Fu Fuling Glo lobal I l Inc. (Nasda FORK ) daq: q: F Inves - - PowerPoint PPT Presentation

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Fu Fuling Glo lobal I l Inc. (Nasda FORK ) daq: q: F Inves - - PowerPoint PPT Presentation

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Fu Fuling Glo lobal I l Inc. (Nasda FORK ) daq: q: F Inves estor P Pres esen entation May ay 20 2020 20 1 FORWARD-LOOKING STATEMENTS Certain statements made in this presentation regarding Fuling Global Inc. or its affiliates (the

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Fu Fuling Glo lobal I l Inc. (Nasda

daq: q: F FORK) Inves estor P Pres esen entation

May ay 20 2020 20

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Certain statements made in this presentation regarding Fuling Global Inc. or its affiliates (the “Company”) and any other statements regarding the Company’s future expectations, beliefs, goals or prospects constitute forward-looking statements made within the meaning of Section 21E of the Securities Exchange Act of 1934. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “anticipates,” “expects,” “estimates” and similar expressions) should also be considered forward-looking statements. Forward-looking statements include, but are not limited to, statements regarding the projections for the Company’s business, and plans for future growth and operational improvements. Forward-looking statements are neither predictions nor guarantees of future events, circumstances or performance and are inherently subject to known and unknown risks, uncertainties and assumptions, including the impact of the coronavirus

  • n the company’s operating results, that could cause the Company’s actual results to differ materially

from those indicated by those statements. There can be no assurance that the Company’s expectations, estimates, assumptions and/or projections, including with respect to the future earnings and performance, will prove to be correct or that any of the Company’s expectations, estimates or projections will be achieved. A number of important factors could cause actual results or events to differ materially from those indicated by such forward-looking statements. Forward-looking statements speak only as of the date hereof, and the Company assumes no obligation to update the information in this presentation, except as otherwise required by law.

FORWARD-LOOKING STATEMENTS

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Fuling Global manufactures and distributes a wide range of

environmentally friendly disposable plastic and paper products for the foodservice industry. Most products are sold to major quick-service chains and wholesalers in the U.S., Canada, China and Europe.

Overview

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Company Highlights

$80 $89 $102 $124 $139 $151

$0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200

2014 2015 2016 2017 2018 2019

Strong Revenue Growth

MM

Large and diverse customer base, including quick-service restaurants (QSRs), foodservice dealers, manufacturers and retailers Proprietary R&D, technology expertise focused on new materials to produce cost-effective, environmentally-friendly products Global manufacturing footprint mitigates trade risks, provides economic efficiencies and benefits Proven ability to enter and grow in new geographic regions Management team with proven history dedicated to profitable growth

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Our History

Founded as Taizhou Fuling in Zhejiang, China, sold plastic household items Acquired 33-acre site for manufacturing expansion in Wenling, China; built 600,000-sq. ft. phase I facility in 2017 Experienced rapid growth in China, Taizhou Fuling began exporting plastic cutlery to the U.S. Great Plastics founded in China, began production

  • f drinking straws, cups

and plate items Established second international manufacturing facility in Monterrey, Mexico Sold Sanmen factory in China for U.S. $5.8 Million

1992 2003 2010 2014 2016 2018 2019

Fuling USA incorporated, established first international manufacturing facility in Allentown, PA Completed IPO, raising $20 million: listed on Nasdaq under the symbol “FORK”

2015

Completed Phase II expansion of Wenling manufacturing plant, adding 400,000 sq. ft. facility Established third international manufacturing in Semarang City,

  • Indonesia. Launched

production in February

5

2020

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Our Market

____________________________________ Sources: * Arizton Advisory & Intelligence – December 2019 – Foodservice Disposables Market - Global Outlook and Forecast 2020-2025 ** Statista – August 2019 – Fast Food Industry *** Statista – January 2020 – Online Food Delivery

  • The global foodservices disposables market is expected to grow at a CAGR of
  • ver 4% during the period 2019-2025, and to reach revenues of over $78

billion by 2025*

  • Growing demand from QSRs driving growth of foodservice manufacturing/

distribution systems sector

  • Rapidly growing trend in both food delivery and “to go” ordering
  • QSR sector in U.S. valued at $256 billion in 2018. It was estimated that there

were 194,395 quick service restaurant franchise establishments in 2019**

  • Revenue in U.S. online food delivery segment amounts to $24 billion in 2020

and is expected to show an CAGR of 5.1%, for market volume of $29 billion by 2024***

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Fuling Global Manufacturing Capacities

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ZHEJIANG PROVINCE, CHINA Songmen Plant

