iFresh, Inc. (“iFresh” or “the Company”) (Nasdaq:IFMK), a leading
Asian American grocery supermarket chain and online grocer in the
United States, today reported unaudited financial results for the
fiscal 2018 first quarter ended June 30, 2017.
Fiscal 2018 First Quarter Highlights:
- Total net sales increase of 7.4% to $32.5 million, compared to
$30.3 million in the first quarter of fiscal 2017
- Retail segment net sales increase of 2.3% to $26.4 million,
compared to $25.8 million in the first quarter of fiscal 2017
- Total wholesale segment net sales increase of 36.7% to $6.2
million, compared to $4.5 million in the first quarter of fiscal
2017
- Gross margin increase to 21.2% from 20.9% in the first quarter
of fiscal 2017
- Net loss of $0.3 million, or $0.02 per basic and diluted share,
compared to net income of $0.2 million, or $0.01 per diluted
shares, in the first quarter of fiscal 2017
Mr. Long Deng, Chairman of the board of directors and CEO of
iFresh, commented, “We are pleased to report growth in total net
sales, double-digit wholesale segment growth, and continued
improvements in gross margin in the quarter ended June 30, 2017. We
experienced a net loss in the quarter due to increased headcount,
general expenses associated with the expansion of our business and
a one-time $0.3 million share issuance expense, but we expect to
return to profitability in the next quarter as we continue to
centralize procurement and improve cost controls. Our online
business enjoyed stable customer orders, and we continued to drive
customer traffic to our stores through our quality offerings at
competitive prices.
For the next quarter and the remainder of calendar year 2017, we
remain committed to driving sales within existing stores and
actively pursuing expansion opportunities in strategic geographies.
Revenues from our recently announced Orlando store acquisition will
be reflected in our financial statement for the quarter ended
September 30, 2017. We also look forward to beginning a branding
initiative to standardize the presentation of our storefronts and
improve our brand image and recognition.
As we move into our customer holiday season, we believe we are
well-positioned to capture the opportunities in our niche but
growing market. We look forward to updating you on our progress in
the weeks and months ahead,” concluded Mr. Deng.
First Quarter ended June 30, 2017
In the first quarter ended June 30, 2017, total net sales were
$32.5 million, an increase of 7.4% as compared to $30.3 million in
the previous year. This was driven by a retail segment net sales
increase of 2.3%, to $26.4 million from $25.8 million compared to
the first quarter of fiscal 2017, and a total wholesale segment net
sales increase of 36.7%, to $6.2 million from $4.5 million compared
to the first quarter of fiscal 2017.
Gross profit for the first quarter ended June 30, 2017 increased
by 8.7%, to $6.9 million compared to $6.3 million in the prior year
period. Gross margin was 21.2% and 20.9% for the quarter ended June
30, 2017 and 2016, respectively.
SG&A expense was $7.5 million in the first quarter ended
June 30, 2017, compared to $6.2 million in the same period of the
last fiscal year, driven mainly by an increase in headcount,
general expenses due to the expansion of the business and a
one-time $0.3 million share issuance expense.
Loss from operations was $0.6 million compared to net income
from operations of $0.1 million in the quarter ended June 30, 2016.
This was attributed to the increase in SG&A expense.
Net loss was $0.3 million, or $0.02 per basic and diluted share,
compared to net income of $0.2 million, or $0.01 per diluted share,
in the first quarter of fiscal 2017.
Balance Sheet
As of June 30, 2017, the Company had cash and cash equivalents
of $1.2 million compared to $2.5 million as of June 30, 2016.
Working capital was $14.2 million as of June 30, 2017 compared to
$13.4 million as of June 30, 2016. As of June 30, 2017, the Company
had $1.1 million of bank loans due within one year.
For the three months ended June 30, 2017, net cash used in
operating activities was $0.9 million. Net cash used in investing
activities was $1.0 million. Net cash provided by financing
activities was $0.6 million.
