Rectitude Holdings Ltd Announces Fiscal 2025 First Half Financial Results
SINGAPORE, March 27, 2025 (GLOBE NEWSWIRE) -- Rectitude Holdings Ltd (the "Company" or "Rectitude"), a Singapore-based provider of safety equipment and related industrial-grade hardware products, today announced its unaudited financial results for the six months ended September 30, 2024.
Fiscal 2025 First Half Financial Results Compared to Fiscal 2024 First Half (amounts in U.S. dollars ($) unless otherwise noted):
-- Revenues for the first six months of fiscal 2025 were $17.2 million.
Revenues in Singapore Dollars, increased 7.89% to S$22.1 million, from
S$20.5 million in the prior-year period. Revenue growth was driven by a
S$5.6 million increase in safety equipment revenues, partially offset by
a S$4.0 million decrease in auxiliary product revenues.
-- Gross profit increased to S$7.7 million, from S$7.6 million in the prior
year was primarily due to higher sales volumes and improved efficiencies,
partially offset by pressures from increased procurement costs arising
from customizable products made for customers and newly launched
auxiliary products under the DADE brand.
-- Gross profit margin decreased to 34.74% of revenue, from 36.96% of
revenue in the prior year as a result of the factors noted above.
-- Selling and marketing expenses in Singapore Dollars, increased by S$0.5
million to S$2.5 million, due to opening of new branches and their
associated operating costs.
-- General and administrative expenses in Singapore Dollars, increased by
S$0.9 million to S$3.8 million due to increased costs associated with the
Company's initial public offering as well as ongoing public company
costs.
-- Net income was $0.9 million, or $0.06 per diluted share, for the fiscal
first half ended September 30, 2024. In Singapore Dollars, net income was
S$1.1 million, or S$0.08 per diluted share, for the fiscal first half
ended September 30, 2024, compared to net income of S$2.1 million, or
S$0.17 per diluted share, for the fiscal first half ended September 30,
2023.
-- Adjusted EBITDA for the fiscal first half ended September 30, 2024, was
$2.4 million. In Singapore Dollars, Adjusted EBITDA decreased slightly to
S$3.2 million, compared to S$3.4 million in the prior year period.
"The first six months of the fiscal year have marked by continued innovation for the Company as we seek to meet the evolving needs of our customers. As we continue to invest in developing new products, we are opening the door to new markets and an expanded customer relationships," said Mr. Jian Zhang, Chairman, Chief Executive Officer, and Executive Director at Rectitude. "The tenacity and dedication of all our employees is evident in our continued revenue growth and customer satisfaction. As we look to the future, we are inspired by the opportunities ahead of us and how those affect our total addressable market. Continued investment in the Company, along with increasing our strategic presence across Singapore and Southeast Asia will strengthen our position in the market and enable Rectitude to maximize our shareholder value."
Revenues
For the fiscal first half ended September 30, 2024, total revenues were $17.2 million. In Singapore Dollars, revenues were S$22.1 million and S$20.5 for the respective fiscal first half's ended September 30, 2024 and 2023. The increase was primarily driven by stronger customer demand for safety equipment given the increased construction activity within the Company's markets, partial offset by a decrease in auxiliary product revenues.
Cost of Revenues
For the fiscal first half ended September 30, 2024, cost of revenues was $11.2 million. In Singapore Dollars, for the fiscal first half ended September 30, 2024 and 2023, cost of revenues were S$14.4 million and S$12.9 million, respectively. The increase in cost of revenue was consistent with the increase of revenue during the year, however, procurement costs have increased, rising from customizable products made for customers and newly launched auxiliary products embodying the Company's DADE brand.
Gross profit and Gross profit margin
Gross profit for the fiscal first half ended September 30, 2024, was $6.0 million, representing 34.74% of operating revenues. In Singapore Dollars, gross profit for the fiscal first half ended September 30, 2024 and 2023 was S$7.7 million and $7.6 million, representing 34.74% and 36.96% of operating revenues, respectively. The increase in gross profit was mainly due to higher sales volumes. The decrease in gross profit margin is mainly due to higher sales volumes offset by pressures from the increase in procurement costs arising from customizable products made for customers and newly launched auxiliary products under the DADE brand.
