ZK International Group Co Ltd. Announces Record Revenue of $49.66 Million, an Increase of 15.77% for the First Half of Fiscal Year 2023.

WENZHOU, China: ZK International Group Co., Ltd. (ZKIN) ("ZK International" or the "Company"), a designer, engineer, manufacturer, and supplier of patented high-performance stainless steel and carbon steel pipe products primarily used for water and gas supplies, today announced its unaudited financial results for the six months ended March 31, 2023.

Financial Highlights for the First Half of Fiscal Year 2023

For the Six Months Ended March 31,

($ millions, except per share data)

2023

2022

% Change

Revenue

$

49.66

$

42.89

15.77

%

Gross profit

$

3.17

$

3.97

-20.13

%

Gross margin

6.38

%

9.25

%

-2.87

% pp*

Income from operations

$

0.14

$

0.24

-41.91*

%

Operating margin

0.29

%

0.57

%

-0.28

% pp*

Net income (loss)

$

(0.06)

$

0.001

0.00

%

Diluted earnings per share

$

0.00

$

0.00

0.00

%

Net book value per share

$

2.85

$

2.89

-1.45

%

* pp: percentage point(s)

Revenue increased 15.77% to a record $49.66 million for the six months ended March 31, 2023 from approximately $42.89 million for the six months ended March 31, 2022. During the first fiscal half of 2023, we observed an increase of raw materials, especially the price of nikel which is an important component of stainless steel. To minimize the impact the rise of raw material price, we increased our weighted average selling price ("ASP") during the period. The increase of sales is also attributable to the recovery of domestic demand and we achieved an overall increase in sales volume during the six months ended March 31, 2022.

Gross profit decreased by 20.13% to $3.17 million. Gross margin was 6.38%, compared to 9.25% for the same period of the prior fiscal period. The decrease of gross profit was primarily due to increased raw material cost, especially the cost of stainless steel coil which is the main material for our products. Though we have increased ASP of our products, we supplied to certain customers on fixed price basis that cannot be adjusted until the existing contract expires.

Income from operations was $0.14 million, compared to income from operations of $0.24 million for the same period of the prior fiscal year. Operating margin was 0.29%, compared to 0.57% for the same period of the prior fiscal year. The decrease of operating margin was primarily due to decreased gross margin of our sales.

Net loss was $0.06 million. This compared to net income of $0.001 million for the same period of the prior fiscal year.

Net book value per share was $2.85 as of March 31, 2023, compared to $2.89...