About iFresh, Inc.
iFresh Inc., headquartered in New York, New York, is a leading
Asian American grocery supermarket chain and online grocer. With
nine 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
OPERATIONS |
|
(UNAUDITED) |
|
|
|
|
|
For the three months ended |
|
|
|
June 30, 2017 |
|
|
June 30, 2016 |
|
Net sales |
|
$ |
30,127,855 |
|
|
$ |
28,685,300 |
|
Net sales-related
parties |
|
|
2,400,671 |
|
|
|
1,604,592 |
|
Total net sales |
|
|
32,528,526 |
|
|
|
30,289,892 |
|
Cost of sales |
|
|
21,702,740 |
|
|
|
20,778,908 |
|
Cost of sales-related
parties |
|
|
1,991,930 |
|
|
|
1,331,392 |
|
Occupancy costs |
|
|
1,942,842 |
|
|
|
1,840,067 |
|
Gross
profit |
|
|
6,891,014 |
|
|
|
6,339,525 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
|
7,484,823 |
|
|
|
6,225,909 |
|
Income
(Loss) from operations |
|
|
(593,809 |
) |
|
|
113,616 |
|
Interest expenses,
net |
|
|
(167,539 |
) |
|
|
(43,574 |
) |
Other income |
|
|
201,905 |
|
|
|
245,238 |
|
Income(Loss) before income taxes |
|
|
(559,443 |
) |
|
|
315,280 |
|
Income tax provision
(benefit) |
|
|
(290,910 |
) |
|
|
137,535 |
|
Net
income (Loss) |
|
$ |
(268,533 |
) |
|
$ |
177,745 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.02 |
) |
|
$ |
0.01 |
|
Diluted |
|
$ |
(0.02 |
) |
|
$ |
0.01 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
14,116,589 |
|
|
|
12,000,000 |
|
Diluted |
|
|
14,116,589 |
|
|
|
12,000,000 |
|
iFRESH INC. AND SUBSIDIARIES |
|
CONSOLIDATED BALANCE SHEETS
(UNAUDITED) |
|
|
|
|
|
June 30, 2017 |
|
|
March 31, 2017 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
1,173,203 |
|
|
$ |
2,508,362 |
|
Accounts
receivable, net |
|
|
2,527,238 |
|
|
|
2,272,011 |
|
Inventories, net |
|
|
11,084,727 |
|
|
|
9,796,984 |
|
Prepaid
expenses and other current assets |
|
|
1,159,666 |
|
|
|
981,017 |
|
Advances
to related parties |
|
|
15,712,108 |
|
|
|
14,852,083 |
|
Total current
assets |
|
|
31,656,942 |
|
|
|
30,410,457 |
|
Property
and equipment, net |
|
|
9,190,075 |
|
|
|
9,290,674 |
|
Intangible assets, net |
|
|
1,266,668 |
|
|
|
1,300,001 |
|
Security
deposits |
|
|
972,376 |
|
|
|
912,346 |
|
Deferred
income taxes |
|
|
377,554 |
|
|
|
86,799 |
|
Total
assets |
|
$ |
43,463,615 |
|
|
$ |
42,000,277 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
12,758,877 |
|
|
|
12,364,071 |
|
Deferred
revenue |
|
|
207,387 |
|
|
|
206,737 |
|
Bank
loans, current, net |
|
|
1,088,024 |
|
|
|
1,144,568 |
|
Notes
payable, current |
|
|
265,828 |
|
|
|
262,578 |
|
Capital
lease obligations, current |
|
|
58,413 |
|
|
|
51,376 |
|
Accrued
expenses |
|
|
812,873 |
|
|
|
730,392 |
|
Taxes
payable |
|
|
1,769,398 |
|
|
|
1,769,398 |
|
Other
payables, current |
|
|
525,797 |
|
|
|
501,213 |
|
Total current
liabilities |
|
|
17,486,597 |
|
|
|
17,030,333 |
|
Bank
loans, non-current, net |
|
|
13,561,017 |
|
|
|
12,779,838 |
|
Notes
payable, non-current |
|
|
406,833 |
|
|
|
379,376 |
|
Capital
lease obligations, non-current |
|
|
81,180 |
|
|
|
59,907 |
|
Deferred
rent |
|
|
5,587,433 |
|
|
|
5,424,134 |
|
Other
payables, non-current |
|
|
49,800 |
|
|
|
34,800 |
|
Total
liabilities |
|
|
37,172,860 |
|
|
|
35,708,388 |
|
|
|
|
|
|
|
|
|
|
