iFresh, Inc. Reports Fiscal 2017 Financial Results
June 30 2017 - 8:30AM
iFresh, Inc. (“iFresh” or “the Company”) (Nasdaq:IFMK), a leading
Asian American grocery supermarket chain and online grocer in the
United States, today reported audited financial results for the
fiscal year ended March 31, 2017.
Fiscal 2017 Highlights:
- Total net sales decrease of 0.3% to $130.9 million from $131.2
million compared to fiscal 2016
- Retail segment net sales decrease of 5.0% to $106.8 million
from $112.4 million compared to fiscal 2016
- Total wholesale segment net sales increase of 27.7% to $24.1
million from $18.9 million compared to fiscal 2016
- Gross margin increase to 21.3% from 20.3% in fiscal 2016
- Net income of $1.6 million or $0.13 per diluted share compared
to $3.6 million or $0.30 in fiscal 2016
Long Deng, Chairman of the board of directors and CEO of iFresh,
commented, “We are pleased to see strong results in the competitive
environment of fiscal 2017. Retail store sales dipped because of
non-recurring interruptions in one of our bigger stores, impacting
net income, but net sales remained stable due to robust growth in
our wholesale business. Gross margin increased due to improved
efficiencies in our procurement system, and our cash position is
strong.
We are also proud of our public listing through the business
combination with E-Compass Acquisition Corporation. While this
impacted net income through a significant increase in selling,
general, and administrative expenses, becoming a publicly listed
company adds tremendous intangible value to our brand. We look
forward to carrying this momentum through fiscal 2018, during which
we will continue to drive growth by refining our
vertically-integrated model, expanding our store presence along the
I-95 corridor, and further promoting our online and mobile
platforms to reach more customers. We expect to have a promising
future ahead as we gain importance in a niche market and evolve to
become a major player. We look forward to sharing our progress with
our investors in the coming months ahead.”
Fiscal Year 2017
In the fiscal year ended March 31, 2017, total net sales were
$130.9 million, a decrease of 0.3% as compared to $131.2 million in
the previous year. This was driven by a retail segment net sales
decrease of 5.0% to $106.8 million from $112.4 million compared to
fiscal 2016 and a total wholesale segment net sales increase of
27.7% to $24.1 million from $18.9 million compared to fiscal
2016.
Gross profit for 2017 increased by 4.8% to $27.9 million
compared to $26.6 million in the prior year driven by growth and
efficiencies in the wholesale business. Gross margin was 21.3% and
20.3% for the fiscal years 2017 and 2016, respectively.
SG&A expense was $25.7 million in fiscal 2017 compared to
$20.7 million in the same period last fiscal year due to an
increase in payroll and fees related to the NYM/E-Compass business
combination.
Income from operations was $2.1 million compared to $5.9 million
in fiscal 2016. Profit margin was 1.6% and 4.5% for the fiscal
years 2017 and 2016, respectively.
Net income was $1.6 million or $0.13 per basic and diluted share
in fiscal 2017 compared to $3.6 million or $0.30 per basic and
diluted share in fiscal 2016.
Balance Sheet
As of March 31, 2017, the Company had cash and cash equivalents
of $2.5 million, compared to $0.6 million as of March 31, 2016.
Working capital was a positive $13.4 million, compared to a
negative $3.3 million as at the end of fiscal 2016. As of March 31,
2017, the Company had $1.1 million of bank loans due within one
year.
For the full year of 2017, net cash provided by operating
activities was $2.6 million. Net cash used in investing activities
was $10.6 million. Net cash provided by financing activities was
$10.0 million.
Financial Outlook
In the coming months, as the Company continues to make
investments in its business to expand, management expects its
financial performance to remain stable. Costs may rise due to
planned expansions, but these are expected to be offset in later
quarters due to expected increases in sales. On a
quarter-to-quarter basis, the Company expects to see slightly lower
sales in its fiscal 2018 first quarter than in the previous quarter
due to the impact of seasonality --the Company’s fiscal fourth
quarter sales that concludes March 31st are typically sharply
boosted by the Chinese Spring Festival, which in 2017 was
celebrated at the end of January, and while the Dragon Boat
Festival in June presents a sales bump, it does not present as
sharp of a sales increase as the Spring Festival.
About iFresh, Inc.
iFresh Inc., headquartered in New York, New York, is a leading
Asian American grocery supermarket chain and online grocer. With
eight retail supermarkets along the US eastern seaboard and two
in-house wholesale businesses strategically located in cities with
a highly concentrated Asian population, the Company aims to satisfy
the increasing demands of Asian Americans, whose purchasing power
has been growing rapidly, for fresh and culturally unique produce,
seafood and other groceries that are not found in mainstream
supermarkets. With an in-house proprietary delivery network, online
sales channel and strong relations with farms that produce Chinese
specialty vegetables and fruits, iFresh is able to offer fresh,
high-quality specialty perishables at competitive prices to a
growing base of customers. For more information, please visit:
http://www.ifreshmarket.com/.
Forward-Looking Statements
This announcement contains forward-looking statements.
