EX-99.1 2 ea155145ex99-1_jerashhold.htm PRESS RELEASE DATED FEBRUARY 10, 2022

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  

 

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(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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