Bon Natural Life Limited Announces Record First Half-Year Revenue and Net Income

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-1H-2021 Revenue increases by 63.6% to $11.7 million

XI’AN, China, Aug. 17, 2021 /PRNewswire/ — Bon Natural Life Limited (Nasdaq: BON) (“BON” or the “Company”), one of the leading bio-ingredient solutions providers in the natural, health and personal care industries, today announced its half-year financial results for the six months ended March 31, 2021.

1H2021 Financial Highlights

  • Total net revenues were US$11.7 million, representing a 63.6% increase from US$7.1 million for the same period in 2020.
  • Gross profit increased by 32.2% to US$3.4 million from US$2.6 million for the same period in 2020.
  • Net income increased by 43.9% to US$2.30 million from US$1.59 million for the same period in 2020.
  • Diluted earnings per share (“EPS”) was $0.40, compared to $0.30 for the same period in 2020.
  • Cash flow from operations was $2.0 million, compared to $0.5 million for the same period in 2020.

Management Commentary

“The accelerating growth in our record revenue and earnings is a great way to mark our first reported results as a public company and creates a solid foundation for us to build upon,” Said Richard Hu, BON’s Chairman & CEO, “Our well-known brand combined with our quality product offering provide a great value proposition to our customers and has positioned us to gain additional market share during this time of increased demand. I am encouraged by the pace of our new business wins this year as well as the robust growth of our sales pipeline. We will continue to optimize our sales strategy to shift to larger enterprise clients and to lower our manufacturing cost to support sustainable long-term profitability. I want to recognize our hardworking team for their tireless efforts and thank our loyal customers for their trust in us. The timing of our expansion with the Yumen Plant could not come at a more opportune time.  We are seeing more demand for our products and  this new facility will come online just in time for us to meet our customers’ requirements. We are confident that our technology, business model and strategy would enable us to gain more market share and maintain our growth momentum.”

1H-2021 Product Categories Summary: Growth vs. Prior Year

Revenues increase (decrease)

Gross Profits increase (decrease)

Fragrance Compounds

133.0%

226.9%

Health Supplements (Powder Drinks)

338.4%

306.0%

Bioactive Food Ingredients

(69.7%)

(79.0%)

Fragrance Compounds

  • Revenue from sales of fragrance compound products increased by 133.0% to US$6.0 million from US$2.6 million for the same period in 2020. The increase was primarily attributable to the increase in sales volume and average selling price.
  • Gross profit from fragrance compound increased by 226.9% from US$358.3 thousand to US$1.2 million for the same period in 2020. The increase was attributable to the increase in sales volume, increase in average order size, and average selling price.

Health Supplements (Powder Drinks)

  • Revenue from sales of health supplement (powder drinks) products increased by 338.4% to US$4.7 million from US$1.1 million for the same period in 2020. The increase was attributable to the increase in sales volume.
  • Gross profit from health supplement (powder drinks) increased by 306.0% from US$452.3 thousand to US$1.8 million for the same period in 2020. The increase was primarily due to the increase in sales volume, which is a result of the increased number of customers, partially offset by the increase in average unit cost.

Bioactive Food Ingredients

  • Revenue from sales of bioactive food ingredient products decreased by 69.7% to US$1.1 million from US$3.5 million for the same period in 2020. The decrease was mainly attributable to a decrease in sales volume and average selling price as we received less customer orders of stachyose, our major bioactive food ingredient product, when COVID-19 spread had been subdued in China during six months ended March 31, 2021.
  • Gross profit of our bioactive food ingredient products decreased by 79.0% to $365.9 thousand from $1.7 million for the same period in 2020. This decrease was primarily due to the decrease in sales volume and average selling price for the above referenced reason.

General and administrative expenses decreased by $132,164, or approximately 16.3%, from $811,799 in the six months ended March 31, 2020, to $679,635 in the same period of 2021, mainly attributable to a $197,327 decrease in professional consulting service fees during the six months ended March 31, 2021, as the Company incurred higher consulting service fees and higher audit fees in connection with our IPO in the six months ended March 31, 2020.

Government subsidies received in the form of a grant and recognized as other operating income totaled $446,910 and $332,418 in the six months ended March 31, 2021 and 2020, respectively.

Net income increased from $1.6 million in the six months ended March 31, 2020 to $2.3 million in the same period of 2021.

Net cash provided by operating activities during the six months ended March 31, 2021 was $2.0 million compared to $0.5 million in the same period of 2020.

Diluted earnings per share (“EPS”) was $0.40, compared to $0.30 for the same period in 2020.

