Market Overview

TDH Holdings, Inc. Reports Fiscal Year 2017 Financial Results

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TDH Holdings, Inc. Reports Fiscal Year 2017 Financial Results

PR Newswire

QINGDAO, China, April 30, 2018 /PRNewswire/ – TDH Holdings, Inc. (NASDAQ:PETZ) ("TDH" or the "Company"), a PRC-based company that specializes in the development, manufacturing and sales of various pet food products under multiple established brands in China, Asia and Europe, today announced its audited financial results for the twelve months ended December 31, 2017.

Fiscal Year 2017 Financial Highlights:



For the Twelve Months Ended December 31,

($ millions, except per share data)


2017


2016


% Change

Revenues


$28.98


$24.44


18.6%

Gross profit


$8.30


$7.08


17.3%

Gross margin


28.6%


28.9%


-0.3 pp*

Operating income


$0.27


$1.15


-76.8%

Operating margin


0.9%


4.7%


-3.8 pp*

Net income


$0.12


$1.01


-88.6%

EPS - basic and diluted


$0.01


$0.13


-89.1%








* pp: percentage points







  • Revenues increased by 18.6% to $28.98 million for 2017, with growth in sales across overseas, domestic and E-commerce.
  • Gross profit increased by 17.3% to $8.30 million for 2017 from $7.08 million for 2016.
  • Operating income was $0.27 million for 2017, compared to $1.15 million for 2016. The decrease in operating income was mainly due to the increase in selling, general and administrative expenses that more than offset the increase in gross profit. Selling expense increased due to the increase in e-commerce promotion expenses, e-commerce platform commission, shipping and handling expenses and payroll expenses for marketing personnel, all part of the Company's strategy to expand E-commerce business in the past two years; and general and administrative expense increased primarily due to the increased professional fees related to the IPO and an increase in management compensation.
  • Net income was $0.12 million, or $0.01 per basic and diluted share, for 2017, compared to $1.01 million, or $0.13 per basic and diluted share, for 2016.

Rongfeng Cui, Chairman and Chief Executive Officer of TDH, commented, "With revenues and gross profit increasing by 18.6% and 17.3%, respectively, our 2017 results highlighted steady growth momentum of our business. While the pet food industry in China remained highly fragmented and competitive in 2017, we benefited from a diversified portfolio of over 200 products and balanced sales and distribution channels that included both retail partners and wholesale distributor across overseas, domestic and E-commerce platforms. Innovation and new product launch also played a key role in our sales growth with new products introduced during the year accounted for 74% of sales in 2017."

Fiscal Year 2017 Financial Results

Revenues

The Company generates its revenues from product sales, mainly including sales for pet chews, dried pet snacks and wet canned pet foods. Revenue consists of the invoiced value for the sales, net of value-added tax ("VAT"), business tax, and applicable local government levies. For 2017, revenues increased by $4.54 million, or 18.6%, to $28.98 million from $24.44 million for 2016. The increase in revenues was across overseas, domestic and E-commerce sales. Our sales growth was mainly driven by the growth in sales volume as blended average selling prices for our products had been relatively stable for 2017 and 2016.



For the Twelve Months Ended December 31,



2017



2016



Y/Y Change



Revenues ($'000)


% of Total



Revenues ($'000)


% of Total



Amount ($'000)


%

Overseas

$

21,190


73.1%


$

18,883


77.2%


$

2,307


12.2%

Domestic


2,086


7.2%



1,129


4.6%



957


84.8%

E-commerce


5,734


19.8%



4,462


18.3%



1,273


28.5%

less: sales tax and addition


(31)


-0.1%


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