30, 2022, compared to the year ago period.
We also continue to upgrade our production lines for traditional
pet products to improve the productivity and lower the production
costs. This has allowed us to lower our average unit selling price
for our traditional pet products, while still maintaining desirable
profit margins. Our sales strategy for traditional pet products has
helped us to successfully retain our customers and attract new
customers, which we have leveraged to increase awareness for our
intelligent pet products. To mitigate the impact caused by
COVID-19, we expanded our sales channels to more proven online
shopping platforms, such as Amazon, Chewy, JD, Tmall, Costco.com,
QVC.com and the live streaming sales platforms hosted by
influencers, as well as maintaining the existing online and instore
channels. These ecommerce sales normally have higher profit margin
than traditional sales channels."
"With the continued strong demand and pet culture growth in
China and worldwide, more and more
young consumers have become pet owners. Dogness is well positioned
to benefit from this growth, which is serving as a sales catalyst
for our intelligent pet products, including App-controlled smart
pet food feeders, pet water fountains, pet tracking devices and
smart pet toys. In addition, our sales and distribution channel has
been further diversified due to the rapid change of technology and
lifestyle. Younger generations are more tech savvy and more willing
to purchase products from popular online shopping sites, including
Amazon, Chewy, JD, Tmall and Taobao, and from live streaming sales
platforms hosted by influencers. As a result, we strategically
increased our marketing activities and sales efforts in the
domestic market, especially on those online shopping sites and
channels."
"As we look forward we are even more excited about our growth
potential led by our continued development of innovative,
differentiated pet products and services, which allow us to build
strong relationships with our customers, build brand loyalty,
enhance our market position, increase transaction size and further
enhance operating margins. Taken together, we believe Dogness is on
track to further improve our sales, profitability and return on
investment for our stockholders in the near future."
Financial Results for the Fiscal Year Ended June 30, 2022
Revenues increased by approximately $2.8
million, or 11.5%, to
approximately $27.1 million for the
year ended June 30, 2022, compared to
$24.3 million in the year ended
June 30, 2021. The increase in
revenue was primarily attributable to the increased sales of the
Company's intelligent pet products, which have much higher average
selling price than our traditional pet products.
Revenue from the Company's intelligent pet products increased by
approximately $5.7 million or 73.0%,
from approximately $7.8 million in
fiscal 2021 to approximately $13.5
million in fiscal 2022, primarily reflecting a higher
selling price and increased sales
volume. Revenue from traditional pet products decreased by
approximately $2.9 million or 20.2%
from approximately $14.3 million in
fiscal 2021 to approximately $11.4
million in fiscal 2022, primarily reflecting a decreased
average selling price per unit.
Total sales in international markets increased by approximately
$3.9 million or 36.8% to $14.5 million in the year ended June 30, 2022 from approximately $10.6 million in the year ago period. Domestic
sales decreased by approximately $1.1
million or 8.3% from approximately $13.7 million in the year ended June 30, 2021 to approximately $12.6 million in the year ended June 30, 2022. The Company has seen a sharp
increase in consumer demand in the U.S., Australia, Japan and other Asian countries because of the
stimulus plan and the strong recovery of the economy. Sales to the
U.S. increased by approximately $2.0
million or 32.4% to approximately $8.0 million in the year ended June 30, 2022 from approximately $6.0 million for the year ended June 30, 2021. Sales to Japan and other Asian countries and regions
market increased by approximately $1.7
million or 131.0% to approximately $3.0 million for the year ended June 30, 2022 from approximately $1.3 million for fiscal 2021.
Cost of revenues increased by approximately $1.8 million, or 11.8%, from approximately
$15.2 million in the year ended
June 30, 2021 to approximately
$17.0 million in the year ended
June 30, 2022.
Gross profit increased by approximately $1.0 million or 10.7%, to approximately
$10.1 million in the year ended
June 30, 2022 from approximately
$9.2 million in the year ago period
due to the continued upgrading of the Company's production lines
for both traditional and intelligent pet products, which led to
improved productivity and lower production costs. Overall gross
profit margin was 37.4% for the year ended June 30, 2022, as compared to 37.6% for the year
ended June 30, 2020.
Net income attributable to Dogness increased to $3.2 million or $0.10 per basic and diluted share for the year
ended June 30, 2022 , compared to
$1.5 million or $0.05 per basic and diluted share for the year
ended June 30, 2021. The Company
recognized a $3.2 million foreign
currency translation loss for the year ended June 30, 2022, compared to a gain of $4.9 million in the year ago period.
