FAIRFIELD, NJ / ACCESSWIRE / August 13, 2024 / Jerash Holdings (US), Inc. (NASDAQ:JRSH) (the "Company" or "Jerash"), which manufactures and exports custom, ready-made, sportswear and outerwear for leading global brands, today announced financial results for its fiscal 2025 first quarter, ended June 30, 2024.
"Revenue for the fiscal 2025 first quarter grew by nearly 18 percent over the prior year period to a record high," said Sam Choi, Jerash's chairman and chief executive officer. "We are continuing to receive an increasing number of purchase orders for export shipments to our global customers in the U.S. and Europe, and our factories are currently fully booked through December 2024.
"Jerash's gross margin was once again impacted by the Red Sea shipping crisis, which continues to disrupt ocean trade routes, and led to significant increases in ocean freight rates and inland trucking prices. We faced delays in receiving raw materials last quarter due to the disruptions in the Red Sea, resulting in delays in production. Consequently, we incurred additional manufacturing costs associated with catching up on deliveries to our customers to compensate for these delays.
"The increased logistics and labor costs had an approximately 440 basis point negative impact on gross margin for the first quarter. Nevertheless, gross margin increased by about 400 basis points over the preceding quarter. While some of the higher costs are continuing into the second quarter, we anticipate a more normalized operating environment in the second half of this fiscal year.
"Positive momentum is continuing as we proceed into fiscal 2025. We are receiving a steady flow of purchase orders from global customers, expanding our product mix, as well as an increasing number of trial orders from major brands through our joint venture partner, Busana Apparel Group. To ensure minimal operational disruptions in the event of an escalating geopolitical situation in the region, we have put contingency plans in place with our partners in other locations," Choi added.
Outlook
-
Revenue for the fiscal 2025 second quarter is expected to increase by 11-13 percent from the same quarter last year; full-year revenue is expected to increase by 20-25 percent.
-
Gross margin goal for fiscal year 2025 is currently expected to be around 12-14 percent, subject to logistics and shipping charges and product mix.
Fiscal 2025 First Quarter Results
Fiscal 2025 first quarter revenue advanced to $40.9 million, up by 17.8 percent from $34.7 million in the same period last year, reflecting an increase in shipments to Jerash's major U.S. customers and growth with new customers in other regions that the Company added during the past two years.
Gross profit was $4.6 million for the fiscal 2025 first quarter, compared with $5.6 million in the same quarter last year. Gross margin for the quarter decreased to 11.3 percent, from 16.0 percent in the same period last year, primarily due to higher raw material import costs caused by the Red Sea shipping disruption, as well as additional costs, primarily on overtime and incentives paid, associated with catching up on delivery schedules to customers.
Operating expenses totaled $5.5 million in the fiscal 2025 first quarter, compared with $4.5 million in the same period last year. The increase was primarily due to the increase in shipments, higher sampling support costs, and increases in payroll and stock-based compensation expenses.
Operating loss totaled $829,000 in the fiscal 2025 first quarter, versus operating income of $1.1 million in the same period last year.
Total other expenses were $426,000 in the fiscal 2025 first quarter, compared with $299,000 in the same quarter last year. The increase primarily reflected higher interest expenses from the supply chain financing programs of certain major customers.
Net loss was $1.4 million, or $0.11 per share, in the fiscal 2025 first quarter, compared with net income of $495,000, or $0.04 per share, in the same period last year. Comprehensive loss attributable to the Company's common stockholders totaled $1.3 million in the fiscal 2025 first quarter, versus comprehensive income of $402,000 in the same period last year.
Balance Sheet, Cash Flow, and Dividends
Cash and restricted cash totaled $13.0 million, and net working capital was $34.5 million as of June 30, 2024. Net cash used in operating activities was approximately $2.2 million for the quarter ended June 30, 2024, compared with net cash provided by operating activities of $25,000 for the same period last year.
On August 5, 2024, Jerash's board of directors approved a regular quarterly dividend of $0.05 per share on its common stock, payable on August 23, 2024 to stockholders of record as of August 16, 2024.
Conference Call
Jerash Holdings will host an investor conference call to discuss its fiscal 2025 first quarter results today, August 13, 2024, at 9:00 a.m. Eastern Time.
Phone: 888-506-0062 (domestic); 973-528-0011 (international)
Conference ID: 510634
A live and archived webcast will be available online in the investor relations section of Jerash's website at www.jerashholdings.com. For those who are not able to listen to the live broadcast, the call will be archived for approximately one year on the website.