Investors are encouraged to review the Company’s complete financial statements and related disclosures for additional information.  These materials are available at https://www.sec.gov/edgar/browse/?CIK=1816815&owner=exclude.

Subsequent Events

  • On July 6, 2021, the Company received the certificate of a land use right for the future site of its third production facility in the city of Yumen, and officially broke ground on construction on July 29th
  • Mr. Hu was a keynote speaker at the WPE-WHPE 2021, the largest natural health industry exhibition in China which was held between July 28th and July 30th in 2021.

Investor Conference Call and Webcast

A live webcast to discuss the Company’s 1H 2021 financial results will be held on August 17, 2021, beginning at 8:30 a.m. EST. The webcast and accompanying slide presentation may be accessed on the Company’s IR website at https://ir.bnlus.com/events-presentations/. The webcast also can be accessed by using the direct link: https://services.choruscall.com/mediaframe/webcast.html?webcastid=WCdGNEV5

For those unable to listen to the live webcast, a recorded version will be available on the Company’s website after the event.

Pre-registration: https://dpregister.com/sreg/10159604/ec6c783af0

Callers who pre-register will be given a conference passcode and unique PIN to gain immediate access to the call and bypass the operator. Participants may pre-register at any time, up to and including after the time that the call has started.

Those without internet access or unable to pre-register may dial in by calling:

U.S. Toll Free: 1-866-777-2509 | International Toll: 1-412-317-5413

About Bon Natural Life Limited

The Company focuses on the manufacturing of personal care ingredients, such as plant extracted fragrance compounds for perfume and fragrance manufacturers, natural health supplements such as powder drinks and bioactive food ingredient products mostly used as food additives and nutritional supplements by their customers. For additional information, please visit the Company’s website at www.bnlus.com.

Safe Harbor Statement

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as “may, “will, “intend,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate” or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company’s expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company’s goals and strategies; the Company’s future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the natural, health and personal care market in China and the other international markets the Company plans to serve; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and the international markets the Company plans to serve and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the SEC. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company’s filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward–looking statements to reflect events or circumstances that arise after the date hereof.

For more information, please contact:

In the United States:                                                      In China:
Maggie Zhang | Impact IR                                             Sophie Zhang | Impact IR
Phone: (646) 893-8916                                                 Email: sophie.zhang@irimpact.com            
Email: maggie.zhang@irimpact.com 

BON NATURAL LIFE LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)

As of

March 31, 2021

September 30, 2020

ASSETS

CURRENT ASSETS

Cash

$

1,040,607

$

53,106

Accounts receivable, net

8,869,747

5,771,008

Inventories, net

1,446,516

1,016,442

Advance to suppliers, net

1,894,359

3,491,145

Deferred initial public offering costs

984,162

510,079

Prepaid expenses and other current assets

106,786

7,434

TOTAL CURRENT ASSETS

14,342,177

10,840,214

Property, plant and equipment, net

14,590,470

14,171,963

Intangible assets, net

144,126

140,993

Right-of-use lease assets, net

229,532

Deferred tax assets, net

37,032

49,059

TOTAL ASSETS

$

29,343,337

$

25,202,229

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES

Short-term loans

$

1,823,215

$

1,289,081

Current portion of long-term loans

2,318,528

1,227,346

Third party loans

690,327

Accounts payable

577,311

1,288,629

Due to related parties

1,019,128

2,322,990

Taxes payable

5,688,786

4,402,625

Accrued expenses and other current liabilities

1,275,936

442,582

Finance lease liabilities, current

148,983

33,389

Operating lease liability, current

57,051

TOTAL CURRENT LIABILITIES

$

12,908,938

$

11,696,969

Long-term loans

2,106,180

2,482,251

Finance lease liabilities, noncurrent

110,499

Operating lease liability, noncurrent

176,701

TOTAL LIABILITIES

15,302,318

14,179,220

COMMITMENTS AND CONTINGENCIES EQUITY

Ordinary shares, $0.0001 par value, 500,000,000 shares authorized,
5,800,000 shares issued and outstanding as of March 31, 2021 and
September 30, 2020 *

$

580

$

580

Additional paid in capital

5,567,873

5,251,205

Statutory reserve

579,922

579,922

Retained earnings

7,384,071

5,072,672

Accumulated other comprehensive income (loss)

15,421

(388,102)

TOTAL BON NATURAL LIFE LIMITED SHAREHOLDERS’
EQUITY

13,547,867

10,516,277

Non-controlling interest

493,152

506,732

Total equity

14,041,019

11,023,009

TOTAL LIABILITIES AND EQUITY

$

29,343,337

$

25,202,229

*Retrospectively restated for effect of 1-for-3 shares reverse split.

