Exhibit 99.1
Jerash Holdings Reports Results for Fiscal 2022 Third Quarter;
Increases Revenue Guidance for Fourth Quarter
FAIRFIELD, N.J., February 10, 2022 – Jerash Holdings (US), Inc. (“Jerash”) (NASDAQ: JRSH), which manufactures and exports custom, ready-made sportswear and outerwear for leading global brands, today announced financial results for its fiscal 2022 third quarter, ended December 31, 2021.
Financial Highlights – Fiscal 2022 Third Quarter Versus Fiscal 2021 Third Quarter
| ● | Record revenue of $36.8 million, an increase of 78.2 percent. | |
| ● | Gross profit of $6.9 million, an increase of 186.7 percent. | |
| ● | Gross margin of 18.8 percent, vs. 11.7 percent. | |
| ● | Net income of $1.7 million, or $0.13 per diluted share, vs. $94,000, or $0.01 per diluted share. |
Fiscal 2022 Fourth Quarter Revenue Guidance
| ● | Fiscal 2022 fourth quarter revenue is expected to be in the range of $29 million to $31 million, vs. $23.8 million in fiscal 2021 fourth quarter. |
“Continued strong demand from our global brand customers, along with our expanded manufacturing capacity, resulted in a significantly greater number of shipments during the third quarter,” said Sam Choi, Jerash’s chairman and chief executive officer. “As a result, we reported record high third quarter revenue, along with sharply increased profitability that, in part, reflected increased orders from higher margin, branded products.
“Our strong performance is also attributable to a loyal, dedicated and highly skilled workforce, including approximately 500 new employees who joined Jerash from our recently acquired operation, MK Garments,” said Choi. “It is gratifying that our progress is continuing and highly visible, with our existing factories in Jordan essentially booked through July 2022, and inquiries coming in from new customers that market quality global brands.”
Early in the third quarter, Jerash announced it had completed the acquisition of MK Garments, which operates a 71,000 square-foot manufacturing facility. The company assumed production at the facility in August 2021 and retained its employees.
Gilbert Lee, chief financial officer of Jerash, added, “We will continue to explore opportunities to further expand our manufacturing capacity in a prudent and strategic manner, based on commitments for new business from our existing and established customer prospects. Our balance sheet and cash position remain strong, with an added $6.3 million in net proceeds from a public offering of common stock that was completed in October 2021.”
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Third Quarter Fiscal 2022 Results
Fiscal 2022 third quarter revenue rose 78.2 percent to a record $36.8 million, from $20.7 million in the same period last year, primarily due to higher shipments to the company’s two largest customers resulting from stronger demand and expanded capacity.
Gross profit increased 186.7 percent to $6.9 million in the fiscal 2022 third quarter, from $2.4 million in the same period last year. Gross margin expanded 710 basis points to 18.8 percent in the fiscal 2022 third quarter, up from 11.7 percent in the same period last year, reflecting a higher proportion of export sales to global brand customers in the U.S. with higher profit margin.
Operating expenses totaled $4.6 million in the fiscal 2022 third quarter, versus $2.4 million in the same period last year. The increase was primarily due to higher headcount following the completion of the acquisition of MK Garments in October 2021, an increase in stock-based compensation, and recruitment for new migrant workers.
Operating income rose to $2.3 million in the fiscal 2022 third quarter, up from $48,000 in the same period last year. Net income advanced to $1.7 million, or $0.13 per diluted share, in the fiscal 2022 third quarter, growing from $94,000, or $0.01 per diluted share, in the same period last year. Comprehensive income attributable to Jerash’s common stockholders increased to $1.7 million in the fiscal 2022 third quarter, from $111,000 in the same period last year.
Balance Sheet, Cash Flow and Dividends
Cash and restricted cash totaled $34.4 million, and net working capital was $57.7 million as of December 31, 2021. Net cash provided by operating activities was approximately $4.4 million for the fiscal 2022 third quarter, compared with $2.0 million for the same period last year.
