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 second quarter ended September 30, 2017.
Fiscal 2018 Second Quarter Highlights:
- Total net sales increase of 5% to $33.3 million, compared to
$31.9 million in the second quarter of fiscal 2017
- Retail segment net sales increase of 3% to $26.8 million,
compared to $26 million in the second quarter of fiscal 2017
- Total wholesale segment net sales increase of 12% to $6.6
million, compared to $5.9 million in the second quarter of fiscal
2017
- Gross profit for the second quarter ended September 30, 2017
increased by 5%, to $6.7 million compared to $6.4 million in the
prior year period
Mr. Long Deng, Chairman of the board of directors and CEO of
iFresh, commented, “We are pleased to report an increase in total
net sales and double-digit wholesale segment growth in the quarter
ended September 30, 2017. We report decreased net income in the
quarter due to the increase of selling, general and administrative
expenses, and higher interest expenses.
For the remainder of calendar year 2017, we remain committed to
driving sales within existing stores and actively pursuing
expansion opportunities in strategic geographies. The Orlando store
we acquired in July 2017 has contributed $0.8 million revenue to
net retail sales. The operation of our recently acquired stores in
North Miami Beach and Milford will be reflected in our financial
statement for the quarter ended December 31, 2017. We are also in
the process of standardizing the presentation of our storefronts
and improving our brand image and recognition.
We are ready to capture the opportunities in our growing market
in the coming holiday season and expect to improve our bottom-line
performance in the next quarter. We look forward to updating you on
our performance in the near future,” concluded Mr. Deng.
Second Quarter 2018 Results
Net Sales
For the three months ended September 30, 2017, net sales were
$33.3 million, an increase of $1.5 million, or 5%, from $31.9
million for the three months ended September 30, 2016. This was
driven by a retail segment net sales increase of 3%, to $26.8
million, from $26 million in the second quarter of fiscal 2017, and
a wholesale segment net sales increase of $0.7 million, to $6.6
million, from $5.9 million for the three months ended September 30,
2016.
Gross Profit
Gross profit for the second quarter ended September 30, 2017
increased by 5%, to $6.7 million, compared to $6.4 million in the
prior year period. Gross margin was 20.2% and 20.0% for the quarter
ended September 30, 2017 and 2016, respectively.
Selling, General and Administrative
Expenses
SG&A expense was $7.5 million in the three months ended
September 30, 2017, compared to $6.1 million in the same period of
the last fiscal year, which was mainly attributable to increased
payroll expenses and the additional expenses related to two stores
newly acquired on July 13, 2017.
Net Income
Net income was $25,234 for the three months ended September 30,
2017, a decrease of $0.23 million, or 90%, from $0.26 million of
net income for the three months ended September 30, 2016, mainly
attributable to the increase in selling, general and administrative
expenses and higher interest expenses.
Cash, Liquidity and Financial Position
As of September 30, 2017, the Company had cash and cash
equivalents of $1.0 million, compared to $2.5 million as of March
31, 2017. Working capital was $15.7 million as of September 30,
2017 compared to $13.4 million as of March 31, 2017. As of
September 30, 2017, the Company had $1.2 million of bank loans due
within one year.
For the six months ended September 30, 2017, net cash used in
operating activities was $1.0 million. Net cash used in investing
activities was $3.2 million. Net cash provided by financing
activities was $2.7 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.