Selling and marketing expenses
Selling and marketing expenses primarily included expenses related to advertising and marketing activities and associated costs of our retail branches, which included labor costs, sales commissions and operating lease expenses. For the fiscal first half ended September 30, 2024, selling and marketing expenses were $1.9 million. In Singapore Dollars, for the fiscal first half ended September 30, 2024 and 2023, selling and marketing expenses were S$2.5 million and S$1.9 million respectively. The increase was primarily due to increase in salaries arising from new hires employed to run newly opened branches.
Research and development expenses
Research and development expenses primarily consisted of compensation cost to engineering, design and product development employees and software expenses. For the fiscal first half ended September 30, 2024, research and development expenses were $0.04 million. In Singapore Dollars, for the fiscal first half ended September 30, 2024 and 2023, research and development expenses were S$0.05 million and S$0.04 million respectively. The increase was primarily due to continued investment in new products and services to meet emerging customer demand.
General and administrative expenses
General and administrative expenses consisted primarily of motor vehicle operating expenses, transportation, property maintenance and property tax, allowance for expected credit losses and general administrative expenses such as staff costs, depreciation, legal and professional fees and other miscellaneous administrative expenses. For the fiscal first half ended September 30, 2024, general and administrative expenses were $3.0 million. In Singapore Dollars, for the fiscal first half ended September 30, 2024 and 2023, general and administrative expenses were S$3.8million and S$2.9 million respectively. The increase was mainly due to increased public company costs, including professional fees and compliance costs incurred related to the Company's listing on NASDAQ.
Net Income
As a result of the factors described above, net income for the fiscal first half ended September 30, 2024 was approximately $0.9 million. In Singapore Dollars, net income for the fiscal first half ended September 30, 2024 was approximately S$1.1 million, compared to net income of S$2.1 million, for the fiscal first half ended September 30, 2023.
Earnings per Share - Basic and Diluted
Earnings per basic and diluted share for the fiscal first half ended September 30, 2024 was $0.06. In Singapore Dollars, earnings per basic and diluted share for the fiscal first half ended September 30, 2024 was S$0.08, compared to S$0.17 for the same period of 2023.
Adjusted EBITDA
The Company also views earnings before interest, taxes, depreciation and amortization, subject to specific adjustments (Adjusted EBITDA) as an important measure of the results of operations. For the fiscal first half ended September 30, 2024, Adjusted EBITDA was $2.4 million. In Singapore dollars, Adjusted EBITDA decreased slightly to S$3.2 million, from S$3.4 million during the same period. The decrease was primarily driven by compliance costs and professional fees incurred related to the Company's listing on NASDAQ.
Outlook
Contemplating the Company's Outlook for the second half of Fiscal Year 2025, Mr. Zhang commented, "We look forward to start the fiscal second half with stronger growth in Rectitude with our Energy and Power Storage Products to increase workplace safety for users. We will focus on growing our revenue as we continue expanding our presence within the Southeast Asian markets we serve. We remain committed to the core principles that have guided our Company throughout its history, setting the foundation for increased growth and returns over the long term."
About Rectitude Holdings Ltd
Founded in 1997 in Singapore, Rectitude is principally involved in the provision of safety equipment, encompassing essential items such as personal protective clothing, gloves, safety footwear, personal fall arrest systems, portable fire extinguishers and traffic products. The Company also offers auxiliary products such as industrial hardware tools and electrical hardware required for construction sites. Rectitude's products and solutions are marketed to a wide array of distributor networks and end markets, both in Singapore and increasingly throughout the Southeast Asian region, including Brunei, Cambodia, Malaysia, Indonesia, and Vietnam.
The Company has also posted an earnings presentation to its website which can be found here: https://ir.rectitude.com.sg/presentations/
For more information, please visit the Company's website: https://ir.rectitude.com.sg.
Forward-Looking Statements
Certain statements in this announcement are forward-looking statements, including, but not limited to, the Company's proposed Offering. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs, including the expectation that the Offering will be successfully completed. Investors can identify these forward-looking statements by words or phrases such as "approximates," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the U.S. Securities and Exchange Commission.
