Exhibit 99.1
Maison Solutions Reports Fiscal 2024 Second
Quarter
and Six-Month Financial Results
MONTEREY PARK, Calif., December 18, 2023 – Maison Solutions Inc. (“Maison Solutions” or the “Company”), (Nasdaq: MSS), a fast-growing specialty grocery retailer offering traditional Asian food and merchandise to modern U.S. consumers, today announced financial results for the second quarter and first six months of fiscal 2024 ended October 31, 2023.
“Maison Solutions reached an important milestone in the Company’s history with the completion of our IPO in October, and a subsequent private placement in November, better positioning Maison Solutions for future growth,” said John Xu, President and Chief Executive Officer. “We plan to achieve this growth through a combination of organic expansion and strategic acquisitions, while working toward further improving efficiency throughout our organization.
“We recently purchased a robust visualization display management software suite to help our stores reach their full potential by optimizing store design and set-up, including enhanced store layout and display, AI-driven decision making, task and process management, standardization across stores, remote inspection and management, training and staff efficiency, and inventory and SKU management,” said Xu. “As a result, we expect to reduce the cost of operating and opening new stores under our HK Good Fortune brand, and, over the longer term, using the knowledge we gain from implementing the software to open new revenue streams by collaborating with other grocery and convenience stores to help them implement their own digital platforms using the software.”
Fiscal 2024 Second Quarter Financial Results
Total revenues, net were $13.8 million for the fiscal 2024 second quarter, compared with $14.2 million for the prior-year quarter. The decrease mainly was due to competition from two newly opened Asian supermarkets near the Company’s store in San Gabriel as well as reduction in online purchases as a result of customers returning to pre-pandemic shopping patterns and habits. Additionally, the Company generated slightly lower sales from perishable goods, which include meat, seafood, vegetables and fruit. Perishables revenues were $7.5 million for the fiscal 2024 second quarter, versus $7.9 million last year. Revenues for non-perishable goods, which include grocery, liquor, cigarettes, lottery, newspaper, reusable bags, non-food, and health products, of $6.3 million, were similar to the same period last year.
Total cost of revenues, which includes rental expense, depreciation, the direct costs of purchased merchandise, shrinkage costs, store supplies, and inbound shipping costs, decreased 4.0 percent to $10.6 million for the fiscal 2024 second quarter, compared with $11.1 million for the same period last year.
Gross profit for the fiscal 2024 second quarter was $3.1 million, up slightly from the same period last year. Gross margin improved 90 basis points to 22.7 percent, up from 21.8 percent for the fiscal 2023 second quarter.
Operating income was $254,000 for the fiscal 2024 second quarter, compared with $649,000 for the fiscal 2023 second quarter. The reduction was primarily due to higher selling expenses related to an increase in payroll and utility costs.
Net income attributable to Maison Solutions Inc. was $91,000, or $0.01 per diluted share, for the second quarter of fiscal 2024, versus $529,000, or $0.03 per diluted share, for the prior-year period.
At October 31, 2023, the Company had cash and equivalents of $8.6 million, up from $2.6 million at April 30, 2023. Maison Solutions completed an initial public offering on October 10, 2023, generating gross proceeds of $10.0 million. Net cash provided by operating activities was $476,000 for the six months ended October 31, 2023, compared with net cash used in operating activities of $1.1 million for the same period last year.
Six-Month Fiscal Year 2024 Financial Results
Total revenues, net rose 7.6% to $27.5 million for the first six months of fiscal 2024, up from $25.6 million for the prior-year period. The increase mainly was due to the acquisition of Maison Monterey Park in July 2022, partially offset by decreased sales at three of the Company’s other stores. Perishable goods revenues increased to $15.2 million, up from $14.4 million for the first six months of fiscal 2023. Non-perishable goods revenues improved to $12.3 million, from $11.2 million for the first six months of fiscal 2023.