  • 191,000 square feet
  • 5,500-ton annual capacity

Wenling Plant

  • 55,000 square feet
  • 6,000-ton annual capacity

New Wenling Plant

  • 1.1 million square-feet
  • 59,000-ton annual capacity

ALLENTOWN, PA

  • U.S. headquarters
  • ~ 88,000 square feet

(including 30,000 sf distribution center)

  • 2,400-ton annual

capacity MONTERREY, MEXICO

  • 84,000 square feet
  • 3,200-ton annual capacity

SEMARANG CITY, INDONESIA

  • Production started in February 2020
  • 194,000 square feet (two equal-phase completion)
  • Potential 11,000-ton annual capacity
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Fuling’s Products

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  • Wide selection of high-quality, single-use

disposable plastic and paper items, including cutlery, drinking straws, cups and plates and others

  • More than 12,000 SKUs
  • Plastic and paper serviceware products are made

from environmentally-friendly materials

  • In addition to plastic serviceware, Fuling began

producing paper cups in its Songmen factory in 2017

  • In 2018, Fuling launched paper straw products

after installing 35 production lines in its new Wenling factory

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Proprietary Research & Development

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  • Fuling collaborates with the Technical Institute of Physics and Chemistry, Chinese

Academy of Sciences, to research foodservice disposables technology in materials, processes and systems

  • Through these collaborations, Fuling has secured important breakthroughs in

proprietary knowledge and patents, with focus on the latest biodegradable materials, including Polybutylene Succinate (“PBS”), PLA, and cellulose

  • Fuling’s advanced R&D center in Wenling, Zhejiang aims to develop five new products

every year

  • Business and consumer concerns over the environmental impact of plastics show that

consumers are more likely to purchase recycled and eco-friendly products, which typically command higher prices and achieve higher margins

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Our Facilities in China

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Songmen Plant

  • 191,000 sq. ft., established in 2003
  • 43 production lines
  • 316 employees

Wenling Plant

  • 55,000 sq. ft., established in 2011
  • 24 production lines
  • 150 employees

New Wenling Plant

  • 1.1 million sq. ft., established in 2017

with two-phase expansions

  • 206 production lines
  • 1,100 employees

All facilities operate 24/7

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Our Pennsylvania Facility (2015)

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  • U.S. headquarters in Allentown, PA
  • Began production of straws at 88,000 square-

foot manufacturing, distribution and fulfillment facility in 2015

  • Facility has 12 production lines, six

automation machines and 66 employees

  • Currently manufacturing ~200 tons of straws

per month (~22.5 million straws)

  • Allentown facility serves as key distribution

center for U.S. east coast

  • Facility operates 24/7
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Our Mexico Facility (2019)

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  • Second international manufacturing facility
  • utside of China in Monterrey, Mexico

(alleviates impact of ongoing U.S.-China trade tensions)

  • Facility has 31 production lines
  • 76 employees
  • Zero tariff on trade between the U.S. and

Mexico; low labor and transportation costs

  • Facility operates 24/7
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Our Indonesia Facility (2020)

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  • Sixth manufacturing facility; third outside

Mainland China – provides greater efficiencies and economic benefits, including reduced U.S. tariff expenditures

  • Two-phase equipment set-up:
  • Phase I – Straw, paper cup and plastic cup lid,

initial production launched in February 2020

  • Phase II – Disposable tableware, paper bags,

packaging container and plate production later in 2020

  • New facility is part of corporate initiative to

expand marketing and sales throughout Southeast Asia; facility will also serve U.S. markets

  • ~500 employees at full operation
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Customer Categories

  • Fuling sells and distribute products to more than

230 customers globally, including dealers, major branded QSRs, manufacturers and retailers

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46% 46% 63% 29% 27% 22% 21% 20% 9% 4% 7% 6% Estimated Sales % 2017 Estimated Sales % 2018 Estimated Sales % 2019

Dealers QSRs Manufacturers Retailers

Product Sales to Customers*

* Estimated sales % include sales through distributors to ultimate customers

  • Fuling supplies five of the seven largest QSR

restaurant chains in the U.S., based on 2018 U.S. system-wide sales amount as published by QSR Magazine

Customer Type Products Sold Region

Dealers Serviceware, Straws, Cups, Plates USA, Europe, Canada, others QSRs Serviceware, Straws, Cups USA, China Manufacturers Serviceware USA Retailers Serviceware, Straws, Cups, Plates USA, others

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Growth Strategy

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Expand number of traditional serviceware offerings and grow packaging products to retail and wholesale accounts Utilize new clamshell production line, installed in Wenling facility, for deeper market penetration among existing customer base Continue R&D efforts to provide new, advanced environmentally-friendly packaging products Increase global market share through geographical expansion