On February 4, 2022, Jerash approved a regular quarterly dividend of $0.05 per share on its common stock, payable on February 22, 2022, to stockholders of record as of February 15, 2022.
Nine-Month Fiscal 2022 Results
Revenue for the first nine months of fiscal 2022 increased 69.2 percent to $112.4 million, from $66.5 million in the same period last year.
Gross profit doubled to $22.6 million for the first nine months of fiscal 2022, compared with $11.3 million for the same period last year. Gross margin increased 300 basis points to 20.1 percent for the first nine months of fiscal 2022, up from 17.1 percent in the same period last year.
Operating expenses for the fiscal 2022 year-to-date period was $12.4 million, compared with $7.1 million for the same period last year. Operating income rose to $10.2 million for the fiscal 2022 year-to-date period, or 9.1 percent of revenue, compared with $4.2 million, or 6.4 percent of revenue, for the same period last year.
Net income for the first nine months of fiscal 2022 advanced to $8.0 million, or $0.69 per diluted share, up from $3.5 million, or $0.31 per diluted share, in the same period last year. Comprehensive income attributable to Jerash’s common stockholders increased 134.5 percent to $8.2 million in the first nine months of fiscal 2022, compared with $3.5 million in the same period last year.
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Conference Call
Jerash will host an investor conference call to discuss its fiscal 2022 third quarter results today, February 10, 2022, at 9:00 a.m. Eastern Time.
Phone: 877-545-0320 (domestic); 973-528-0002 (international)
Conference ID: 479811
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 Holdings (US), Inc. 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 JanSport), New Balance, G-III (which owns brands such as Calvin Klein, Tommy Hilfiger, DKNY, and Guess), American Eagle, Walmart and Costco. Jerash’s existing production facilities comprise six factory units and four warehouses, and Jerash currently employs approximately 5,500 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, 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 new variants thereof, 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 Sfetcu or Roger Pondel
310-279-5980; jsfetcu@pondel.com
# # #
(tables below)
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JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)
|
For the Three Months Ended
December 31, |
For the Nine Months Ended
December 31, |
|||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| Revenue, net | $ | 36,815,023 | $ | 20,663,925 | $ | 112,414,881 | $ | 66,456,998 | ||||||||
| Cost of goods sold | 29,904,287 | 18,253,070 | 89,768,624 | 55,111,823 | ||||||||||||
| Gross Profit | 6,910,736 | 2,410,855 | 22,646,257 | 11,345,175 | ||||||||||||
| Selling, general and administrative expenses | 4,259,796 | 2,362,603 | 11,797,698 | 7,067,109 | ||||||||||||
| Stock-based compensation expenses | 319,101 | - | 634,914 | 42,151 | ||||||||||||
| Total Operating Expenses | 4,578,897 | 2,362,603 | 12,432,612 | 7,109,260 | ||||||||||||
| Income from Operations | 2,331,839 | 48,252 | 10,213,645 | 4,235,915 | ||||||||||||
| Other Income (Expense): | ||||||||||||||||
| Other income (expense), net | (6,843 | ) | 66,357 | (45,119 | ) | 126,535 | ||||||||||
| Total other income (expense), net | (6,843 | ) | 66,357 | (45,119 | ) | 126,535 | ||||||||||