About Jerash Holdings (US), Inc.
Jerash manufactures and exports custom, ready-made, sportswear and outerwear for leading global brands and retailers, including VF Corporation (which owns brands such as The North Face, Timberland, and Vans), New Balance, G-III (which licenses brands such as Calvin Klein, Tommy Hilfiger, DKNY, and Guess), American Eagle, and Skechers. Jerash's existing production facilities comprise six factory units and four warehouses, and Jerash currently employs approximately 5,000 people. Additional information is available at www.jerashholdings.com.
Forward-Looking Statements
This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words "may", "would", "could", "will", "intend", "plan", "anticipate", "believe", "estimate", "expect", "seek", "potential," "outlook" and similar expressions are intended to identify forward-looking statements. Such statements, including, but not limited to, Jerash's current views with respect to future events and its financial forecasts, and expansion of the customer base among high-profile global brands, are subject to such risks and uncertainties. Many factors could cause actual results to differ materially from the statements made, including those risks described from time to time in filings made by Jerash with the Securities and Exchange Commission. In addition, there is uncertainty about the further spread of the COVID-19 virus or the occurrence of another wave of cases and the impact it may have on the Company's operations, the demand for the Company's products, global supply chains and economic activity in general. These and other risks and uncertainties are detailed in the Company's filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected. Statements contained in this news release regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Jerash does not intend and does not assume any obligation to update these forward-looking statements, other than as required by law.
Contact:
PondelWilkinson Inc.
Judy Lin or Roger Pondel
310-279-5980; jlin@pondel.com
# # #
(tables below)
JERASH HOLDINGS (US), INC., AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS)
INCOME (Unaudited)
|
|
|
For the Three Months Ended June 30,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
|
|
|
|
|
|
|
|
Revenue, net
|
|
$
|
40,935,716
|
|
|
$
|
34,735,657
|
|
|
Cost of goods sold
|
|
|
36,295,845
|
|
|
|
29,168,117
|
|
|
Gross Profit
|
|
|
4,639,871
|
|
|
|
5,567,540
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general, and administrative expenses
|
|
|
4,999,744
|
|
|
|
4,234,918
|
|
|
Stock-based compensation expenses
|
|
|
468,935
|
|
|
|
240,802
|
|
|
Total Operating Expenses
|
|
|
5,468,679
|
|
|
|
4,475,720
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Income from Operations
|
|
|
(828,808
|
)
|
|
|
1,091,820
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Income (Expenses):
|
|
|
|
|
|
|
|
|
|
Interest expenses
|
|
|
(480,203
|
)
|
|
|
(388,951
|
)
|
|
Other income, net
|
|
|
54,035
|
|
|
|
90,227
|
|
|
Total other expenses, net
|
|
|
(426,168
|
)
|
|
|
(298,724
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income before provision for income taxes
|
|
|
(1,254,976
|
)
|
|
|
793,096
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expenses
|
|
|
111,721
|
|
|
|
297,981
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
|
(1,366,697
|
)
|
|
|
495,115
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss attributable to noncontrolling interest
|
|
|
21,481
|
|
|
|
1,411
|
|
|
Net (loss) income attributable to Jerash Holdings (US), Inc.'s Common Stockholders
|
|
$
|
(1,345,216
|
)
|
|
$
|
496,526
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(1,366,697
|
)
|
|
$
|