Total cost of revenues were $21.3 million for the fiscal 2024 first half, compared with $20.2 million for the same period last year.
Gross profit for the first six months of fiscal 2024 was $6.3 million, up from $5.4 million for the same period last year. Gross margin improved 157 basis points to 22.6 percent, up from 21.1 percent for the first six months of fiscal 2023.
Operating income was $37,000 for the fiscal 2024 first half, compared with $128,000 for the fiscal 2023 first half. The reduction was principally related to an increase in selling expenses, including payroll and store operating costs, as well as higher general and administrative expenses, mainly due to professional fees related to the Company’s IPO.
Net loss attributable to Maison Solutions Inc. was $13,000, or a loss of $0.00 per diluted share, for the first six months of fiscal 2024, versus a loss of $68,000, or a loss of $0.00 per diluted share, for the prior-year period.
About Maison Solutions Inc.
Maison Solutions Inc. is a fast-growing specialty grocery retailer offering traditional Asian food and merchandise to modern U.S. consumers, particularly to members of Asian-American communities. The Company is committed to providing Asian fresh produce, meat, seafood, and other daily necessities in a manner that caters to traditional Asian-American family values and cultural norms, while also accounting for the new and faster-paced lifestyle of younger generations and the diverse makeup of the communities in which the Company operates. Since its formation in 2019, the Company has acquired equity interests in four traditional Asian supermarkets in the Los Angeles area, and has been operating them under the brand name HK Good Fortune. To learn more about Maison Solutions, please visit the Company’s website at www.maisonsolutionsinc.com.
Cautionary Note Concerning Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including the Company’s ability to grow organically and through acquisitions, improve efficiencies throughout the organization, reduce costs related to operating and opening new stores, and, over the longer term, use knowledge gained from implementing the software to open new revenue streams. No assurance can be given that the proceeds will be used as indicated. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company’s registration statement for the initial public offering filed with the SEC. Copies are available on the SEC’s website at www.sec.gov. Maison Solutions undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.
Investor Relations and Media Contact:
PondelWilkinson Inc.
Judy Lin or Laurie Berman
310-279-5980
info@maisonsolutionsinc.com
(financial tables follow)
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MAISON SOLUTIONS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
| Three Months Ended October 31, | Six Months Ended October 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
| Net Revenues | ||||||||||||||||
| Supermarket | $ | 13,766,204 | $ | 14,168,472 | $ | 27,518,519 | $ | 25,578,160 | ||||||||
| Total Revenues, Net | 13,766,204 | 14,168,472 | 27,518,519 | 25,578,160 | ||||||||||||
| Cost of Revenues | ||||||||||||||||
| Supermarket | 10,642,983 | 11,083,992 | 21,289,202 | 20,188,831 | ||||||||||||
| Total Cost of Revenues | 10,642,983 | 11,083,992 | 21,289,202 | 20,188,831 | ||||||||||||
| Gross Profit | 3,123,221 | 3,084,480 | 6,229,317 | 5,389,329 | ||||||||||||
| Selling Expenses | 2,281,147 | 1,837,816 | 4,545,697 | 4,006,034 | ||||||||||||
| General and Administrative Expenses | 588,251 | 597,221 | 1,646,542 | 1,254,849 | ||||||||||||
| Total Operating Expenses | 2,869,398 | 2,435,037 | 6,192,239 | 5,260,883 | ||||||||||||
| Income from Operations | 253,823 | 649,443 | 37,078 | 128,446 | ||||||||||||
| Other Income, net | (898 | ) | 43,668 | 383,051 | 43,792 | |||||||||||
| Investment (Loss) Income | 15,678 | — | (12,778 | ) | — | |||||||||||
| Interest Expense | (29,965 | ) | (28,759 | ) | (76,531 | ) | (60,347 | ) | ||||||||
| Total Other Income (Expenses), net | (15,185 | ) | 14,909 | 293,742 | (16,555 | ) | ||||||||||
| Income Before Income Taxes | 238,638 | 664,352 | 330,820 | 111,891 | ||||||||||||
| Income Tax Provisions | 147,160 | 72,155 | 266,066 | 90,081 | ||||||||||||
| Net Income | 91,478 | 592,197 | 64,754 | 21,810 | ||||||||||||
| Net Income Attributable to Noncontrolling Interests | 13 | 63,005 | 78,228 | 89,658 | ||||||||||||
| Net (Loss) Income Attributable to Maison Solutions Inc. | $ | 91,465 | $ | 529,192 | $ | (13,474 | ) | $ | (67,848 | ) | ||||||
| (Loss) Income per Share Attributable to Maison Solutions, Inc. - Basic and Diluted | $ | 0.01 | $ | 0.03 | $ | (0.00 | ) | $ | (0.00 | ) | ||||||
| Weighted Average Number of Common Stock Outstanding - Basic and Diluted | 16,780,220 | 16,000,000 | 16,298,913 | 16,000,000 | ||||||||||||
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MAISON SOLUTIONS INC.