BON NATURAL LIFE LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(UNAUDITED)

For the six months ended

March 31,

2021

2020

REVENUE

$

11,698,830

$

7,149,785

COST OF REVENUE

(8,325,148)

(4,597,617)

GROSS PROFIT

3,373,682

2,552,168

OPERATING EXPENSES

Selling expenses

(52,666)

(59,765)

General and administrative expenses

(679,635)

(811,799)

Research and development expenses

(106,998)

(128,481)

Total operating expenses

(839,299)

(1,000,045)

INCOME FROM OPERATIONS

2,534,383

1,552,123

OTHER INCOME (EXPENSES)

Interest income

294

451

Interest expense

(197,168)

(172,913)

Unrealized foreign transaction exchange gain (loss)

(65,691)

(4,300)

Government subsidies

446,910

332,418

Other income

41,548

136,482

Total other income (expenses)

225,893

292,138

INCOME BEFORE INCOME TAX PROVISION

2,760,276

1,844,261

INCOME TAX PROVISION

(465,077)

(249,766)

NET INCOME

2,295,199

1,594,495

Less: net income (loss) attributable to non-controlling interest

(16,200)

61,317

NET INCOME ATTRIBUTABLE TO BON NATURAL LIFE
LIMITED

2,311,399

1,533,178

OTHER COMPREHENSIVE INCOME (LOSS)

Total foreign currency translation adjustment

406,143

32,468

TOTAL COMPREHENSIVE INCOME

2,701,342

1,626,963

Less: comprehensive income (loss) attributable to non-controlling
interest

(13,580)

59,939

COMPREHENSIVE INCOME ATTRIBUTABLE TO BON
NATURAL LIFE LIMITED

$

2,714,922

$

1,567,024

EARNINGS PER SHARE

Basic and diluted

$

0.40

$

0.30

WEIGHTED AVERAGE NUMBER OF SHARES
OUTSTANDING

Basic and diluted*

5,800,000

5,166,667

* Retrospectively restated for effect of reverse split.

BON NATURAL LIFE LIMITED AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the six months ended

March 31,

2021

2020

Cash flows from operating activities

Net income

$

2,295,199

$

1,594,495

Adjustments to reconcile net income to cash provided by operating
activities

Allowance for doubtful accounts

6,323

23,316

Depreciation and amortization

117,888

134,457

Deferred income tax

13,879

(19,459)

Amortization of operating lease right-of-use assets

26,195

Unrealized foreign currency exchange loss

65,691

4,300

Changes in operating assets and liabilities:

Accounts receivable

(2,898,493)

(410,656)

Inventories

(391,958)

482,914

Advance to suppliers

1,738,442

(1,787,999)

Prepaid expenses and other current assets

(99,108)

17,251

Accounts payable

(760,103)

(809,818)

Operating lease liabilities

(21,975)

Taxes payable

1,120,847

905,514

Accrued expenses and other current liabilities

786,942

412,845

Net cash provided by operating activities

1,999,769

547,160

Cash flows from investing activities

Purchase of property and equipment

(715)

(26,957)

Capital expenditures on construction-in-progress

(403,911)

Net cash used in investing activities

(715)

(430,868)

Cash flows from financing activities

Proceeds from short-term loans

943,517

601,833

Proceeds from long-term loans

685,067

41,001

Repayment of short-term loans

(457,729)

(1,211,475)

Repayment of long-term loans

(109,382)

Proceeds from (repayment of) borrowings from related parties

(1,391,813)

393,367

Proceeds from (repayment of) third party loans

(716,574)

76,797

Principal payment from (repayment of) finance lease

254,970

(195,863)

Payment for deferred initial public offering costs

(155,557)

(42,705)

Net cash used in financing activities

(947,501)

(337,045)

Effect of changes of foreign exchange rates on cash

(64,052)

15,605

Net increase (decrease) in cash

987,501

(205,148)

Cash, beginning of year

53,106

293,771

Cash, end of year

$

1,040,607

$

88,623

Supplemental disclosure of cash flow information

Cash paid for interest expense

$

215,268

$

172,913

Cash paid for income tax

$

1,424

$

Supplemental disclosure of non-cash investing and financing activities

Amortization of share-based compensation for initial public offering
services

$

316,668

$

Right-of-use assets obtained in exchange for operating lease
obligations

255,811