|
iFRESH INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(UNAUDITED) |
|
|
|
|
|
|
|
|
|
September 30, |
|
|
March 31, |
|
|
|
2017 |
|
|
2017 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
1,016,352 |
|
|
$ |
2,508,362 |
|
Accounts
receivable, net |
|
|
3,345,880 |
|
|
|
2,272,011 |
|
Inventories, net |
|
|
11,322,782 |
|
|
|
9,796,984 |
|
Prepaid
expenses and other current assets |
|
|
1,874,874 |
|
|
|
981,017 |
|
Advances
to related parties |
|
|
16,665,703 |
|
|
|
14,852,083 |
|
Total current
assets |
|
|
34,225,591 |
|
|
|
30,410,457 |
|
Property
and equipment, net |
|
|
10,008,894 |
|
|
|
9,290,674 |
|
Intangible assets, net |
|
|
1,233,335 |
|
|
|
1,300,001 |
|
Security
deposits |
|
|
1,089,777 |
|
|
|
912,346 |
|
Deferred
income taxes |
|
|
350,373 |
|
|
|
86,799 |
|
Total
assets |
|
$ |
46,907,970 |
|
|
$ |
42,000,277 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
14,101,997 |
|
|
|
12,364,071 |
|
Deferred
revenue |
|
|
201,470 |
|
|
|
206,737 |
|
Borrowings against term loan -current, net |
|
|
1,167,764 |
|
|
|
1,144,568 |
|
Notes
payable, current |
|
|
241,434 |
|
|
|
262,578 |
|
Capital
lease obligations, current |
|
|
48,581 |
|
|
|
51,376 |
|
Accrued
expenses |
|
|
802,993 |
|
|
|
730,392 |
|
Taxes
payable |
|
|
1,507,106 |
|
|
|
1,769,398 |
|
Other
payables, current |
|
|
481,653 |
|
|
|
501,213 |
|
Total current
liabilities |
|
|
18,552,998 |
|
|
|
17,030,333 |
|
Borrowings against lines of credit & term loan-non-current,
net |
|
|
15,745,693 |
|
|
|
12,779,838 |
|
Notes
payable, non-current |
|
|
380,784 |
|
|
|
379,376 |
|
Capital
lease obligations, non-current |
|
|
82,013 |
|
|
|
59,907 |
|
Deferred
rent |
|
|
5,893,684 |
|
|
|
5,424,134 |
|
Other
payables, non-current |
|
|
67,800 |
|
|
|
34,800 |
|
Total
liabilities |
|
|
40,722,972 |
|
|
|
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, 14,173,033
and 14,103,033 shares issued and outstanding as of September
30, 2017 and March 31, 2017, respectively |
|
|
1,417 |
|
|
|
1,410 |
|
Additional paid-in capital |
|
|
9,211,426 |
|
|
|
9,075,025 |
|
Accumulated deficit |
|
|
(3,027,845 |
) |
|
|
(2,784,546 |
) |
Total shareholders’
equity |
|
|
6,184,998 |
|
|
|
6,291,889 |
|
Total
liabilities and shareholders’ equity |
|
$ |
46,907,970 |
|
|
|
42,000,277 |
|
|
iFRESH INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED) |
|
|
|
For the three months ended |
|
|
|
|
September 30, |
|
|
September 30, |
|
|
|
|
2017 |
|
|
2016 |
|
|
Net sales |
|
$ |
30,764,800 |
|
|
$ |
29,862,331 |
|
|
Net sales-related
parties |
|
|
2,575,092 |
|
|
|
2,024,569 |
|
|
Total net sales |
|
|
33,339,892 |
|
|
|
31,886,900 |
|
|
Cost of sales |
|
|
22,765,456 |
|
|
|
22,376,055 |
|
|
Cost of sales-related
parties |
|
|
1,960,566 |
|
|
|
1,354,187 |
|
|
Occupancy costs |
|
|
1,893,762 |
|
|
|
1,765,386 |
|
|
Gross
profit |
|
|
6,720,108 |
|
|
|
6,391,272 |
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
|
7,476,204 |
|
|
|
6,130,117 |
|
|
Income
(Loss) from operations |
|
|
(756,096 |
) |
|
|
261,155 |
|
|
Interest expense,
net |
|
|
(208,844 |
) |
|
|
(46,718 |
) |
|
Other income |
|
|
1,017,510 |
|
|
|
263,203 |
|
|
Income(Loss) before income taxes |
|
|
52,570 |
|
|
|
477,640 |
|
|
Income tax provision
(benefit) |
|
|
27,336 |
|
|
|
219,279 |
|
|
Net
income (Loss) |
|
$ |
25,234 |
|
|
$ |
258,361 |
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.002 |