Forward-looking statements provide our current expectations or
forecasts of future events. Forward-looking statements include
statements about our expectations, beliefs, plans, objectives,
intentions, assumptions and other statements that are not
historical facts. Words or phrases such as “anticipate,” “believe,”
“continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,”
“plan,” “potential,” “predict,” “project,” “will” or similar words
or phrases, or the negatives of those words or phrases, may
identify forward-looking statements, but the absence of these words
does not necessarily mean that a statement is not forward-looking.
Examples of forward-looking statements in this announcement
include, but are not limited to, statements regarding our
disclosure concerning the Company’s operations, cash flows,
financial position and dividend policy.
Financial statements below:
iFRESH INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF INCOME |
|
|
|
For the years ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2017 |
|
|
2016 |
|
Net sales |
|
$ |
121,826,207 |
|
|
$ |
125,021,947 |
|
Net sales-related
parties |
|
|
9,050,553 |
|
|
|
6,203,277 |
|
Total net sales |
|
|
130,876,760 |
|
|
|
131,225,224 |
|
Cost of sales |
|
|
87,610,153 |
|
|
|
91,738,333 |
|
Cost of sales-related
parties |
|
|
8,162,545 |
|
|
|
5,520,917 |
|
Occupancy costs |
|
|
7,219,860 |
|
|
|
7,367,155 |
|
Gross
profit |
|
|
27,884,202 |
|
|
|
26,598,819 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
|
25,734,216 |
|
|
|
20,718,062 |
|
Income
from operations |
|
|
2,149,986 |
|
|
|
5,880,757 |
|
Interest expense,
net |
|
|
(303,894 |
) |
|
|
(215,494 |
) |
Other income |
|
|
1,360,616 |
|
|
|
992,620 |
|
Income
before income taxes |
|
|
3,206,708 |
|
|
|
6,657,883 |
|
Income tax
provision |
|
|
(1,656,334 |
) |
|
|
(3,016,874 |
) |
Net
income |
|
$ |
1,550,374 |
|
|
$ |
3,641,009 |
|
|
|
|
|
|
|
|
|
|
Net income per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.13 |
|
|
$ |
0.30 |
|
Diluted |
|
$ |
0.13 |
|
|
$ |
0.30 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
12,282,325 |
|
|
|
12,000,000 |
|
Diluted |
|
|
12,282,325 |
|
|
|
12,000,000 |
|
iFRESH INC. AND SUBSIDIARIES |
CONSOLIDATED BALANCE SHEETS |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2017 |
|
|
2016 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
2,508,362 |
|
|
$ |
551,782 |
|
Accounts
receivable, net |
|
|
2,272,011 |
|
|
|
1,814,533 |
|
Inventories, net |
|
|
9,796,984 |
|
|
|
8,200,557 |
|
Prepaid
expenses and other current assets |
|
|
981,017 |
|
|
|
473,608 |
|
Advances
to related parties |
|
|
14,852,083 |
|
|
|
- |
|
Total current
assets |
|
|
30,410,457 |
|
|
|
11,040,480 |
|
Property
and equipment, net |
|
|
9,290,674 |
|
|
|
9,770,382 |
|
Intangible assets, net |
|
|
1,300,001 |
|
|
|
1,433,333 |
|
Security
deposits |
|
|
912,346 |
|
|
|
925,477 |
|
Deferred
income taxes |
|
|
86,799 |
|
|
|
- |
|
Advances
to related parties |
|
|
- |
|
|
|
5,368,002 |
|
Total
assets |
|
$ |
42,000,277 |
|
|
$ |
28,537,674 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
12,364,071 |
|
|
|
10,545,342 |
|
Deferred
revenue |
|
|
206,737 |
|
|
|
145,497 |
|
Bank
loans, current, net |
|
|
1,144,568 |
|
|
|
30,185 |
|
Notes
payable, current |
|
|
262,578 |
|
|
|
208,059 |
|
Capital
lease obligations, current |
|
|
51,376 |
|
|
|
48,303 |
|
Accrued
expenses |
|
|
730,392 |
|
|
|
1,026,871 |
|
Taxes
payable |
|
|
1,769,398 |
|
|
|
1,693,872 |
|
Other
payables, current |
|
|
501,213 |
|
|
|
654,175 |
|
Total current
liabilities |
|
|
17,030,333 |
|
|
|
14,352,304 |
|
Bank
loans, non-current, net |
|
|
12,779,838 |
|
|
|
3,561,609 |
|
Notes
payable, non-current |
|
|
379,376 |
|
|
|
424,291 |
|
Capital
lease obligations, non-current |
|
|
59,907 |
|
|
|
40,468 |
|
Deferred
rent |
|
|
5,424,134 |
|
|
|
4,930,154 |
|
Other
payables, non-current |
