EX-99.1 2 ea020859801ex99-1_jerash.htm PRESS RELEASE DATED JUNE 27, 2024

Exhibit 99.1

 

 

Jerash Holdings Reports Financial Results

for Fiscal 2024 Fourth Quarter and Full Year

 

--Fourth Quarter Results Impacted by Production Delays Due to Red Sea Logistics Disruptions--

--Outlook for First Quarter and Fiscal 2025 Improves--

 

FAIRFIELD, N.J., June 27, 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 2024 fourth quarter and full year, ended March 31, 2024.

 

“Continuing attacks on ships in the Red Sea, where approximately 12 percent of the world’s trade passes, again caused supply chain disruptions throughout the region,” said Sam Choi, Jerash’s chairman and chief executive officer. “Shipments of raw materials to Jerash were delayed, which impacted the Company’s production for its global customers and, in turn, Jerash’s financial performance for the fiscal fourth quarter and full year. Certain orders that could not be completed during the fourth quarter were shipped in the fiscal 2025 first quarter.

 

“Gross margin was substantially down for the fiscal fourth quarter due to significantly higher ocean freight and transportation costs from Asia to Jordan. However, we have identified and are now aggressively increasing our sourcing of raw materials from Turkey and Egypt to circumvent shipping routes and related logistics costs. During the fourth quarter, we were able to keep our factories busy by obtaining local orders, albeit with much lower margin, keeping our workforce employed and allowing us to be ready for growth in the new fiscal year.

 

“On a positive note, we are experiencing a tangible increase in purchase orders from long-term customers. As well, we are receiving an influx of business from new, high-profile global brands, both directly, and through our joint venture with Busana. Our manufacturing facilities currently are fully booked into the second fiscal quarter, which gives us renewed confidence as we enter the new fiscal year,” Choi added.

 

Outlook

 

●Revenue for the fiscal 2025 first quarter is expected to increase by 14-15 percent from the same quarter last year; full year revenue is expected to increase by 15-18 percent.

 

●Gross margin goal for fiscal 2025 year is currently expected to be around 13-15 percent, subject to logistics and shipping charges and final product mix of shipments.

 

 

 

 

Fiscal 2024 Fourth Quarter Results

 

Fiscal 2024 fourth quarter revenue was $21.6 million, down 9.3 percent from $23.8 million in the same quarter last year, primarily due to reduced shipments to our major customers in the U.S. caused by inadequate materials for production due to logistical disruptions and extended supply chain lead times in the Middle East. Revenue was negatively impacted by approximately $3 to $4 million of orders, with shipments delayed to the fiscal 2025 first quarter to customers in the U.S.

 

Gross profit was $1.5 million for the fiscal 2024 fourth quarter, compared with $2.5 million in the same quarter last year. Gross margin for fiscal 2024 fourth quarter decreased to 7.0 percent, from 10.3 percent in the same period last year. The decrease in gross margin was primarily driven by higher ocean freight and transportation costs, as well as manufacturing lower margin orders from local customers, to offset the decrease in shipments to major customers in the U.S.

 

Operating expenses totaled $4.5 million in the fiscal 2024 fourth quarter, compared with $4.3 million in the same quarter last year.

 

Operating loss was $3.0 million for the fiscal 2024 fourth quarter, compared with operating loss of $1.8 million for the same quarter last year.

 

Total other expenses in the fiscal 2024 fourth quarter were $134,000, compared with $86,000 for the same quarter last year.

 

Net loss was $3.1 million, or $0.25 per share, for the fiscal 2024 fourth quarter, compared with net loss of $2.0 million, or $0.16 per share, in the same period last year.

 

Comprehensive loss attributable to Jerash’s common stockholders totaled $3.4 million in the fiscal 2024 fourth quarter, compared with comprehensive loss totaled $1.9 million in the same quarter last year.

 

Balance Sheet, Cash Flow and Dividends

 

Cash and restricted cash totaled $14.0 million, and net working capital was $36.1 million as of March 31, 2024. Net cash provided by operating activities was approximately $2.5 million for fiscal 2024, compared with $10.8 million in fiscal 2023.

 

On May 21, 2024, the board of directors of Jerash approved a regular quarterly dividend of $0.05 per share on the Company’s common stock. The dividend was paid on June 7, 2024, to stockholders of record as of May 31, 2024.

 

Fiscal 2024 Full Year Results

 

Fiscal 2024 revenue decreased to $117.2 million, from $138.1 million in fiscal 2023. The decrease in revenue was primarily due to reduced shipments to the Company’s two major customers in the U.S., as well as the supply chain logistics disruptions with the Red Sea crisis.

