NEW YORK, Aug. 15, 2017 (GLOBE NEWSWIRE) -- iFresh, Inc. (“iFresh” or “the Company”) (Nasdaq:IFMK), a leading Asian American grocery supermarket chain and online grocer in the United States, today reported unaudited financial results for the fiscal 2018 first quarter ended June 30, 2017.
Fiscal 2018 First Quarter Highlights:
- Total net sales increase of 7.4% to $32.5 million, compared to $30.3 million in the first quarter of fiscal 2017
- Retail segment net sales increase of 2.3% to $26.4 million, compared to $25.8 million in the first quarter of fiscal 2017
- Total wholesale segment net sales increase of 36.7% to $6.2 million, compared to $4.5 million in the first quarter of fiscal 2017
- Gross margin increase to 21.2% from 20.9% in the first quarter of fiscal 2017
- Net loss of $0.3 million, or $0.02 per basic and diluted share, compared to net income of $0.2 million, or $0.01 per diluted shares, in the first quarter of fiscal 2017
Mr. Long Deng, Chairman of the board of directors and CEO of iFresh, commented, “We are pleased to report growth in total net sales, double-digit wholesale segment growth, and continued improvements in gross margin in the quarter ended June 30, 2017. We experienced a net loss in the quarter due to increased headcount, general expenses associated with the expansion of our business and a one-time $0.3 million share issuance expense, but we expect to return to profitability in the next quarter as we continue to centralize procurement and improve cost controls. Our online business enjoyed stable customer orders, and we continued to drive customer traffic to our stores through our quality offerings at competitive prices.
For the next quarter and the remainder of calendar year 2017, we remain committed to driving sales within existing stores and actively pursuing expansion opportunities in strategic geographies. Revenues from our recently announced Orlando store acquisition will be reflected in our financial statement for the quarter ended September 30, 2017. We also look forward to beginning a branding initiative to standardize the presentation of our storefronts and improve our brand image and recognition.
As we move into our customer holiday season, we believe we are well-positioned to capture the opportunities in our niche but growing market. We look forward to updating you on our progress in the weeks and months ahead,” concluded Mr. Deng.
First Quarter ended June 30, 2017
In the first quarter ended June 30, 2017, total net sales were $32.5 million, an increase of 7.4% as compared to $30.3 million in the previous year. This was driven by a retail segment net sales increase of 2.3%, to $26.4 million from $25.8 million compared to the first quarter of fiscal 2017, and a total wholesale segment net sales increase of 36.7%, to $6.2 million from $4.5 million compared to the first quarter of fiscal 2017.
Gross profit for the first quarter ended June 30, 2017 increased by 8.7%, to $6.9 million compared to $6.3 million in the prior year period. Gross margin was 21.2% and 20.9% for the quarter ended June 30, 2017 and 2016, respectively.
SG&A expense was $7.5 million in the first quarter ended June 30, 2017, compared to $6.2 million in the same period of the last fiscal year, driven mainly by an increase in headcount, general expenses due to the expansion of the business and a one-time $0.3 million share issuance expense.
Loss from operations was $0.6 million compared to net income from operations of $0.1 million in the quarter ended June 30, 2016. This was attributed to the increase in SG&A expense.
Net loss was $0.3 million, or $0.02 per basic and diluted share, compared to net income of $0.2 million, or $0.01 per diluted share, in the first quarter of fiscal 2017.
Balance Sheet
As of June 30, 2017, the Company had cash and cash equivalents of $1.2 million compared to $2.5 million as of June 30, 2016. Working capital was $14.2 million as of June 30, 2017 compared to $13.4 million as of June 30, 2016. As of June 30, 2017, the Company had $1.1 million of bank loans due within one year.
For the three months ended June 30, 2017, net cash used in operating activities was $0.9 million. Net cash used in investing activities was $1.0 million. Net cash provided by financing activities was $0.6 million.