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Financial Summary

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$7.7 $7.9 $7.9 $6.3 $9.8 $14.9

$0 $2 $4 $6 $8 $10 $12 $14 $16

2014 2015 2016 2017 2018 2019

Net Income

MM

$83 $90 $102 $124 $139 $151

$0 $20 $40 $60 $80 $100 $120 $140 $160 $180 $200

2014 2015 2016 2017 2018 2019

Revenue

MM

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Financial Summary

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Twelve Months Ended December 31,

($ millions, except per share data)

2019 2018 2017 Revenues $ 151.11 $ 138.66 $ 124.21 Gross profit $ 37.61 $ 29.75 $ 26.13 Income from operations $ 15.36 $ 10.17 $ 9.09 Income before income taxes $ 16.96 $ 10.97 $ 9.05 Net income from continuing operations $ 14.41 $ 9.85 $ 8.27 Net income attributable to Fuling Global $ 15.02 $ 9.86 $ 6.28 EPS $ 0.94 $ 0.61 $ 0.39 EPS from continuing operations $ 0.91 $ 0.62 $ 0.52 Year-ended December 31,

($ millions)

2019 2018 Cutlery $ 68.6 $ 66.6 Straws $ 21.9 $ 23.6 Cups & plates $ 48.1 $ 37.4 Others $ 12.5 $ 11.1 Year-ended December 31,

($ millions)

2019 2018 United States $ 129.7 $ 118.3 China $ 10.2 $ 8.3 Canada $ 5.6 $ 1.6 Europe $ 1.5 $ 6.6 Other countries $ 4.2 $ 3.8

Revenues by Product Category Revenues by Geography

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Financial Summary

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BALANCE SHEET DATA

As of December 31,

($ millions, except per share data)

2019 2018 2017 Cash and cash equivalents $ 8.6 $ 4.4 $ 4.1 Restricted cash $ 1.1 $ 2.4 $ 3.8 Accounts receivable, net $ 23.8 $ 27.8 $ 22.9 Inventories, net $ 23.8 $ 22.3 $ 19.3 Current assets $ 61.3 $ 59.5 $ 57.0 Property, plant and equipment, net $ 54.1 $ 51.8 $ 43.7 Total assets $ 134.3 $ 122.6 $ 116.7 Current liabilities $ 36.6 $ 47.5 $ 55.6 Total liabilities $ 55.3 $ 57.9 $ 58.7 Total shareholders’ equity (net assets) $ 79.1 $ 64.7 $ 58.0 Shares outstanding 15,803,763 15,795,910 15,780,205 $7.9 $6.8 $9.7 $22.9 $27.8 $23.8 $19.3 $22.3 $23.8

$0 $10 $20 $30 $40 $50 $60

2017 2018 2019

Total Cash Accounts Receivable Inventory

Working Capital Performance

($ millions)

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Management Team

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Xinfu Hu

  • CEO & Co-Founder
  • Two decades of experience building successful

global foodservice manufacturing/distribution business

  • Deputy Chair of the China Chamber of Commerce

for Import and Export of Light Industrial Products

Guilan Jiang

  • Chair of the Board, COO & Co-Founder
  • Deputy Chair of the China Plastics Processing

Industry Association and Chair of the Wenling Plastics Association

  • Awarded Outstanding Female Executive of the Year

in China; Top 10 Outstanding Female in Zhejiang

Peng (Gillian) Hu

  • CFO since 2020
  • Previously held auditor positions at Ernst & Young and

Friedman LLP; was controller at Hunan International Economics University, subsidiary of Nasdaq-listed Laureate Education Inc.

  • Earned M.S. degree in taxation from Zicklin School of

Business, Baruch College, New York

John Kunes

  • Executive Vice President, Fuling USA, since 2013
  • Responsible for sales expansion, distribution and

customer relations

  • Prior experience as Director of Operations for Jet Plastica

Industries and Director of Finance for Tenneco Packaging

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Why Invest in Fuling?

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Quality, diverse customer base; significant cross- selling opportunities Significant expansion of global manufacturing capacity to mitigate trade risks and effect cost efficiencies Well positioned to benefit from growing trend toward food delivery and at-home dining Early adopter addressing environmental concerns and legislative initiatives for disposable products Demonstrated history of solid revenue growth and consistent profitability

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Co Company Co Contact: Gillian Hu, CFO gillian.hu@fulingplastics.com.cn Investo tor Relati tions C Conta tact: t: Judy Lin Sfetcu / Roger Pondel - PondelWilkinson Inc. jsfetcu@pondel.com / rpondel@pondel.com Phone: 1-310-279-5980

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