|
|
34,800 |
|
|
|
37,800 |
|
Deferred
income taxes, net |
|
|
- |
|
|
|
79,422 |
|
Total
liabilities |
|
|
35,708,388 |
|
|
|
23,426,048 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
|
|
|
|
Preferred
shares, $.0001 par value, 1,000,000 shares authorized; none
issued. |
|
|
- |
|
|
|
- |
|
Common
stock, $0.0001 par value; 100,000,000 shares authorized, 14,103,033
and 12,000,000 shares issued and outstanding as of March 31, 2017
and 2016, respectively |
|
|
1,410 |
|
|
|
1,200 |
|
Additional paid-in capital |
|
|
9,075,025 |
|
|
|
9,445,346 |
|
Accumulated deficit |
|
|
(2,784,546 |
) |
|
|
(4,334,920 |
) |
Total shareholders’
equity |
|
|
6,291,889 |
|
|
|
5,111,626 |
|
Total
liabilities and shareholders’ equity |
|
$ |
42,000,277 |
|
|
|
28,537,674 |
|
iFRESH INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH FLOWS |
|
|
|
For the Years Ended |
|
|
|
March 31, |
|
|
March 31, |
|
|
|
2017 |
|
|
2016 |
|
Cash flows from
operating activities |
|
|
|
|
|
|
Net income |
|
$ |
1,550,374 |
|
|
$ |
3,641,009 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation
expense |
|
|
1,562,043 |
|
|
|
1,397,031 |
|
Amortization
expense |
|
|
178,957 |
|
|
|
133,334 |
|
Allowance for bad
debt |
|
|
- |
|
|
|
26,931 |
|
Deferred income
taxes |
|
|
(166,221 |
) |
|
|
1,102,505 |
|
Loss on disposal of
property and equipment |
|
|
- |
|
|
|
36,454 |
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(457,478 |
) |
|
|
231,916 |
|
Inventories |
|
|
(1,596,427 |
) |
|
|
1,516,342 |
|
Prepaid
expenses and other current assets |
|
|
(507,409 |
) |
|
|
52,897 |
|
Security
deposits |
|
|
13,131 |
|
|
|
(182,698 |
) |
Accounts
payable |
|
|
1,818,729 |
|
|
|
(1,691,824 |
) |
Deferred
revenue |
|
|
61,240 |
|
|
|
45,903 |
|
Accrued
expenses |
|
|
(296,479 |
) |
|
|
(227,461 |
) |
Taxes
payable |
|
|
75,526 |
|
|
|
1,459,942 |
|
Deferred
rent |
|
|
493,980 |
|
|
|
600,681 |
|
Other
liabilities |
|
|
(155,961 |
) |
|
|
(124,500 |
) |
Net cash
provided by operating activities |
|
|
2,574,005 |
|
|
|
8,018,462 |
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
|
Advances to related
parties |
|
|
(9,854,432 |
) |
|
|
(5,368,002 |
) |
Acquisition of property
and equipment |
|
|
(736,767 |
) |
|
|
(1,961,225 |
) |
Cash proceeds from
acquisition of E-Compass |
|
|
240 |
|
|
|
- |
|
Net cash
used in investing activities |
|
|
(10,590,959 |
) |
|
|
(7,329,227 |
) |
Cash flows from
financing activities |
|
|
|
|
|
|
|
|
Payments
on amount due to shareholder |
|
|
- |
|
|
|
(1,124,407 |
) |
Borrowings against Term loan |
|
|
15,000,000 |
|
|
|
- |
|
Borrowings against lines of credit |
|
|
200,000 |
|
|
|
3,612,138 |
|
Repayments on term loan |
|
|
(3,791,795 |
) |
|
|
- |
|
Repayments on lines of credit borrowings |
|
|
(208,719 |
) |
|
|
(2,884,464 |
) |
Borrowings on notes payable |
|
|
- |
|
|
|
167,658 |
|
Repayments on notes payable |
|
|
(258,254 |
) |
|
|
(335,139 |
) |
Payments
on capital lease obligations |
|
|
(55,198 |
) |
|
|
(67,977 |
) |
Payment
for debt issuance cost |
|
|
(912,500 |
) |
|
|
- |
|
Net cash
used in financing activities |
|
|
9,973,534 |
|
|
|
(632,191 |
) |
Net increase in
cash and cash equivalents |
|
|
1,956,580 |
|
|
|
57,044 |
|
Cash and cash
equivalents at beginning of the year |
|
|
551,782 |
|
|
|
494,738 |
|
Cash and cash
equivalents at the end of the year |
|
$ |
2,508,362 |
|
|
$ |
551,782 |
|
Supplemental
disclosure of cash flow information |
|
|
|
|
|
|
|
|
Cash paid for
interest |
|
$ |
304,483 |
|
|
$ |
218,619 |
|
Cash paid for income
taxes |
|
$ |
1,747,028 |
|
|
$ |
461,435 |
|
Supplemental
disclosure of non-cash investing and financing
activities |
|
|
|
|
|
|
|
|
Capital expenditures
funded by capital lease obligations |
|
$ |
345,567 |
|
|
$ |
6,993 |
|
Contact:
ICR Inc.
Rose Zu
rose.zu@icrinc.com
Tel: 347-436-8368
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