About iFresh, Inc.
iFresh Inc., headquartered in New York, New York, is a leading Asian American grocery supermarket chain and online grocer. With nine retail supermarkets along the US eastern seaboard and two in-house wholesale businesses strategically located in cities with a highly concentrated Asian population, the Company aims to satisfy the increasing demands of Asian Americans, whose purchasing power has been growing rapidly, for fresh and culturally unique produce, seafood and other groceries that are not found in mainstream supermarkets. With an in-house proprietary delivery network, online sales channel and strong relations with farms that produce Chinese specialty vegetables and fruits, iFresh is able to offer fresh, high-quality specialty perishables at competitive prices to a growing base of customers. For more information, please visit: http://www.ifreshmarket.com/.
Forward-Looking Statements
This announcement contains forward-looking statements. Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Examples of forward-looking statements in this announcement include, but are not limited to, statements regarding our disclosure concerning the Company’s operations, cash flows, financial position and dividend policy.
Financial statements below:
| iFRESH INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
| (UNAUDITED) | ||||||||
| For the three months ended | ||||||||
| June 30, 2017 | June 30, 2016 | |||||||
| Net sales | $ | 30,127,855 | $ | 28,685,300 | ||||
| Net sales-related parties | 2,400,671 | 1,604,592 | ||||||
| Total net sales | 32,528,526 | 30,289,892 | ||||||
| Cost of sales | 21,702,740 | 20,778,908 | ||||||
| Cost of sales-related parties | 1,991,930 | 1,331,392 | ||||||
| Occupancy costs | 1,942,842 | 1,840,067 | ||||||
| Gross profit | 6,891,014 | 6,339,525 | ||||||
| Selling, general and administrative expenses | 7,484,823 | 6,225,909 | ||||||
| Income (Loss) from operations | (593,809 | ) | 113,616 | |||||
| Interest expenses, net | (167,539 | ) | (43,574 | ) | ||||
| Other income | 201,905 | 245,238 | ||||||
| Income(Loss) before income taxes | (559,443 | ) | 315,280 | |||||
| Income tax provision (benefit) | (290,910 | ) | 137,535 | |||||
| Net income (Loss) | $ | (268,533 | ) | $ | 177,745 | |||
| Net income (loss) per share: | ||||||||
| Basic | $ | (0.02 | ) | $ | 0.01 | |||
| Diluted | $ | (0.02 | ) | $ | 0.01 | |||
| Weighted average shares outstanding: | ||||||||
| Basic | 14,116,589 | 12,000,000 | ||||||
| Diluted | 14,116,589 | 12,000,000 | ||||||
| iFRESH INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED BALANCE SHEETS (UNAUDITED) | ||||||||
| June 30, 2017 | March 31, 2017 | |||||||
| ASSETS | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,173,203 | $ | 2,508,362 | ||||
| Accounts receivable, net | 2,527,238 | 2,272,011 | ||||||
| Inventories, net | 11,084,727 | 9,796,984 | ||||||
| Prepaid expenses and other current assets | 1,159,666 | 981,017 | ||||||
| Advances to related parties | 15,712,108 | 14,852,083 | ||||||
| Total current assets | 31,656,942 | 30,410,457 | ||||||
| Property and equipment, net | 9,190,075 | 9,290,674 | ||||||
| Intangible assets, net | 1,266,668 | 1,300,001 | ||||||
| Security deposits | 972,376 | 912,346 | ||||||
| Deferred income taxes | 377,554 | 86,799 | ||||||
| Total assets | $ | 43,463,615 | $ | 42,000,277 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 12,758,877 | 12,364,071 | |||||
| Deferred revenue | 207,387 | 206,737 | ||||||
| Bank loans, current, net | 1,088,024 | 1,144,568 | ||||||
| Notes payable, current | 265,828 | 262,578 | ||||||
| Capital lease obligations, current | 58,413 | 51,376 | ||||||
| Accrued expenses | 812,873 | 730,392 | ||||||
