Positioned for Expected Further Revenue Growth in Fiscal 2020
ROCHESTER, NY / ACCESSWIRE / June 28, 2019 / Jerash Holdings (US), Inc. (Nasdaq: JRSH) (the "Company" or "Jerash"), a producer of high-quality textile goods for leading global brands, today reported record revenue for its fiscal 2019 fourth quarter and full year ended March 31, 2019.
Fiscal Year 2019 and Recent Highlights
- Reported record revenue of $85.0 million in fiscal 2019, an increase of 23% versus $69.3 million in fiscal 2018;
- Generated gross margin of 22.1% in fiscal 2019 as the Company commenced production with multiple new customers and products to diversify market share;
- Reported GAAP net income of $5.1 million, or $0.45 per diluted share;
- Generated adjusted EBITDA of $11.3 million, or $1.01 per diluted share;
- Grew cash and cash equivalents to $27.8 million at year end;
- Commenced production in April 2019 at a fourth manufacturing facility expected to add 1.5 million to 1.8 million pieces per year, bringing Jerash's annual capacity to more than 8.0 million pieces, an anticipated increase of up to 27% annually; and
- Positioned the Company for expected sustainable growth in revenue and GAAP net income through a focus on organic growth, strategic acquisitions and continued operating efficiency.
Fiscal Fourth Quarter 2019 Highlights
- Revenue increased 64% to a record $14.5 million in the fourth quarter of fiscal 2019, from $8.9 million in the prior year fourth quarter, reflecting increased demand from existing customers;
- Generated gross margins of 17.7% related to multiple sample orders from new potential customers expected to increase production with Jerash in the fiscal year ending March 31, 2020 ("fiscal 2020");
- Reported a GAAP net loss of $232,000, or $0.02 per diluted share, for the quarter, compared with net loss of $985,000, or $0.10 per basic share, in the prior year fourth quarter; and
- Generated quarterly adjusted EBITDA1 of $286,000, or $0.03 per diluted share.
Management Commentary
Sam Choi, Chairman and Chief Executive Officer, stated: "We are pleased to report 23% sales growth in fiscal 2019 and record full-year revenue of $85.0 million. We also reported record fourth quarter revenue, increasing 64% to $14.5 million, as we continue to ramp second-half production volume with a number of new potential customers as part of our long-term growth strategy.
"We are particularly excited about a number of sample orders with new potential customers who are already indicating large volumes for the year ahead so as to take advantage of the increased capacity at our fourth factory facility, which we believe is now fully booked for fiscal 2020. We are making notable progress on our goal to increase second half production in order to maximize revenue from Jerash's production facilities, as well as our efforts to further diversify our customer base and product categories.
"Finally, we are excited as we move into fiscal 2020 with expanded capacity, greater customer orders and a strong platform on which to further build our business for the benefit of our shareholders. We are providing an initial outlook for total revenue in excess of $100 million in fiscal 2020, which includes the ramping process for our new facility, and plan to continue in our efforts to accelerate our growth through strategic acquisitions that meet our stringent criteria for growth and profitability."
Outlook
For fiscal 2020, Jerash anticipates continued revenue growth through both expanding business with existing customers and the addition of new customers. Total revenues for fiscal 2020 are projected to be in excess of $100 million, representing what is expected to be at least 17% organic growth over fiscal 2019.
Full Year Financial Results
For the full fiscal year 2019, Jerash reported total revenue of $85.0 million, an increase of 23% from $69.3 million in fiscal 2018. The increase in revenue reflected steady growth of sales from major customers and the addition of new potential customers. Gross margin in fiscal 2019 was 22.1%, compared with 25.9% in fiscal 2018. The change in gross margin includes the effect of share gain programs and sample orders from multiple new potential customers and categories in the second half of fiscal 2019.
Operating expenses for fiscal 2019 were $12.4 million, compared with $6.1 million in fiscal 2018. Operating expenses increased due to increased production, public company expenses following the Company's May 2018 initial public offering (the "IPO"), and $3.6 million in stock-based compensation associated with the IPO.
Operating income for fiscal 2019 was $6.3 million.
GAAP net income for fiscal 2019 was $5.1 million, or $0.45 per diluted share, based on approximately 11.3 million shares outstanding.