The Company had a balance of cash and short-term investments of
approximately $16.7 million as of
June 30, 2022, compared to
approximately $4.9 million as of
June 30, 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)
|
|
|
|
2022
|
|
|
2021
|
|
|
2020
|
|
|
|
For the Years Ended
June 30,
|
|
|
|
2022
|
|
|
2021
|
|
|
2020
|
|
|
|
|
|
|
|
|
|
|
|
Revenues- third
party customers
|
|
$
|
24,882,618
|
|
|
$
|
23,112,435
|
|
|
$
|
18,261,707
|
|
Revenues – related
parties
|
|
|
2,212,579
|
|
|
|
1,207,686
|
|
|
|
909,651
|
|
Total
Revenues
|
|
|
27,095,197
|
|
|
|
24,320,121
|
|
|
|
19,171,358
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues –
third party customers
|
|
|
(15,654,952)
|
|
|
|
(14,501,166)
|
|
|
|
(16,146,856)
|
|
Cost of revenues –
related parties
|
|
|
(1,301,180)
|
|
|
|
(663,742)
|
|
|
|
(633,132)
|
|
Total cost of
revenues
|
|
|
(16,956,132)
|
|
|
|
(15,164,908)
|
|
|
|
(16,779,988)
|
|
Gross
Profit
|
|
|
10,139,065
|
|
|
|
9,155,213
|
|
|
|
2,391,370
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
2,077,174
|
|
|
|
1,815,771
|
|
|
|
2,336,229
|
|
General and
administrative expenses
|
|
|
6,742,687
|
|
|
|
4,941,036
|
|
|
|
5,746,812
|
|
Research and
development expenses
|
|
|
917,227
|
|
|
|
540,613
|
|
|
|
1,528,062
|
|
Loss from disposal of
property, plant and equipment
|
|
|
327,921
|
|
|
|
-
|
|
|
|
1,036,304
|
|
Impairment of fixed
assets
|
|
|
-
|
|
|
|
-
|
|
|
|
281,680
|
|
Impairment loss of
investment in equity investees
|
|
|
-
|
|
|
|
-
|
|
|
|
177,750
|
|
Total operating
expenses
|
|
|
10,065,009
|
|
|
|
7,297,420
|
|
|
|
11,106,837
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
operations
|
|
|
74,056
|
|
|
|
1,857,793
|
|
|
|
(8,715,467)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
income:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income
(expense), net
|
|
|
(370,108)
|
|
|
|
(264,408)
|
|
|
|
15,560
|
|
Foreign exchange
transaction gain (loss)
|
|
|
246,211
|
|
|
|
(228,260)
|
|
|
|
214,171
|
|
Other income,
net
|
|
|
115,016
|
|
|
|
215,233
|
|
|
|
23,937
|
|
Rental income from
related parties, net
|
|
|
173,089
|
|
|
|
354,968
|
|
|
|
89,411
|
|
Gain from disposition
of a subsidiary
|
|
|
-
|
|
|
|
5,162
|
|
|
|
-
|
|
Total other
income
|
|
|
164,208
|
|
|
|
82,695
|
|
|
|
343,079
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income taxes
|
|
|
238,264
|
|
|
|
1,940,488
|
|
|
|
(8,372,388)
|
|
Income taxes benefit
(expense)
|
|
|
(2,777,868)
|
|
|
|
641,460
|
|
|
|
164,537
|
|
Net income
(loss)
|
|
|
3,016,132
|
|
|
|
1,299,028
|
|
|
|
(8,536,925)
|
|
Less: net loss
attributable to non-controlling interest
|
|
|
(219,427)
|
|
|
|
(213,336)
|
|
|
|
(95,366)
|
|
Net income (loss)
attributable to Dogness (International) Corporation
|
|
|
3,235,559
|
|
|
|
1,512,364
|
|
|
|
(8,441,559)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income (loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation income (loss)
|
|
|
(3,203,448)
|
|
|
|
4,879,315
|
|
|
|
(1,896,934)
|
|
Comprehensive income
(loss)
|
|
|
(187,316)
|
|
|
|
6,178,343
|
|
|
|
(10,433,859)
|
|
Less: comprehensive
loss attributable to non-controlling interest
|
|
|
(230,583)
|
|
|
|
(161,701)
|
|
|
|
(98,635)
|
|
Comprehensive income
(loss) attributable to Dogness (International)
Corporation
|
|
$
|
43,267
|
|
|
$
|
6,340,044
|
|
|
$
|
(10,335,224)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss)
earnings per share
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.10
|
|
|
$
|
0.05
|
|
|
$
|
(0.33)
|
|
Diluted
|
|
$
|
0.10
|
|
|
$
|
0.05
|
|
|
$
|