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, 14,123,033
and 14,103,033 shares issued and outstanding as of June 30, 2017
and March 31, 2017, respectively |
|
|
1,412 |
|
|
|
1,410 |
|
Additional paid-in capital |
|
|
9,342,423 |
|
|
|
9,075,025 |
|
Accumulated deficit |
|
|
(3,053,080 |
) |
|
|
(2,784,546 |
) |
Total shareholders’
equity |
|
|
6,290,755 |
|
|
|
6,291,889 |
|
Total
liabilities and shareholders’ equity |
|
$ |
43,463,615 |
|
|
|
42,000,277 |
|
iFRESH INC. AND SUBSIDIARIES |
CONSOLIDATED STATEMENTS OF CASH
FLOWS |
(UNAUDITED) |
|
|
|
For the Three months Ended |
|
|
|
June 30, 2017 |
|
|
June 30, 2016 |
|
Cash flows from
operating activities |
|
|
|
|
|
|
Net income (Loss) |
|
$ |
(268,533 |
) |
|
$ |
177,745 |
|
Adjustments to
reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation
expense |
|
|
403,061 |
|
|
|
379,557 |
|
Amortization
expense |
|
|
78,958 |
|
|
|
33,333 |
|
Deferred income tax
expense (benefit) |
|
|
(290,755 |
) |
|
|
51,848 |
|
Stock based
compensation |
|
|
267,400 |
|
|
|
- |
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(255,227 |
) |
|
|
90,555 |
|
Inventories |
|
|
(1,287,743 |
) |
|
|
(1,382,313 |
) |
Prepaid
expenses and other current assets |
|
|
(178,647 |
) |
|
|
(193,011 |
) |
Security
deposits |
|
|
(60,031 |
) |
|
|
168,695 |
|
Accounts
payable |
|
|
394,804 |
|
|
|
1,978,885 |
|
Deferred
revenue |
|
|
650 |
|
|
|
21,987 |
|
Accrued
expenses |
|
|
82,481 |
|
|
|
238,192 |
|
Taxes
payable |
|
|
- |
|
|
|
(189,973 |
) |
Deferred
rent |
|
|
163,299 |
|
|
|
155,191 |
|
Other
liabilities |
|
|
39,584 |
|
|
|
(98,529 |
) |
Net cash
provided by (used in) operating activities |
|
|
(910,699 |
) |
|
|
1,432,162 |
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
|
Advances to related
parties |
|
|
(860,025 |
) |
|
|
(1,238,905 |
) |
Acquisition of property
and equipment |
|
|
(165,018 |
) |
|
|
(436,162 |
) |
Net cash
used in investing activities |
|
|
(1,025,043 |
) |
|
|
(1,675,067 |
) |
Cash flows from
financing activities |
|
|
|
|
|
|
|
|
Borrowings against lines of credit |
|
|
1,000,000 |
|
|
|
200,000 |
|
Repayments on lines of credit borrowings |
|
|
(320,990 |
) |
|
|
(104,527 |
) |
Borrowings on notes payable |
|
|
- |
|
|
|
157,820 |
|
Repayments on notes payable |
|
|
(65,887 |
) |
|
|
(61,259 |
) |
Payments
on capital lease obligations |
|
|
(12,540 |
) |
|
|
(13,426 |
) |
Net cash
provided by financing activities |
|
|
600,583 |
|
|
|
178,608 |
|
Net decrease in
cash and cash equivalents |
|
|
(1,335,159 |
) |
|
|
(64,297 |
) |
Cash and cash
equivalents at beginning of the period |
|
|
2,508,362 |
|
|
|
551,782 |
|
Cash and cash
equivalents at the end of the period |
|
$ |
1,173,203 |
|
|
$ |
487,485 |
|
Supplemental
disclosure of cash flow information |
|
|
|
|
|
|
|
|
Cash paid for
interest |
|
$ |
120,446 |
|
|
$ |
43,634 |
|
Cash paid for income
taxes |
|
$ |
- |
|
|
$ |
280,001 |
|
Supplemental
disclosure of non-cash investing and financing
activities |
|
|
|
|
|
|
|
|
Capital expenditures
funded by capital lease obligations and notes payable |
|
$ |
137,443 |
|
|
$ |
157,820 |
|
Contact:
ICR Inc.
Rose Zu
rose.zu@icrinc.com
Tel: 347-436-8368
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