Adjusted EBITDA1 for fiscal 2019 was $11.3 million, or $1.01 per diluted share. A reconciliation of adjusted EBITDA to GAAP net income is provided in the tables in this press release.
Fiscal 2018 Fourth Quarter Financial Results
Jerash reported revenue of $14.5 million for the fiscal fourth quarter ended March 31, 2019, a 64% increase from $8.9 million in the prior year fourth quarter. Revenue reflected growth in customer demand for warmer season goods as well as the addition of multiple new potential customers and expansion of orders with existing customers. Operating expenses were $2.8 million for the fiscal fourth quarter, reflecting additional payroll costs for increased headcount to drive revenue growth and public company expenses.
For the quarter, Jerash reported a GAAP net loss of $232,000, or $0.02 per share, compared to net loss of $1.0 million, or $0.10 per share, in the prior year fourth quarter.
Balance Sheet, Cash Flow and Dividends
Cash and restricted cash at March 31, 2019 was $27.8 million, compared with $12.2 million at March 31, 2018. As of March 31, 2019, inventory was $21.1 million, primarily comprised of fabric, work in progress and finished garments, and accounts receivable were $4.0 million. Jerash generated $9.8 million in cash flow from operations in fiscal 2019 and approved its first two quarterly dividends to shareholders.
Conference Call
The Company will conduct a conference call and webcast to review its fiscal 2019 results on Friday, June 28, 2019, at 9:00 a.m. ET. Interested parties in the United States can access the call by dialing 844-369-8770; interested parties outside the United States can access the call by dialing +1-862-298-0840. Callers should dial in at least 5 minutes prior to the all start time. A live and archived webcast will be available online in the investor relations section of Jerash's website at www.jerashholdings.com. A replay of the conference call will be available until July 5, 2019, by calling 877-481-4010 from the United States or +1-919-882-2331 from outside the United States and entering conference ID number 49578.
About Jerash Holdings (US), Inc.
Jerash Holdings (US), Inc. (Nasdaq: JRSH) is a manufacturer utilized by many well-known brands and retailers, such as Walmart, Costco, Hanes, Columbia, VF Corporation (which owns brands such as The North Face, Timberland, Jansport, etc.), and PVH Corp. (which owns brands such as Calvin Klein, Tommy Hilfiger, IZOD, Speedo, etc.). Its production facilities are currently made up of four factory units and three warehouses and currently employ approximately 3,600 people. The total annual capacity at its facilities is expected to be approximately 8.0 million pieces by the end of calendar year 2019. Additional information is available at http://www.jerashholdings.com.
Non-GAAP Financial Information
This news release contains disclosure regarding adjusted EBITDA, which is determined by a method other than in accordance with U.S. GAAP. Adjusted EBITDA may help investors analyze our net income without regard to the effect of one-time stock-based compensation and before the effect of interest expenses, income taxes, and depreciation and amortization. Non-GAAP financial measures have inherent limitations and are not uniformly applied by issuers. Therefore, this non-GAAP financial measure should not be considered in isolation, or as a substitute for comparable measures prepared in accordance with GAAP. The comparable GAAP financial measures and reconciliation to the comparable GAAP financial measures can be found in Appendix A to this document.
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" and similar expressions are intended to identify forward-looking statements. Such statements reflect Jerash's current views with respect to future events and 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. 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:
Richard J. Shaw, Chief Financial Officer
(315) 727-6791
richard.shaw@jerashholdings.com
Matt Kreps, Darrow Associates Investor Relations
(214) 597-8200
mkreps@darrowir.com
1 Adjusted EBITDA is not a United States generally accepted accounting principles ("GAAP") measure. A reconciliation of GAAP to non-GAAP measures is provided in the tables accompanying this release.