495,115
|
|
|
Other Comprehensive Income (Loss):
|
|
|
|
|
|
|
|
|
|
Foreign currency translation income (loss)
|
|
|
8,913
|
|
|
|
(94,659
|
)
|
|
Total Comprehensive (Loss) Income
|
|
|
(1,357,784
|
)
|
|
|
400,456
|
|
|
Comprehensive loss attributable to noncontrolling interest
|
|
|
21,481
|
|
|
|
1,411
|
|
|
Comprehensive (Loss) Income Attributable to Jerash Holdings (US), Inc.'s Common Stockholders
|
|
$
|
(1,336,303
|
)
|
|
$
|
401,867
|
|
|
|
|
|
|
|
|
|
|
|
|
(Loss) Earnings Per Share Attributable to Common Stockholders:
|
|
|
|
|
|
|
|
|
|
Basic and diluted
|
|
$
|
(0.11
|
)
|
|
$
|
0.04
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted Average Number of Shares
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
12,294,840
|
|
|
|
12,294,840
|
|
|
Diluted
|
|
|
12,294,840
|
|
|
|
12,294,840
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividend per share
|
|
$
|
0.05
|
|
|
$
|
0.05
|
|
JERASH HOLDINGS (US), INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|
|
|
June 30,
2024
|
|
|
March 31,
2024
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
ASSETS
|
|
|
Current Assets:
|
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
11,366,228
|
|
|
$
|
12,428,369
|
|
|
|
|
Accounts receivable, net
|
|
|
9,400,763
|
|
|
|
5,417,513
|
|
|
|
|
Inventories
|
|
|
20,727,685
|
|
|
|
27,241,573
|
|
|
|
|
Prepaid expenses and other current assets
|
|
|
2,981,096
|
|
|
|
2,746,068
|
|
|
|
|
Advance to suppliers, net
|
|
|
3,166,899
|
|
|
|
3,086,137
|
|
|
|
|
Total Current Assets
|
|
|
47,642,671
|
|
|
|
50,919,660
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restricted cash - non-current
|
|
|
1,607,644
|
|
|
|
1,608,498
|
|
|
|
|
Long-term deposits
|
|
|
1,000,682
|
|
|
|
802,306
|
|
|
|
|
Deferred tax assets, net
|
|
|
158,329
|
|
|
|
158,329
|
|
|
|
|
Property, plant, and equipment, net
|
|
|
24,573,926
|
|
|
|
24,998,096
|
|
|
|
|
Goodwill
|
|
|
499,282
|
|
|
|
499,282
|
|
|
|
|
Operating lease right of use assets
|
|
|
1,177,242
|
|
|
|
1,259,395
|
|
|
|
|
Total Assets
|
|
$
|
76,659,776
|
|
|
$
|
80,245,566
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
Credit facilities
|
|
$
|
2,130,743
|
|
|
$
|
-
|
|
|
|
|
Accounts payable
|
|
|
3,299,839
|
|
|
|
6,340,237
|
|
|
|
|
Accrued expenses
|
|
|
3,425,901
|
|
|
|
4,175,843
|
|
|
|
|
Income tax payable - current
|
|
|
1,449,202
|
|
|
|
1,647,199
|
|
|
|
|
Other payables
|
|
|
2,300,102
|
|
|
|
2,234,870
|
|
|
|
|
Deferred revenue
|
|
|
246,027
|
|
|
|
10,200
|
|
|
|
|
Operating lease liabilities - current
|
|
|
288,768
|
|
|
|
370,802
|
|
|
|
|
Total Current Liabilities
|
|
|
13,140,582
|
|
|
|
14,779,151
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease liabilities - non-current
|
|
|
592,122
|
|
|
|
618,302
|
|
|
|
|
Income tax payable - non-current
|
|
|
-
|
|
|
|
417,450
|
|
|
|
|
Total Liabilities
|
|
|
13,732,704
|
|
|
|
15,814,903
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 500,000 shares authorized; none issued and outstanding
|
|
$
|
-
|
|
|
$
|
-
|
|
|
|
|
Common stock, $0.001 par value; 30,000,000 shares authorized; 12,534,318 shares issued, and 12,294,840 shares outstanding
|
|
|
12,534
|
|
|
|
12,534
|
|
|
|
|
Additional paid-in capital
|
|
|
24,386,029
|
|
|
|
23,917,094
|
|
|
|
|
Treasury stock, 239,478 shares
|
|
|
(1,169,046
|
)
|
|
|
(1,169,046
|
)
|
|
|
|
Statutory reserve
|
|
|
413,821
|
|
|
|
413,821
|
|
|
|
|
Retained earnings
|
|
|
39,744,280
|
|
|
|
41,704,238
|
|
|
|
|
Accumulated other comprehensive loss
|
|
|
(483,406
|
)
|
|
|
(492,319
|
)
|
|
|
|
Total Jerash Holdings (US), Inc. Stockholders' Equity
|
|
|
62,904,212
|
|
|
|
64,386,322
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncontrolling interest
|
|
|