For investor and media inquiries, please contact:
Rectitude
Investor Relations
Email: ir@rectitude.com.sg
Zachary Mizener
Lambert by LLYC
Phone: +1 (313) 309-9500
Email: zmizener@lambert.com
RECTITUDE HOLDINGS LTD
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS AND
COMPREHENSIVE INCOME FOR THE SIX MONTHS ENDED SEPTEMBER,
30 2023 AND 2024
For the Periods ended September 30,
----------------------------------------
2023 2024 2024
------------ ----------- -----------
S$ S$ US$
------------ ----------- -----------
Revenue 20,483,795 22,099,549 17,223,559
Cost of revenue (12,912,013) (14,422,920) (11,240,683)
----------- ----------- -----------
Gross profit 7,571,782 7,676,629 5,982,876
Selling and
marketing
expenses (1,913,781) (2,461,020) (1,918,027)
Research and
development
expenses (48,291) (51,376) (40,041)
General and
administrative
expenses (2,916,668) (3,821,950) (2,978,683)
----------- ----------- -----------
Total operating
expenses (4,878,740) (6,334,346) (4,936,751)
----------- ----------- -----------
Income from
operations 2,693,042 1,342,283 1,046,125
Other income
(expense)
Other income,
net 37,187 200,766 156,470
Interest expense (79,173) (88,865) (69,259)
----------- ----------- -----------
Total other
income, net (41,986) 111,901 87,211
----------- ----------- -----------
Income before
income tax 2,651,056 1,454,184 1,133,336
Income tax expense (553,689) (337,177) (262,783)
----------- ----------- -----------
Net income 2,097,367 1,117,007 870,553
=========== =========== ===========
Other
comprehensive
income
Foreign currency
translation loss - (388,769) (302,992)
----------- ----------- -----------
Total
comprehensive
income 2,097,367 728,238 567,561
=========== =========== ===========
Weighted average
number of
ordinary shares
Basic* 12,500,000 13,614,754 13,614,754
=========== =========== ===========
Diluted* 12,500,000 13,614,754 13,614,754
=========== =========== ===========
Earnings per
share
Basic 0.17 0.08 0.06
Diluted 0.17 0.08 0.06
=========== =========== ===========
RECTITUDE HOLDINGS LTD
CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 2024 AND
UNAUDITED INTERIM
CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER
30, 2024
March 31, September September
2024 30, 2024 30, 2024
----------- ---------- ----------
S$ S$ US$
----------- ---------- ----------
Assets
Current assets
Cash and cash
equivalents 3,468,594 3,970,988 3,094,839
Accounts
receivable, net 11,508,064 12,745,334 9,933,235
Inventories, net 6,249,895 6,095,351 4,750,488
Deferred
initial public
offering
("IPO") costs 1,560,933 -- --
Other receivables 497,309 617,646 481,370
Advances to
related parties 358,019 413,810 322,508
---------- ---------- ----------
Total current
assets 23,642,814 23,843,129 18,582,440
---------- ---------- ----------
Non-current assets
Financial
instrument 231,293 222,772 173,620
Loan receivables -- 7,057,050 5,500,000
Property, plant
and equipment,
net 5,811,883 6,233,598 4,858,232
Right-of-use
assets --
operating
leases 4,522,524 4,918,763 3,833,499
---------- ---------- ----------
Total
non-current
assets 10,565,700 18,432,183 14,365,351
---------- ---------- ----------
Total assets 34,208,514 42,275,312 32,947,791
========== ========== ==========
Liabilities and
shareholders'
equity
Current liabilities
Bank loans,
current portion 598,848 1,057,695 824,328
Finance lease
liabilities,
current portion 168,192 195,777 152,581
Accounts payable 6,441,094 7,195,709 5,608,066
Operating lease
liabilities,
current portion 1,240,129 1,250,366 974,488
Other payables 3,058,781 1,068,646 832,860
Provision for
income taxes 1,177,119 646,221 503,640
---------- ---------- ----------
Total current
liabilities 12,684,163 11,414,414 8,895,963
---------- ---------- ----------
Non-current
liabilities:
Bank loans,
non-current
portion 3,070,967 2,864,403 2,232,408
Finance lease
liabilities,
non-current
portion 379,481 657,916 512,755
Operating lease
liabilities,
non-current
portion 3,487,144 4,018,004 3,131,482
Deferred tax
liabilities 1,446 1,446 1,127