JERASH HOLDINGS (US), INC.,SUBSIDIARIES AND AFFILIATECONSOLIDATED BALANCE SHEETS| March 31, | ||||||||
| 2019 | 2018 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 27,182,158 | $ | 8,597,830 | ||||
| Accounts receivable | 4,020,369 | 5,247,090 | ||||||
| Accounts receivable- related party | - | 50,027 | ||||||
| Inventories | 21,074,243 | 20,293,392 | ||||||
| Prepaid expenses and other current assets | 2,630,727 | 1,533,868 | ||||||
| Advance to suppliers | 443,395 | 1,128,079 | ||||||
| Total Current Assets | 55,350,892 | 36,850,286 | ||||||
| Restricted cash | 652,310 | 3,598,280 | ||||||
| Long-term deposits | 810,172 | - | ||||||
| Deferred tax assets | 81,461 | - | ||||||
| Property, plant and equipment, net | 2,356,262 | 2,819,715 | ||||||
| Total Assets | $ | 59,251,097 | $ | 43,268,281 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Credit facilities | $ | 648,711 | $ | 980,195 | ||||
| Accounts payable | 3,378,258 | 4,776,812 | ||||||
| Accrued expenses | 1,539,147 | 1,175,427 | ||||||
| Income tax payable | 1,164,238 | 112,000 | ||||||
| Other payables | 855,527 | 878,987 | ||||||
| Total Current Liabilities | 7,585,881 | 7,923,421 | ||||||
| Income tax payable - non-current | 1,403,087 | 1,288,000 | ||||||
| Total Liabilities | 8,988,968 | 9,211,421 | ||||||
| Commitments and Contingencies (See Note 13) | ||||||||
| Equity | ||||||||
| Preferred stock, $0.001 par value; 500,000 shares authorized; none issued and outstanding | $ | - | $ | - | ||||
| Common stock, $0.001 par value; 30,000,000 and 15,000,000 shares authorized;11,325,000 shares and 9,895,000 shares issued and outstanding as of March 31, 2019 and March 31, 2018, respectively. | 11,325 | 9,895 | ||||||
| Additional paid-in capital | 14,956,767 | 2,742,158 | ||||||
| Statutory reserve | 212,739 | 71,699 | ||||||
| Retained earnings | 34,786,735 | 30,948,006 | ||||||
| Accumulated other comprehensive loss | (14,440 | ) | (24,502 | |||||
| Total Jerash Holdings (US), Inc.'s Shareholders' Equity | 49,953,126 | 33,747,256 | ||||||
| Noncontrolling interest | 309,003 | 309,604 | ||||||
| Total Equity | 50,262,129 | 34,056,860 | ||||||
| Total Liabilities and Equity | $ | 59,251,097 | $ | 43,268,281 | ||||
JERASH HOLDINGS (US), INC.,SUBSIDIARIES AND AFFILIATECONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
| For the Years Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Revenue, net | $ | 84,983,661 | $ | 69,295,698 | ||||
| Cost of goods sold | 66,206,652 | 51,342,020 | ||||||
| Gross Profit | 18,777,009 | 17,953,678 | ||||||
| Selling, general and administrative expenses | 8,834,547 | 6,002,452 | ||||||
| Share-based compensation expenses | 3,593,888 | 116,578 | ||||||
| Total Operating Expenses | 12,428,435 | 6,119,030 | ||||||
| Income from Operations | 6,348,574 | 11,834,648 | ||||||
| Other Income / (Expense): | ||||||||
| Other income / (expense), net | 23,802 | (31,369 | ) | |||||
| Total other income / (expense), net | 23,802 | (31,369 | ) | |||||
| Net Income before provision for income taxes | 6,372,376 | 11,803,279 | ||||||
| Income tax expense | 1,260,861 | 1,400,000 | ||||||
| Net Income | 5,111,515 | 10,403,279 | ||||||
| Net loss attributable to noncontrolling interest | 754 | 6,838 | ||||||
| Net income attributable to Jerash Holdings (US), Inc.'s | ||||||||
| Common Shareholders | $ | 5,112,269 | 10,410,117 | |||||
| Net Income | $ | 5,111,515 | $ | 10,403,279 | ||||
| Other Comprehensive Income / (Loss): | ||||||||
| Foreign currency translation gain / (loss) | 10,215 | (16,262 | ) | |||||