| Net income before provision for income taxes | 2,324,996 | 114,609 | 10,168,526 | 4,362,450 | ||||||||||||
| Income tax expense | 650,907 | 20,273 | 2,119,046 | 894,169 | ||||||||||||
| Net Income | 1,674,089 | 94,336 | 8,049,480 | 3,468,281 | ||||||||||||
| Net loss attributable to noncontrolling interest | 708 | 9 | 1,430 | 23 | ||||||||||||
| Net income attributable to Jerash Holdings (US), Inc.’s Common Stockholders | $ | 1,674,797 | $ | 94,345 | $ | 8,050,910 | $ | 3,468,304 | ||||||||
| Net Income | $ | 1,674,089 | $ | 94,336 | $ | 8,049,480 | $ | 3,468,281 | ||||||||
| Other Comprehensive Income: | ||||||||||||||||
| Foreign currency translation gain | 42,190 | 16,743 | 121,915 | 16,902 | ||||||||||||
| Total Comprehensive Income | 1,716,279 | 111,079 | 8,171,395 | 3,485,183 | ||||||||||||
| Comprehensive income attributable to noncontrolling interest | - | - | - | - | ||||||||||||
| Comprehensive Income Attributable to Jerash Holdings (US), Inc.’s Common Stockholders | $ | 1,716,279 | $ | 111,079 | $ | 8,171,395 | $ | 3,485,183 | ||||||||
| Earnings Per Share Attributable to Common Stockholders: | ||||||||||||||||
| Basic | $ | 0.14 | $ | 0.01 | $ | 0.69 | $ | 0.31 | ||||||||
| Diluted | $ | 0.13 | $ | 0.01 | $ | 0.69 | $ | 0.31 | ||||||||
| Weighted Average Number of Shares | ||||||||||||||||
| Basic | 12,290,840 | 11,325,000 | 11,654,039 | 11,325,000 | ||||||||||||
| Diluted | 12,414,048 | 11,332,552 | 11,696,223 | 11,330,950 | ||||||||||||
| Dividend per share | $ | 0.05 | $ | 0.05 | $ | 0.15 | $ | 0.15 | ||||||||
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JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE
CONDENSED CONSOLIDATED BALANCE SHEETS
|
December 31,
2021 |
March 31,
2021 |
|||||||
| (Unaudited) | ||||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 33,100,891 | $ | 21,126,090 | ||||
| Restricted cash | - | 714,844 | ||||||
| Accounts receivable, net | 8,071,747 | 12,033,268 | ||||||
| Tax recoverable | 143,916 | 379,719 | ||||||
| Inventories | 21,482,341 | 25,035,966 | ||||||
| Prepaid expenses and other current assets | 3,265,983 | 2,329,289 | ||||||
| Investment deposits | 500,000 | - | ||||||
| Advance to suppliers, net | 1,807,348 | 3,036,693 | ||||||
| Total Current Assets | 68,372,226 | 64,655,869 | ||||||
| Restricted cash - non-current | 1,301,588 | 1,020,777 | ||||||
| Long-term deposits | 1,544,792 | 128,690 | ||||||
| Deferred tax assets, net | 148,663 | 148,663 | ||||||
| Property, plant and equipment, net | 8,834,278 | 5,699,506 | ||||||
| Goodwill | 499,282 | - | ||||||
| Right of use assets | 1,857,871 | 1,596,600 | ||||||
| Total Assets | $ | 82,558,700 | $ | 73,250,105 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Credit facilities | $ | - | $ | 612,703 | ||||
| Accounts payable | 2,894,052 | 7,922,839 | ||||||
| Accrued expenses | 3,278,924 | 2,332,867 | ||||||
| Income tax payable - current | 2,161,061 | 1,803,175 | ||||||
| Other payables | 1,246,560 | 1,455,208 | ||||||
| Advance from a customer | 444,165 | - | ||||||
| Operating lease liabilities - current | 650,809 | 400,043 | ||||||
| Total Current Liabilities | 10,675,571 | 14,526,835 | ||||||
| Operating lease liabilities - non-current | 902,404 | 935,773 | ||||||
| Income tax payable - non-current | 961,048 | 1,094,048 | ||||||
| Total Liabilities | 12,539,023 | 16,556,656 | ||||||
| Commitments and Contingencies | ||||||||
| 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; 12,334,318 and 11,332,974 shares issued and outstanding respectively | 12,334 | 11,333 | ||||||