CONSOLIDATED BALANCE SHEETS
| October 31, 2023 (Unaudited) | April 30, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets | ||||||||
| Cash and equivalents | $ | 8,601,347 | $ | 2,569,766 | ||||
| Accounts receivable | 554,517 | 315,356 | ||||||
| Accounts receivable - related parties | 160,876 | 289,615 | ||||||
| Inventories, net | 2,826,956 | 2,978,986 | ||||||
| Prepayments | 1,685,550 | 1,547,243 | ||||||
| Other receivables and other current assets | 387,813 | 550,836 | ||||||
| Other receivable - related parties | 33,995 | 33,995 | ||||||
| Total Current Assets | 14,251,054 | 8,285,797 | ||||||
| Restricted cash - non-current | 1,101 | 1,101 | ||||||
| Property and equipment, net | 570,027 | 671,463 | ||||||
| Intangible assets | 1,690,279 | 197,329 | ||||||
| Security deposits | 457,491 | 457,491 | ||||||
| Investment under cost method – related parties | 203,440 | 203,440 | ||||||
| Investment under equity method | 1,427,222 | — | ||||||
| Operating lease right-of-use assets, net | 21,523,046 | 22,545,190 | ||||||
| Goodwill | 2,222,211 | 2,222,211 | ||||||
| Total Assets | $ | 42,345,871 | $ | 34,584,022 | ||||
| LIABILITIES AND STOCKHOLDERS’ DEFICIT | ||||||||
| Current Liabilities | ||||||||
| Accounts payable | $ | 2,955,910 | $ | 3,105,592 | ||||
| Accounts payable - related parties | 465,375 | 465,310 | ||||||
| Note payable | 150,000 | 150,000 | ||||||
| Current portion of loan payables | 201,165 | 370,828 | ||||||
| Accrued expenses and other payables | 955,779 | 867,796 | ||||||
| Contract liabilities | 317,155 | 449,334 | ||||||
| Other payables - related parties | 241,585 | 241,585 | ||||||
| Operating lease liabilities - current | 1,815,206 | 1,761,182 | ||||||
| Income taxes payable | 1,208,539 | 961,034 | ||||||
| Total Current Liabilities | 8,310,714 | 8,372,661 | ||||||
| Long-term loan payables | 2,529,014 | 2,561,299 | ||||||
| Other long-term payables | 111,314 | 105,637 | ||||||
| Operating lease liabilities - non-current | 21,784,685 | 22,711,760 | ||||||
| Deferred tax liability, net | 36,741 | 40,408 | ||||||
| Total Liabilities | 32,772,468 | 33,791,765 | ||||||
| Stockholders’ Equity | ||||||||
| Class A Common stock, $0.0001 par value, 92,000,000 shares authorized; 16,260,000 and 13,760,000 shares issued and outstanding at October 31, 2023 and April 30, 2023, respectively | 1,626 | 1,376 | ||||||
| Class B Common stock, $0.0001 par value, 3,000,000 shares authorized; 2,240,000 shares issued and outstanding | 224 | 224 | ||||||
| Additional paid in capital | 8,716,142 | — | ||||||
| Retained earnings | 509,236 | 522,710 | ||||||
| Total Maison Solutions, Inc. Stockholders’ Equity | 9,227,228 | 524,310 | ||||||
| Noncontrolling interests | 346,175 | 267,947 | ||||||
| Total Stockholders’ Equity | 9,573,403 | 792,257 | ||||||
| Total Liabilities and Stockholders’ Equity | $ | 42,345,871 | $ | 34,584,022 | ||||