| Total Comprehensive Income | 5,121,730 | 10,387,017 | ||||||
| Comprehensive loss attributable to noncontrolling interest | 601 | 6,993 | ||||||
| Comprehensive Income Attributable to Jerash Holdings (US), Inc.'s Common Shareholders | $ | 5,122,331 | $ | 10,394,010 | ||||
| Earnings Per Share Attributable to Common Shareholders: | ||||||||
| Basic | $ | 0.46 | $ | 1.07 | ||||
| Diluted | $ | 0.45 | $ | 1.07 | ||||
| Weighted Average Number of Shares | ||||||||
| Basic | 11,199,630 | 9,735,651 | ||||||
| Diluted | 11,330,310 | 9,735,651 | ||||||
JERASH HOLDINGS (US), INC.,
SUBSIDIARIES AND AFFILIATE
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
| For the Quarters Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| Revenue, net | $ | 14,479,015 | $ | 8,852,298 | ||||
| Cost of goods sold | 11,910,408 | 6,718,360 | ||||||
| Gross Profit | 2,568,607 | 2,133,938 | ||||||
| Selling, general and administrative expenses | 2,584,443 | 2,133,938 | ||||||
| Share-based compensation expenses | 193,954 | 0 | ||||||
| Total Operating Expenses | 2,778,397 | 1,685,928 | ||||||
| Income from Operations | (209,790 | ) | 448,010 | |||||
| Other Income / (Expense): | ||||||||
| Other income / (expense), net | 4,169 | (32,685 | ) | |||||
| Total other income / (expense), net | 4,169 | (32,685 | ) | |||||
| Net Income before provision for income taxes | (205,621 | ) | 415,325 | |||||
| Income tax expense | 9,861 | 1,400,000 | ||||||
| Net Income | (215,482 | ) | (984,675 | ) | ||||
| Net loss attributable to noncontrolling interest | 8 | 3,993 | ||||||
| Net income (loss) attributable to Jerash Holdings (US), Inc.'s | ||||||||
| Common Shareholders | $ | (215,474 | ) | (980,682 | ) | |||
| Net Income | $ | (215,482 | ) | $ | (984,675 | ) | ||
| Other Comprehensive Income / (Loss): | ||||||||
| Foreign currency translation gain / (loss) | 124 | 14,011 | ||||||
| Total Comprehensive Income | (215,358 | ) | (970,664 | ) | ||||
| Comprehensive loss attributable to noncontrolling interest | 9 | 3,858 | ||||||
| Comprehensive Income Attributable to Jerash Holdings (US), Inc.'s Common Shareholders | $ | (215,349 | ) | $ | (966,806 | ) | ||
| Earnings Per Share Attributable to Common Shareholders: | ||||||||
| Basic | $ | (0.02 | ) | $ | (0.11 | ) | ||
| Diluted | $ | (0.02 | ) | $ | (0.11 | ) | ||
| Weighted Average Number of Shares | ||||||||
| Basic | 11,199,630 | 9,735,651 | ||||||
| Diluted | 11,330,310 | 9,735,651 | ||||||
JERASH HOLDINGS (US), INC.,
SUBSIDIARIES AND AFFILIATE
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Years Ended March 31, | ||||||||
| 2019 | 2018 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net income | $ | 5,111,515 | $ | 10,403,279 | ||||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation and amortization | 1,255,820 | 1,216,973 | ||||||
| Share-based compensation expense | 3,593,888 | 116,578 | ||||||
| Changes in operating assets: | ||||||||
| Accounts receivable | 1,229,239 | (2,472,680 | ) | |||||
| Account receivable - related party | 50,047 | 2,293,190 | ||||||
| Inventories | (770,720 | ) | (1,151,531 | ) | ||||
| Prepaid expenses and other current assets | (1,404,198 | ) | (470,441 | ) | ||||
| Advances to suppliers | 685,197 | (1,128,320 | ) | |||||
| Deferred tax assets | (81,461 | ) | - | |||||
| Changes in operating liabilities: | ||||||||
| Accounts payable | (1,400,533 | ) | (5,472,312 | ) | ||||
| Accrued expenses | 363,037 | 711,332 | ||||||
| Other payables | (23,888 | ) | (282,472 | ) | ||||
| Income tax payable | 1,167,322 | 1,400,000 | ||||||