(0.33)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average
Shares Outstanding
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
33,711,659
|
|
|
|
27,499,367
|
|
|
|
25,913,631
|
|
Diluted
|
|
|
34,013,634
|
|
|
|
27,554,811
|
|
|
|
25,913,631
|
|
DOGNESS
(INTERNATIONAL) CORPORATION
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
As of June
30,
|
|
|
As of June
30,
|
|
|
|
2022
|
|
|
2021
|
|
ASSETS
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
16,605,872
|
|
|
$
|
4,912,442
|
|
Restricted
cash
|
|
|
-
|
|
|
|
23,312
|
|
Short-term
investments
|
|
|
52,255
|
|
|
|
549,895
|
|
Accounts receivable
from third-party customers, net
|
|
|
1,649,169
|
|
|
|
2,367,326
|
|
Accounts receivable
from related parties
|
|
|
1,094,855
|
|
|
|
515,193
|
|
Inventories,
net
|
|
|
3,369,885
|
|
|
|
4,203,163
|
|
Due from related
parties
|
|
|
105,403
|
|
|
|
32,528
|
|
Prepayments and other
current assets
|
|
|
477,237
|
|
|
|
1,662,272
|
|
Total current
assets
|
|
|
23,354,676
|
|
|
|
14,266,131
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
|
|
68,447,612
|
|
|
|
69,876,039
|
|
Right-of-use lease
assets
|
|
|
4,589,678
|
|
|
|
5,170,395
|
|
Intangible assets,
net
|
|
|
2,063,417
|
|
|
|
2,223,285
|
|
Long-term investments
in equity investees
|
|
|
1,642,300
|
|
|
|
1,703,900
|
|
Deferred tax
assets
|
|
|
699,039
|
|
|
|
605,658
|
|
Total non-current
assets
|
|
|
77,442,046
|
|
|
|
79,579,277
|
|
TOTAL
ASSETS
|
|
$
|
100,796,722
|
|
|
$
|
93,845,408
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Short-term bank
loans
|
|
$
|
564,000
|
|
|
|
704,446
|
|
Current portion of long
term bank loans
|
|
|
1,386,160
|
|
|
|
796,416
|
|
Accounts
payable
|
|
|
1,033,476
|
|
|
|
847,151
|
|
Accounts payable –
related parties
|
|
|
393,625
|
|
|
|
350,199
|
|
Due to related
parties
|
|
|
130,468
|
|
|
|
2,001,940
|
|
Advances from
customers
|
|
|
151,462
|
|
|
|
209,508
|
|
Taxes
payable
|
|
|
1,557,661
|
|
|
|
4,443,192
|
|
Accrued expenses and
other current liabilities
|
|
|
1,083,469
|
|
|
|
11,737,680
|
|
Operating lease
liabilities, current
|
|
|
184,700
|
|
|
|
171,803
|
|
Total current
liabilities
|
|
|
6,485,021
|
|
|
|
21,262,335
|
|
|
|
|
|
|
|
|
|
|
NON-CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Long term bank
loans
|
|
|
4,934,374
|
|
|
|
6,557,608
|
|
Operating lease
liabilities, non-current
|
|
|
901,351
|
|
|
|
1,123,060
|
|
Total non-current
liabilities
|
|
|
5,835,725
|
|
|
|
7,680,668
|
|
TOTAL
LIABILITIES
|
|
$
|
12,320,746
|
|
|
$
|
28,943,003
|
|
|
|
|
|
|
|
|
|
|
Commitments and
Contingencies
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
EQUITY
|
|
|
|
|
|
|
|
|
Common shares, $0.002
par value, 100,000,000 shares authorized 39,274,259 and
29,624,814 issued and
outstanding as of June 30, 2022 and 2021, respectively
|
|
|
|
|
|
|
|
|
Class A Common
shares
|
|
|
60,410
|
|
|
|
41,111
|
|
Class B Common
shares
|
|
|
18,138
|
|
|
|
18,138
|
|
|
|
|
|
|
|
|
|
|
Additional paid-in
capital
|
|
|
84,096,866
|
|
|
|
60,355,278
|
|
Statutory
reserve
|
|
|
291,443
|
|
|
|
291,443
|
|
Retained
earnings
|
|
|
7,864,267
|
|
|
|
4,628,708
|
|
Accumulated other
comprehensive loss
|
|
|
(4,152,577)
|
|
|
|
(960,285)
|
|
Equity attributable
to owners of the Company
|
|
|
88,178,547
|
|
|
|
64,374,393
|
|
|
|
|
|
|
|
|
|
|
Non-controlling
interest
|
|
|
297,429
|
|
|
|
528,012
|
|
Total
equity
|
|
|
88,475,976
|
|
|
|
64,902,405
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND EQUITY
|
|
$
|
100,796,722
|
|
|
$
|
93,845,408
|
|
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SOURCE Dogness International Corporation