BON Bon Natural Life Ltd

1H-2022 Revenue increases by 17.0% to $13.7 million

XI'AN, China, Aug. 1, 2022 /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, 2022.

1H-2022 Financial Highlights

• Total net revenues were US$13.7 million, representing a 17.0% increase from US$11.7 million for the same period in 2021.
• Gross profit increased by 19.6% to US$4.0 million from US$3.4 million for the same period in 2021.
• Gross margin was 29.5%, an increase by 70 basis points from 28.8% for the same period in 2021, and an increase by 2.4% sequentially compared to that of the six months ended September 30, 2021.
• Sales volumes and gross profit of our bioactive food ingredient products increased by 47.5% and 191.1% compared to the same period of 2021.
• Net income increased by 10.2% to US$2.5 million from US$2.3 million for the same period in 2021.
• Diluted earnings per share ("EPS") was $0.30, compared to $0.40 for the same period in 2021.
• Diluted weighted-average number of ordinary shares outstanding increased to 8,386,306 from 5,800,000 for the same period in 2021 due to more shares issued in connection with IPO.

Management Commentary

"We are pleased with a strong start to 2022 and a positive momentum across many of our new initiatives despite unprecedented challenges caused by the pandemic and the most recent macro-economic conditions." Said Richard (Yongwei) Hu, BON's Chairman & CEO, "I am incredibly proud of our teams' achievements to adapt these conditions and help offset pressures over time by our pricing actions, in combination with our continuing cost discipline and market strategy adjustment. In the first six months of the current fiscal year, the average selling prices of fragrance compound, health supplemental powder drinks and bioactive food ingredients increased by 64.1%, 11.2% and 79.2% year over year, respectively, as we effectively passed through the rising raw material costs downstream by raising our selling prices on top of our product mix shift to higher value added and higher margin products. We are encouraged by the positive trending of our gross margin, which has been on a stable upward trajectory and expanded 2.4% sequentially."

"We are excited about the multiple near term catalysts ahead of us. In this fiscal half year, we kept investing in our future and our third production base, Yumen plant is on track to complete construction as scheduled and expected to be operational in the fourth quarter of 2022. Once up and running, Yumen plant will add 200% increase in production capacity in fragrance compounds and bioactive food ingredients and 150% overall revenue growth potential on an annualized basis. In addition, with the successful rollout of our new proprietary vegetable based probiotic powder drink for regulation and improvement of human's overall microbiome and digestive health, stachyose and apple extract based personal care product for female hygiene health, we are expecting growing demand from natural and health -conscious consumers. Our new Yumen Plant and the expansion of Tongchuan plant, coupled with our new product initiatives will enable us to meet more customer demand efficiently, accelerate our global business expansion and deliver lasting long-term value for our shareholders."

1H-2022 Product Categories Summary: Growth vs. Prior Year

Fragrance Compounds

Revenue from sales of fragrance compound products increased by 24.9% to US$7.4 million from US$6.0 million for the same period in 2021. The increase was primarily attributable to a 64.1% increase in average selling price driven by our product mix shift towards higher value added and higher margin products, such as ambroxide, a key ingredient of fragrance, as well as a 2.8% positive impact from currency exchange, partially offset by a decrease of 26.0% in sales volume due to shortage of material supply.

Gross profit from fragrance compound increased by 53.9% from US$1.2 million to US$1.8 million for the same period in 2021. The increase was attributable to the above referenced factors.

Health Supplements (Powder Drinks)

Revenue from sales of health supplement (powder drinks) products decreased by 28.5% to US$3.3 million from US$4.7 million for the same period in 2021. The decrease was primarily attributable to the decrease in sales volume due to material supply shortage, partially offset by increase in average selling price and positive impact from currency exchange.

Gross profit from health supplement (powder drinks) decreased by 36.4% from US$1.8 million to US$1.2 million for the same period in 2021. The decrease was mainly due to the decrease in sales volume and increase in weighted average unit cost, partially offset by positive impact from currency exchange.

Bioactive Food Ingredients

Revenue from sales of bioactive food ingredient products increased by 171.8% to US$2.9 million from US$1.1 million for the same period in 2021. The increase was mainly attributable to 79.2% and 47.5% increase in average selling price and sales volume due to strong customer demand and sales effort as well as a 2.8% positive impact from currency exchange.

Gross profit of our bioactive food ingredient products increased by 191.1% to $1.1 million from $365,867 for the same period in 2021. This increase was primarily due to the above referenced factors.

General and administrative expenses increased by $319,308, or approximately 47.0%, from $679,635 in the six months ended March 31, 2021, to $998,943 in the same period of 2022, mainly attributable to increase of $335,265 in professional service fees such as directors' and officers' liability insurance, investor relations management, etc. as we become a public company since we completed the IPO in July 2021.

Research and development ("R&D") expenses increased by $57,677, or approximately 53.9%, from $106,998 in the six months ended March 31, 2021, to $164,675 in the same period of 2022. The increase was mainly due to an increase of $69,022 in outsourcing R&D activities to external consulting firms.

Government subsidies received in the form of a grant and recognized as other operating income totaled $542,256 and $446,910 in the six months ended March 31, 2022 and 2021, respectively.

Net income increased from $2.3 million in the six months ended March 31, 2021 to $2.5 million in the same period of 2022.

Net cash used in operating activities during the six months ended March 31, 2022 was $130,577 compared to net cash provided in operating activities of $2.0 million in the same period of 2021.

Diluted earnings per share ("EPS") was $0.30, compared to $0.40 for the same period in 2021.

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 May 5, 2022, the Company announced that its third production site – Yumen Plant has completed the building structure of the facility as scheduled and forecasted to commence around September 2022.

On June 16, 2022, the Company launched a new cruciferous vegetable based probiotic powder drink that could help regulate digestive system.

Effective June 28, 2022, Jeffery Guzy was appointed as a new independent Director to the Company's Board of Directors and as Chair of the Audit Committee. Mr. Christopher Constable resigned as a director of the Company for personal reasons and stepped down as a member and chairman of the audit committee of the Board.

Investor Conference Call and Webcast

A live webcast to discuss the Company's 1H 2022 financial results will be held on August 1, 2022, beginning at 9:00 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://event.choruscall.com/mediaframe/webcast.html?webcastid=1sM1QUxQ

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/10169993/f3e46b2118

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.

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SOURCE Bon Natural Life Limited