| Net cash provided by operating activities | 9,775,265 | 5,163,596 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchases of property, plant and equipment | (791,001 | ) | (877,944 | ) | ||||
| Acquisition deposit | (380,000 | ) | - | |||||
| Long-term deposits | (430,113 | ) | - | |||||
| Due from related party | - | 336,746 | ||||||
| Net cash used in investing activities | (1,601,114 | ) | (541,198 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Dividend distribution | (1,132,500 | ) | - | |||||
| Proceeds (repay) from short-term loan | (331,876 | ) | 980,403 | |||||
| Due from shareholders | - | 692,500 | ||||||
| Net proceeds from issuance of common stock | 8,930,300 | - | ||||||
| Warrants issued to the underwriter | 30 | - | ||||||
| Net proceeds from private placement | - | 1,772,845 | ||||||
| Net cash provided by financing activities | 7,465,954 | 3,445,748 | ||||||
| EFFECT OF EXCHANGE RATES CHANGES ON CASH | (1,747 | ) | (4,797 | ) | ||||
| NET INCREASE IN CASH | 15,638,358 | 8,063,349 | ||||||
| CASH, AND RESTRICTED CASH, BEGINNING OF THE YEAR | 12,196,110 | 4,132,761 | ||||||
| CASH, AND RESTRICTED CASH, END OF THE YEAR | $ | 27,834,468 | $ | 12,196,110 | ||||
| CASH, AND RESTRICTED CASH, END OF THE YEAR | 27,834,468 | 12,196,110 | ||||||
| LESS: NON-CURRENT RESTRICTED CASH | 652,310 | 3,598,280 | ||||||
| CASH, END OF PERIOD | $ | 27,182,158 | $ | 8,597,830 | ||||
| Supplemental disclosure information: | ||||||||
| Cash paid for income tax | $ | 175,000 | $ | - | ||||
| Cash paid for interest | $ | 90,867 | $ | 27,292 | ||||
| Non-cash financing activities: | ||||||||
| Warrants issued to underwriters in connection with the IPO in fiscal 2019 and placement agent in connection with the private placement in fiscal 2018 | $ | 160,732 | $ | 161,926 | ||||
| Prepaid stock issuance cost netted with proceeds from the IPO in fiscal 2019 and the private placement in fiscal 2018 | $ | 308,179 | $ | 239,105 | ||||
APPENDIX A – Reconciliation of Non-GAAP Financial Measures
JERASH HOLDINGS (US), INC.,
SUBSIDIARIES AND AFFILIATE
RECONCILIATION OF ADJUSTED EBITDA AND PER SHARE AMOUNTS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
| Year Ended March, 31 | ||||||||
| 2019 | 2018 | |||||||
| Net income (loss) | $ | 5,112 | $ | 10,403 | ||||
| Income taxes | 1,261 | 1,400 | ||||||
| Interest expense | 91 | 27 | ||||||
| Depreciation and amortization | 1,256 | 1,217 | ||||||
| Stock-based compensation expense | 3,594 | 117 | ||||||
| Adjusted EBITDA | $ | 11,314 | $ | 13,164 | ||||
| Adjusted EBITDA Per Share | ||||||||
| Basic | $ | 1.01 | $ | 1.35 | ||||
| Diluted | $ | 1.00 | $ | 1.35 | ||||
| Weighted Average Number of Shares | ||||||||
| Basic | 11,200 | 9,736 | ||||||
| Diluted | 11,330 | 9,736 | ||||||
| Quarter Ended March, 31 | ||||||||
| 2019 | 2018 | |||||||
| Net income (loss) | $ | (215 | ) | $ | (985 | ) | ||
| Income taxes | 10 | 1,400 | ||||||
| Interest expense | 1 | 23 | ||||||
| Depreciation and amortization | 296 | 318 | ||||||
| Stock-based compensation expense | 194 | 0 | ||||||
| Adjusted EBITDA | $ | 286 | $ | 756 | ||||
| Adjusted EBITDA Per Share | ||||||||
| Basic | $ | 0.03 | $ | 0.08 | ||||
| Diluted | $ | 0.03 | $ | 0.08 | ||||
| Weighted Average Number of Shares | ||||||||
| Basic | 11,200 | 9,736 | ||||||
| Diluted | 11,330 | 9,736 | ||||||
SOURCE: Jerash Holdings (US), Inc.
View source version on accesswire.com:
https://www.accesswire.com/550202/Jerash-Reports-Record-Fourth-Quarter-Full-Year-Revenue-in-Fiscal-2019