 

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Gross profit in fiscal 2024 totaled $16.9 million, compared with $21.8 million in fiscal 2023. Gross margin was 14.4 percent in fiscal 2024, compared with 15.8 percent in fiscal 2023.

 

Operating expenses in fiscal 2024 were $17.6 million, compared with $17.4 million in fiscal 2023. Operating loss in fiscal 2024 was $665,000, compared with operating income of $4.4 million in fiscal 2023.

 

Net loss for fiscal 2024 amounted to $2.0 million, or $0.16 per share, compared with net income of $2.4 million, or $0.19 per share, in fiscal 2023.

 

Comprehensive loss attributable to Jerash’s common stockholders was $2.4 million in fiscal 2024, compared with comprehensive income of $2.2 million in fiscal 2023.

 

Conference Call

 

Jerash Holdings will host an investor conference call to discuss its fiscal 2024 fourth quarter and full year results today, June 27, 2024, at 9:00 a.m. Eastern Time. 

 

Phone:888-506-0062 (domestic); 973-528-0011 (international)
Conference ID:933383

 

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 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 U.S. 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 U.S. 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 

 

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(tables below)

 

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JERASH HOLDINGS (US), INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

FOR THE THREE- AND TWELVE-MONTHS ENDED MARCH 31, 2024 AND 2023

 

  

For the Three Months Ended

March 31,

  

For the Fiscal Years Ended

March 31,

 
   2024   2023   2024   2023 
   (Unaudited)   (Unaudited)         
                 
Revenue, net  $21,574,454   $23,774,006   $117,187,340   $138,063,309 
Cost of goods sold   20,073,952    21,321,046    100,284,991    116,273,569 
Gross Profit   1,500,502    2,452,960    16,902,349    21,789,740 
                     
Selling, general and administrative expenses   4,262,721    4,164,229    16,581,256    16,960,978 
Stock-based compensation expenses   258,350    119,078    986,048    413,900 
Total Operating Expenses   4,521,071    4,283,307    17,567,304    17,374,878 
                     
(Loss) income from Operations   (3,020,569)   (1,830,347)   (664,955)   4,414,862 
                     
Other (Expense) Income:                    
Interest expenses   (220,440)   (267,800)   (1,203,596)   (768,131)
Other income, net   86,493    181,521    499,120    437,002 
Total other expense, net   (133,947)   (86,279)   (704,476)   (331,129)
                     
Net (loss) income before provision for income taxes   (3,154,516)   (1,916,626)   (1,369,431)   4,083,733 
                     
Income tax (income) expenses   (16,361)   67,703    672,495    1,664,110 
                     
Net (loss) income   (3,138,155)   (1,984,329)   (2,041,926)   2,419,623 
                     
Net loss attributable to noncontrolling interest   49,397    -    36,024    - 
                     
Net (loss) income attributable to Jerash Holdings (US), Inc’s Common Stockholders  $(3,088,758)  $(1,984,329)  $(2,005,902)  $2,419,623 
                     
Net (loss) income  $(3,138,155)  $(1,984,329)  $(2,041,926)  $2,419,623 
Other Comprehensive (Loss) Income:                    
Foreign currency translation (loss) gain   (313,761)   45,692    (369,090)   (250,374)
Total Comprehensive (Loss) Income   (3,451,916)   (1,938,637)   (2,411,016)   2,169,249 
Comprehensive loss attributable to noncontrolling interest   49,397    -    36,024    - 
Comprehensive (Loss) Income Attributable to Jerash Holdings (US), Inc.'s Common Stockholders  $(3,402,519)  $(1,938,637)  $(2,374,992)  $2,169,249 
                     
(Loss) Earnings Per Share Attributable to Common Stockholders:                    
Basic and diluted  $(0.25)  $(0.16)  $(0.16)  $0.19 
                     
Weighted Average Number of Shares                    
Basic   12,294,840    12,525,166    12,294,840    12,635,785 
Diluted   12,294,840    12,525,166    12,294,840    12,675,351 
                     
Dividend per share  $0.05   $0.05   $0.20   $0.20 

 

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JERASH HOLDINGS (US), INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

   March 31, 2024   March 31, 2023 
         
ASSETS        
Current Assets:        
Cash  $12,428,369   $17,801,614 
Accounts receivable, net   5,417,513    2,240,537 
Bills receivable   -    87,573 
Inventories   27,241,573    32,656,833 
Prepaid expenses and other current assets   2,746,068    2,964,578 
Advances to suppliers, net   3,086,137    1,533,091 
Total Current Assets   50,919,660    57,284,226 
           