| Taxes payable | 1,769,398 | 1,769,398 | ||||||
| Other payables, current | 525,797 | 501,213 | ||||||
| Total current liabilities | 17,486,597 | 17,030,333 | ||||||
| Bank loans, non-current, net | 13,561,017 | 12,779,838 | ||||||
| Notes payable, non-current | 406,833 | 379,376 | ||||||
| Capital lease obligations, non-current | 81,180 | 59,907 | ||||||
| Deferred rent | 5,587,433 | 5,424,134 | ||||||
| Other payables, non-current | 49,800 | 34,800 | ||||||
| Total liabilities | 37,172,860 | 35,708,388 | ||||||
| Commitments and contingencies | ||||||||
| Shareholders’ equity | ||||||||
| Preferred shares, $.0001 par value, 1,000,000 shares authorized; none issued. | - | - | ||||||
| Common stock, $0.0001 par value; 100,000,000 shares authorized, 14,123,033 and 14,103,033 shares issued and outstanding as of June 30, 2017 and March 31, 2017, respectively | 1,412 | 1,410 | ||||||
| Additional paid-in capital | 9,342,423 | 9,075,025 | ||||||
| Accumulated deficit | (3,053,080 | ) | (2,784,546 | ) | ||||
| Total shareholders’ equity | 6,290,755 | 6,291,889 | ||||||
| Total liabilities and shareholders’ equity | $ | 43,463,615 | 42,000,277 | |||||
| iFRESH INC. AND SUBSIDIARIES | ||||||||
| CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
| (UNAUDITED) | ||||||||
| For the Three months Ended | ||||||||
| June 30, 2017 | June 30, 2016 | |||||||
| Cash flows from operating activities | ||||||||
| Net income (Loss) | $ | (268,533 | ) | $ | 177,745 | |||
| Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
| Depreciation expense | 403,061 | 379,557 | ||||||
| Amortization expense | 78,958 | 33,333 | ||||||
| Deferred income tax expense (benefit) | (290,755 | ) | 51,848 | |||||
| Stock based compensation | 267,400 | - | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | (255,227 | ) | 90,555 | |||||
| Inventories | (1,287,743 | ) | (1,382,313 | ) | ||||
| Prepaid expenses and other current assets | (178,647 | ) | (193,011 | ) | ||||
| Security deposits | (60,031 | ) | 168,695 | |||||
| Accounts payable | 394,804 | 1,978,885 | ||||||
| Deferred revenue | 650 | 21,987 | ||||||
| Accrued expenses | 82,481 | 238,192 | ||||||
| Taxes payable | - | (189,973 | ) | |||||
| Deferred rent | 163,299 | 155,191 | ||||||
| Other liabilities | 39,584 | (98,529 | ) | |||||
| Net cash provided by (used in) operating activities | (910,699 | ) | 1,432,162 | |||||
| Cash flows from investing activities | ||||||||
| Advances to related parties | (860,025 | ) | (1,238,905 | ) | ||||
| Acquisition of property and equipment | (165,018 | ) | (436,162 | ) | ||||
| Net cash used in investing activities | (1,025,043 | ) | (1,675,067 | ) | ||||
| Cash flows from financing activities | ||||||||
| Borrowings against lines of credit | 1,000,000 | 200,000 | ||||||
| Repayments on lines of credit borrowings | (320,990 | ) | (104,527 | ) | ||||
| Borrowings on notes payable | - | 157,820 | ||||||
| Repayments on notes payable | (65,887 | ) | (61,259 | ) | ||||
| Payments on capital lease obligations | (12,540 | ) | (13,426 | ) | ||||
| Net cash provided by financing activities | 600,583 | 178,608 | ||||||
| Net decrease in cash and cash equivalents | (1,335,159 | ) | (64,297 | ) | ||||
| Cash and cash equivalents at beginning of the period | 2,508,362 | 551,782 | ||||||
| Cash and cash equivalents at the end of the period | $ | 1,173,203 | $ | 487,485 | ||||
| Supplemental disclosure of cash flow information | ||||||||
| Cash paid for interest | $ | 120,446 | $ | 43,634 | ||||
| Cash paid for income taxes | $ | - | $ | 280,001 | ||||
| Supplemental disclosure of non-cash investing and financing activities | ||||||||
| Capital expenditures funded by capital lease obligations and notes payable | $ | 137,443 | $ | 157,820 | ||||