---------- ---------- ----------
Total non-current
liabilities 6,939,038 7,541,769 5,877,772
---------- ---------- ----------
Total liabilities 19,623,201 18,956,183 14,773,735
========== ========== ==========
Commitments and
contingencies (Note
20) -- -- --
========== ========== ==========
Shareholders' equity
Ordinary shares,
US$0.0001 par
value,
authorized
500,000,000
shares, issued
12,500,0000
shares
outstanding as
of March 31,
2024 and issued
14,500,000
shares
outstanding as
of September 30
2024,
respectively* 1,707 1,978 1,542
Additional
paid-in capital 3,377,293 11,382,600 8,871,172
Retained earnings 11,206,313 12,323,320 9,604,334
Other
comprehensive
loss -- (388,769) (302,992)
---------- ---------- ----------
Total
shareholders'
equity 14,585,313 23,319,129 18,174,056
---------- ---------- ----------
Total liabilities and
shareholders' equity 34,208,514 42,275,312 32,947,791
========== ========== ==========
RECTITUDE HOLDINGS LTD
UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS
OF CASH FLOWS
FOR SIX MONTHS ENDED SEPTEMBER 30, 2023 AND 2024
September September September
30, 2023 30, 2024 30, 2024
----------- ---------- ----------
S$ S$ US$
----------- ---------- ----------
Cash flows from
operating activities
Net income 2,097,367 1,117,007 870,553
Adjustments to
reconcile net income
to net cash provided
by/(used in)
operating activities
Depreciation of
property, plant
and equipment 269,095 289,103 225,316
Amortization of
right-of-use
assets 415,364 791,120 616,569
Operating lease
modifications (7,025) (40,525) (31,584)
Bad debts
write-off 28,542 -- --
Gain on disposal
of property,
plant and
equipment (5,000) (957) (746)
Allowance for
inventories
write-down 110,392 28,214 21,989
Allowance for
expected credit
losses -- third
parties 3,304 133,618 104,136
Fair value change
in financial
instrument (9,162) (3,031) (2,362)
Changes in operating
assets and
liabilities
Accounts
receivable, net 1,314,885 (1,370,888) (1,068,419)
Other receivables (109,147) (120,337) (93,786)
Advances to
related parties (56,959) (55,791) (43,481)
Inventories (274,165) 126,330 98,457
Accounts payable (73,743) 754,615 588,119
Other payables 309,327 (1,990,135) (1,551,037)
Finance lease
liabilities --
interest portion
of lease payment (16,782) (19,015) (14,820)
Operating lease
liabilities (321,309) (605,737) (472,089)
Income tax payable 65,913 (530,898) (413,760)
---------- ---------- ----------
Net cash provided
by/(used in) operating
activities 3,740,897 (1,497,307) (1,166,945)
---------- ---------- ----------
Cash flows from
investing
activities:
Purchases of
property, plant
and equipment (178,424) (298,761) (232,843)
Proceeds from
disposal of
property, plant
and equipment 5,000 1,000 779
Disbursement of loan to
third party -- (7,057,050) (5,500,000)
---------- ---------- ----------
Net cash used in
investing activities (173,424) (7,354,811) (5,732,064)
---------- ---------- ----------
Cash flows from
financing
activities:
Proceeds from
common shares
issued for cash -- 9,189,294 7,161,791
Advances from
/(repayment to)
shareholders,
net (122,767) -- --
Deferred IPO
expenses (241,690) -- --
Dividends paid (2,000,000) -- --
Repayments of bank
loans (191,611) 252,283 196,620
Payments for
finance lease
liabilities --
principal
portion (83,175) (87,065) (67,855)
---------- ---------- ----------
Net cash (used
in)/provided by
financing activities (2,639,243) 9,354,512 7,290,556
---------- ---------- ----------
Net changes in cash and
cash equivalents 928,230 502,394 391,547
Cash and cash
equivalents at
beginning of the
period 2,432,557 3,468,594 2,703,292
---------- ---------- ----------
Cash and cash
equivalents at end of
the period 3,360,787 3,970,988 3,094,839
========== ========== ==========
Supplement
disclosures of cash
flow information
Income taxes paid (487,776) (868,075) (676,545)
Interest paid (79,173) (88,865) (69,259)
========== ========== ==========
(END) Dow Jones Newswires
March 27, 2025 08:00 ET (12:00 GMT)
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