Restricted cash – non-current   1,608,498    1,609,989 
Long-term deposits   802,306    841,628 
Deferred tax assets, net   158,329    153,873 
Property, plant, and equipment, net   24,998,096    22,355,574 
Goodwill   499,282    499,282 
Operating lease right of use assets   1,259,395    974,761 
Total Assets  $80,245,566   $83,719,333 
LIABILITIES AND EQUITY          
           
Current Liabilities:          
Accounts payable  $6,340,237   $5,782,570 
Accrued expenses   4,175,843    2,930,533 
Income tax payable – current   1,647,199    2,846,201 
Other payables   2,234,870    1,477,243 
Deferred revenue   10,200    928,393 
Operating lease liabilities – current   370,802    481,502 
Total Current Liabilities   14,779,151    14,446,442 
           
Operating lease liabilities – non-current   618,302    287,247 
Income tax payable – non-current   417,450    751,410 
Total Liabilities   15,814,903    15,485,099 
           
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   23,917,094    22,931,046 
Treasury stock, 239,478 shares   (1,169,046)   (1,169,046)
Statutory reserve   413,821    410,847 
Retained earnings   41,704,238    46,172,082 
Accumulated other comprehensive loss   (492,319)   (123,229)
Total Jerash Holdings (US), Inc.’ Stockholders’ Equity   64,386,322    68,234,234 
           
Noncontrolling interest   44,341    - 
Total Equity   64,430,663    68,234,234 
           
Total Liabilities and Equity  $80,245,566   $83,719,333 

 

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JERASH HOLDINGS (US), INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

   For the Fiscal Years Ended March 31, 
   2024   2023 
CASH FLOWS FROM OPERATING ACTIVITIES        
Net (loss) income  $(2,041,926)  $2,419,623 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:          
Depreciation   2,539,736    2,430,692 
Stock-based compensation expenses   986,048    413,900 
Bad debt recovery   (187,762)   - 
Amortization of operating lease right-of-use assets   759,764    989,220 
Changes in operating assets:          
Accounts receivable   (2,989,214)   8,808,532 
Bills receivable   87,573    (87,573)
Inventories   5,415,260    (4,401,654)
Prepaid expenses and other current assets   187,140    285,782 
Advance to suppliers   (1,553,046)   (248,490)
Deferred tax assets   (4,456)   198,717 
Changes in operating liabilities:          
Accounts payable   557,667    942,345 
Accrued expenses   1,245,310    (185,421)
Other payables   757,627    (801,574)
Deferred revenue   (918,193)   928,393 
Operating lease liabilities   (824,043)   (977,584)
Income tax payable   (1,532,944)   92,226 
Net cash provided by operating activities   2,484,541    10,807,134 
           
CASH FLOWS FROM INVESTING ACTIVITIES          
Purchases of property, plant and equipment   (1,241,226)   (722,770)
Payments for construction of properties   (3,600,948)   (5,084,044)
Acquisition of Ever Winland   -    (5,100,000)
Acquisition of Kawkab Venus   -    (2,200,000)
Payment for long-term deposits   (300,762)   (668,337)
Net cash used in investing activities   (5,142,936)   (13,775,151)
           
CASH FLOWS FROM FINANCING ACTIVITIES          
Dividend payments   (2,458,968)   (2,484,127)
Investment of noncontrolling interest   31,365    - 
Share repurchase   -    (1,169,046)
Repayment from short-term loan   (7,545,829)   (7,197,995)
Repayment to a related party   -    (300,166)
Proceeds from short-term loan   7,545,829    7,197,995 
Net cash used in financing activities   (2,427,603)   (3,953,339)
           
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND RESTRICTED CASH   (288,738)   (250,529)
           
NET DECREASE IN CASH AND RESTRICTED CASH   (5,374,736)   (7,171,885)
           
CASH, AND RESTRICTED CASH, BEGINNING OF THE YEAR   19,411,603    26,583,488 
           
CASH, AND RESTRICTED CASH, END OF THE YEAR  $14,036,867   $19,411,603 
           
CASH, AND RESTRICTED CASH, END OF THE YEAR   14,036,867    19,411,603 
LESS: NON-CURRENT RESTRICTED CASH   1,608,498    1,609,989 
CASH, END OF THE YEAR  $12,428,369   $17,801,614 
           
Supplemental disclosure information:          
Cash paid for interest  $1,203,596   $768,131 
Income tax paid, net  $2,253,410   $1,747,635 
           
Non-cash investing and financing activities          
Equipment obtained by utilizing long-term deposit  $354,917   $237,412 
Acquisition of Kawkab Venus by utilizing long-term deposit  $-   $500,000 
Operating lease right of use assets obtained in exchange for operating lease obligations  $1,058,820   $190,654 

  

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