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MAISON SOLUTIONS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| Six Months ended October 31, | ||||||||
| 2023 | 2022 | |||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 64,754 | $ | 21,810 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Depreciation and amortization expenses | 127,451 | 244,848 | ||||||
| Bad debt reversal | (105,322 | ) | — | |||||
| Provision for inventory shrinkage reserve | (3,559 | ) | 95,821 | |||||
| Investment loss | 12,778 | — | ||||||
| Changes in deferred taxes | (3,667 | ) | (18,511 | ) | ||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (239,161 | ) | (629,515 | ) | ||||
| Accounts receivable - related party | 129,105 | 213,125 | ||||||
| Inventories | 155,589 | (489,928 | ) | |||||
| Prepayments | (138,307 | ) | 683,543 | |||||
| Other receivables and other current assets | 268,343 | (251,374 | ) | |||||
| Accounts payable | (149,679 | ) | (116,322 | ) | ||||
| Accounts payable - related party | (301 | ) | (432,360 | ) | ||||
| Accrued expenses and other payables | 87,983 | (494,035 | ) | |||||
| Contract Liabilities | (132,180 | ) | (106,202 | ) | ||||
| Operating lease liabilities | 149,093 | 100,470 | ||||||
| Taxes payables | 247,505 | 104,120 | ||||||
| Other long-term payables | 5,677 | 18,368 | ||||||
| Net cash provided by (used in) operating activities | 476,102 | (1,056,142 | ) | |||||
| Cash flows from investing activities | ||||||||
| Payment for acquisition of subsidiary | — | (2,500,000 | ) | |||||
| Payments of equipment purchase | (18,965 | ) | (12,500 | ) | ||||
| Payments of intangible assets purchase | (1,500,000 | ) | — | |||||
| Loans repaid from third parties | — | 3,977,134 | ||||||
| Investment into Good Fortune Arcadia | (1,440,000 | ) | — | |||||
| Net cash (used in) provided by investing activities | (2,958,965 | ) | 1,464,634 | |||||
| Cash flows from financing activities | ||||||||
| Bank overdraft | — | (281,941 | ) | |||||
| Repayments on loan payables | (201,948 | ) | (177,526 | ) | ||||
| Repayments to related parties | — | (62,932 | ) | |||||
| Borrowings from related parties | — | 526,268 | ||||||
| Net proceeds from issuance of common stock - IPO | 8,716,392 | — | ||||||
| Net cash provided by financing activities | 8,514,444 | 3,869 | ||||||
| Net changes in cash and restricted cash | 6,031,581 | 412,361 | ||||||
| Cash and restricted cash at the beginning of the period | 2,570,867 | 972,431 | ||||||
| Cash and restricted cash at the end of the period | $ | 8,602,448 | $ | 1,384,792 | ||||
| Supplemental disclosure of cash and restricted cash | ||||||||
| Cash | $ | 8,601,347 | $ | 1,383,691 | ||||
| Restricted cash | 1,101 | 1,101 | ||||||
| Total cash and restricted cash | $ | 8,602,448 | $ | 1,384,792 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | 63,683 | $ | 14,357 | ||||
| Cash paid for income taxes | $ | 22,228 | $ | 800 | ||||
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