|
|
$ |
0.02 |
|
|
Diluted |
|
$ |
0.002 |
|
|
$ |
0.02 |
|
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
Basic |
|
|
14,166,440 |
|
|
|
12,000,000 |
|
|
Diluted |
|
|
14,166,440 |
|
|
|
12,000,000 |
|
|
|
iFRESH INC. AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(UNAUDITED) |
|
|
|
For the Six months ended |
|
|
|
September 30, |
|
|
September 30, |
|
|
|
2017 |
|
|
2016 |
|
Cash flows from
operating activities |
|
|
|
|
|
|
Net income (loss) |
|
$ |
(243,299 |
) |
|
$ |
436,106 |
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation
expense |
|
|
832,667 |
|
|
|
778,508 |
|
Amortization
expense |
|
|
157,916 |
|
|
|
66,666 |
|
Share based
compensation |
|
|
267,400 |
|
|
|
- |
|
Inventory
provision |
|
|
- |
|
|
|
14,339 |
|
|
|
|
|
|
|
|
|
|
Deferred income tax
expense (benefit) |
|
|
(263,574 |
) |
|
|
130,396 |
|
|
|
|
|
|
|
|
|
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(1,073,869 |
) |
|
|
(170,849 |
) |
Inventories |
|
|
(1,525,798 |
) |
|
|
(546,362 |
) |
Prepaid
expenses and other current assets |
|
|
(893,856 |
) |
|
|
(103,643 |
) |
Security
deposits |
|
|
(98,013 |
) |
|
|
168,695 |
|
Accounts
payable |
|
|
1,737,926 |
|
|
|
1,809,871 |
|
Deferred
revenue |
|
|
(5,268 |
) |
|
|
66,424 |
|
Accrued
expenses |
|
|
72,601 |
|
|
|
24,108 |
|
Taxes
payable |
|
|
(262,292 |
) |
|
|
(93,126 |
) |
Deferred
rent |
|
|
290,653 |
|
|
|
296,116 |
|
Other
liabilities |
|
|
13,439 |
|
|
|
40,199 |
|
Net cash
provided by (used in) operating activities |
|
|
(993,367 |
) |
|
|
2,917,448 |
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
|
Advances made to
related parties |
|
|
(1,943,197 |
) |
|
|
(2,445,980 |
) |
Acquisition of property
and equipment |
|
|
(1,241,261 |
) |
|
|
(607,533 |
) |
Cash proceeds received
from acquisition of Glen Cove |
|
|
5,631 |
|
|
|
- |
|
Net cash
used in investing activities |
|
|
(3,178,827 |
) |
|
|
(3,053,513 |
) |
Cash flows from
financing activities |
|
|
|
|
|
|
|
|
Proceeds
from borrowings against lines of credit |
|
|
2,500,000 |
|
|
|
200,000 |
|
Proceeds
from borrowings against term loan |
|
|
1,050,000 |
|
|
|
- |
|
Repayments on lines of credit borrowings |
|
|
(652,199 |
) |
|
|
(82,000 |
) |
Proceeds
from borrowings on notes payable |
|
|
- |
|
|
|
288,129 |
|
Repayments on notes payable |
|
|
(187,401 |
) |
|
|
(116,857 |
) |
Payments
on capital lease obligations |
|
|
(30,216 |
) |
|
|
(26,345 |
) |
Net cash
provided by financing activities |
|
|
2,680,184 |
|
|
|
262,927 |
|
Net increase
(decrease) in cash and cash equivalents |
|
|
(1,492,010 |
) |
|
|
126,862 |
|
Cash and cash
equivalents at beginning of the period |
|
|
2,508,362 |
|
|
|
551,782 |
|
Cash and cash
equivalents at the end of the period |
|
$ |
1,016,352 |
|
|
$ |
678,644 |
|
Supplemental
disclosure of cash flow information |
|
|
|
|
|
|
|
|
Cash paid for
interest |
|
$ |
327,900 |
|
|
$ |
90,649 |
|
Cash paid for income
taxes |
|
$ |
296,067 |
|
|
$ |
592,325 |
|
Supplemental
disclosure of non-cash investing and financing
activities |
|
|
|
|
|
|
|
|
Capital expenditures
funded by capital lease obligations and notes payable |
|
$ |
217,193 |
|
|
$ |
288,129 |
|
Stock issued for Glen
Cove Acquisition |
|
$ |
645,500 |
|
|
$ |
- |
|
|
Contact:
Dragon Gate Investment Partners LLC
Tel: +1(646)-801-2803
Email: ifmk@dgipl.com
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