| Additional paid-in capital | 22,205,181 | 15,301,268 | ||||||
| Statutory reserve | 346,315 | 346,315 | ||||||
| Retained earnings | 47,049,143 | 40,748,314 | ||||||
| Accumulated other comprehensive gain (loss) | 106,014 | (15,901 | ) | |||||
| Total Jerash Holdings (US), Inc.’s Stockholder’s Equity | 69,718,987 | 56,391,329 | ||||||
| Noncontrolling interest | 300,690 | 302,120 | ||||||
| Total Equity | 70,019,677 | 56,693,449 | ||||||
| Total Liabilities and Equity | $ | 82,558,700 | $ | 73,250,105 | ||||
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JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
For the Nine Months Ended
December 31, |
||||||||
| 2021 | 2020 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net Income | $ | 8,049,480 | $ | 3,468,281 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 1,511,963 | 1,230,002 | ||||||
| Stock-based compensation expenses | 634,914 | 42,151 | ||||||
| Bad debt expense | 221,584 | 62,860 | ||||||
| Amortization of operating lease right-of-use assets | 569,078 | 500,236 | ||||||
| Changes in operating assets: | ||||||||
| Accounts receivable | 3,739,937 | (4,951,339 | ) | |||||
| Inventories | 3,553,625 | 3,420,003 | ||||||
| Prepaid expenses and other current assets | (936,695 | ) | 193,163 | |||||
| Advance to suppliers | 1,229,345 | (2,037,596 | ) | |||||
| Changes in operating liabilities: | ||||||||
| Accounts payable | (5,028,787 | ) | 1,551,377 | |||||
| Accrued expenses | 946,057 | (14,388 | ) | |||||
| Other payables | (208,649 | ) | 230,888 | |||||
| Advance from a customer | 444,165 | - | ||||||
| Operating lease liabilities | (612,953 | ) | (534,808 | ) | ||||
| Income tax payable | 460,805 | 544,198 | ||||||
| Net cash provided by operating activities | 14,573,869 | 3,705,028 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchases of property, plant and equipment | (2,317,327 | ) | (553,308 | ) | ||||
| Acquisition of MK Garments | (2,700,000 | ) | - | |||||
| Acquisition deposit | (500,000 | ) | - | |||||
| Payment for long-term deposits | (1,544,792 | ) | 34,301 | |||||
| Net cash used in investing activities | (7,062,119 | ) | (519,007 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Dividend payment | (1,750,081 | ) | (1,698,750 | ) | ||||
| Repayment of short-term loan | (612,703 | ) | (234 | ) | ||||
| Proceeds from short-term loan | - | 807,298 | ||||||
| Net proceeds from issuance of common stock | 6,270,000 | - | ||||||
| Net cash provided by (used in) financing activities | 3,907,216 | (891,686 | ) | |||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH | 121,802 | 16,713 | ||||||
| NET INCREASE IN CASH | 11,540,768 | 2,311,048 | ||||||
| CASH, AND RESTRICTED CASH, BEGINNING OF THE PERIOD | 22,861,711 | 26,916,709 | ||||||
| CASH, AND RESTRICTED CASH, END OF THE PERIOD | $ | 34,402,479 | $ | 29,227,757 | ||||
| CASH AND RESTRICTED CASH, END OF PERIOD | 34,402,479 | 29,227,757 | ||||||
| LESS: RESTRICTED CASH | - | 2,709,397 | ||||||
| LESS: NON-CURRENT RESTRICTED CASH | 1,301,588 | 927,338 | ||||||
| CASH, END OF PERIOD | $ | 33,100,891 | $ | 25,591,022 | ||||
| Supplemental disclosure information: | ||||||||
| Cash paid for interest | $ | 147,677 | $ | - | ||||
| Income tax paid | $ | 1,644,546 | $ | 347,689 | ||||
| Non-cash financing activities | ||||||||
| Right of use assets obtained in exchange for operating lease obligations | $ | 821,671 | $ | 524,612 | ||||
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