22,860
|
|
|
|
44,341
|
|
|
|
|
Total Equity
|
|
|
62,927,072
|
|
|
|
64,430,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Liabilities and Equity
|
|
$
|
76,659,776
|
|
|
$
|
80,245,566
|
|
|
|
JERASH HOLDINGS (US), INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
|
|
|
For the Three Months Ended
June 30,
|
|
|
|
|
2024
|
|
|
2023
|
|
|
CASH FLOWS FROM OPERATING ACTIVITIES
|
|
|
|
|
|
|
|
Net (loss) income
|
|
$
|
(1,366,697
|
)
|
|
$
|
495,115
|
|
|
Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
|
612,759
|
|
|
|
608,776
|
|
|
Stock-based compensation expenses
|
|
|
468,935
|
|
|
|
240,802
|
|
|
Amortization of operating lease right-of-use assets
|
|
|
150,008
|
|
|
|
205,112
|
|
|
|
|
|
|
|
|
|
|
|
|
Changes in operating assets:
|
|
|
|
|
|
|
|
|
|
Accounts receivable
|
|
|
(3,983,251
|
)
|
|
|
(4,169,920
|
)
|
|
Bills receivable
|
|
|
-
|
|
|
|
87,573
|
|
|
Inventories
|
|
|
6,513,887
|
|
|
|
8,856,426
|
|
|
Prepaid expenses and other current assets
|
|
|
(235,028
|
)
|
|
|
62,161
|
|
|
Advance to suppliers
|
|
|
(80,762
|
)
|
|
|
(1,679,610
|
)
|
|
Changes in operating liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
(3,040,398
|
)
|
|
|
(2,211,568
|
)
|
|
Accrued expenses
|
|
|
(749,942
|
)
|
|
|
(485,721
|
)
|
|
Other payables
|
|
|
65,232
|
|
|
|
(203,553
|
)
|
|
Deferred revenue
|
|
|
235,827
|
|
|
|
(303,261
|
)
|
|
Operating lease liabilities
|
|
|
(176,069
|
)
|
|
|
(206,702
|
)
|
|
Income tax payable
|
|
|
(615,449
|
)
|
|
|
(1,270,858
|
)
|
|
Net cash (used in) provided by operating activities
|
|
|
(2,200,948
|
)
|
|
|
24,772
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM INVESTING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Purchases of property, plant, and equipment
|
|
|
(130,271
|
)
|
|
|
(61,258
|
)
|
|
Payments for construction of properties
|
|
|
(15,150
|
)
|
|
|
(1,434,965
|
)
|
|
Payment for long-term deposits
|
|
|
(241,544
|
)
|
|
|
(276,498
|
)
|
|
Net cash used in investing activities
|
|
|
(386,965
|
)
|
|
|
(1,772,721
|
)
|
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
Dividend payment
|
|
|
(614,742
|
)
|
|
|
(614,742
|
)
|
|
Repayment from short-term loan
|
|
|
(3,435,297
|
)
|
|
|
-
|
|
|
Proceeds from short-term loan
|
|
|
5,566,040
|
|
|
|
3,117,337
|
|
|
Net cash provided by financing activities
|
|
|
1,516,001
|
|
|
|
2,502,595
|
|
|
|
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND RESTRICTED CASH
|
|
|
8,917
|
|
|
|
(95,016
|
)
|
|
|
|
|
|
|
|
|
|
|
|
NET (DECREASE) INCREASE IN CASH AND RESTRICTED CASH
|
|
|
(1,062,995
|
)
|
|
|
659,630
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH, AND RESTRICTED CASH, BEGINNING OF THE PERIOD
|
|
|
14,036,867
|
|
|
|
19,411,603
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH, AND RESTRICTED CASH, END OF THE PERIOD
|
|
$
|
12,973,872
|
|
|
$
|
20,071,233
|
|
|
|
|
|
|
|
|
|
|
|
|
CASH, AND RESTRICTED CASH, END OF THE PERIOD
|
|
$
|
12,973,872
|
|
|
$
|
20,071,233
|
|
|
LESS: NON-CURRENT RESTRICTED CASH
|
|
|
1,607,644
|
|
|
|
1,611,294
|
|
|
CASH, END OF THE PERIOD
|
|
$
|
11,366,228
|
|
|
$
|
18,459,939
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure information:
|
|
|
|
|
|
|
|
|
|
Cash paid for interest
|
|
$
|
480,203
|
|
|
$
|
388,951
|
|
|
Income tax paid
|
|
$
|
726,177
|
|
|
$
|
1,585,961
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash investing and financing activities
|
|
|
|
|
|
|
|
|
|
Equipment obtained by utilizing long-term deposit
|
|
$
|
44,215
|
|
|
$
|
25,464
|
|
|
Operating lease right of use assets obtained in exchange for operating lease obligations
|
|
$
|
67,512
|
|
|
$
|
177,068
|
|
SOURCE: Jerash Holdings (US), Inc.
View the original
press release on accesswire.com
