iFresh, Inc. Reports Fiscal 2018 Second Quarter Financial Results


NEW YORK, Nov. 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 second quarter ended September 30, 2017.

Fiscal 2018 Second Quarter Highlights:

  • Total net sales increase of 5% to $33.3 million, compared to $31.9 million in the second quarter of fiscal 2017
  • Retail segment net sales increase of 3% to $26.8 million, compared to $26 million in the second quarter of fiscal 2017
  • Total wholesale segment net sales increase of 12% to $6.6 million, compared to $5.9 million in the second quarter of fiscal 2017
  • Gross profit for the second quarter ended September 30, 2017 increased by 5%, to $6.7 million compared to $6.4 million in the prior year period

Mr. Long Deng, Chairman of the board of directors and CEO of iFresh, commented, “We are pleased to report an increase in total net sales and double-digit wholesale segment growth in the quarter ended September 30, 2017. We report decreased net income in the quarter due to the increase of selling, general and administrative expenses, and higher interest expenses. 

For the remainder of calendar year 2017, we remain committed to driving sales within existing stores and actively pursuing expansion opportunities in strategic geographies. The Orlando store we acquired in July 2017 has contributed $0.8 million revenue to net retail sales. The operation of our recently acquired stores in North Miami Beach and Milford will be reflected in our financial statement for the quarter ended December 31, 2017. We are also in the process of standardizing the presentation of our storefronts and improving our brand image and recognition.

We are ready to capture the opportunities in our growing market in the coming holiday season and expect to improve our bottom-line performance in the next quarter. We look forward to updating you on our performance in the near future,” concluded Mr. Deng.

Second Quarter 2018 Results

Net Sales

For the three months ended September 30, 2017, net sales were $33.3 million, an increase of $1.5 million, or 5%, from $31.9 million for the three months ended September 30, 2016. This was driven by a retail segment net sales increase of 3%, to $26.8 million, from $26 million in the second quarter of fiscal 2017, and a wholesale segment net sales increase of $0.7 million, to $6.6 million, from $5.9 million for the three months ended September 30, 2016.

Gross Profit

Gross profit for the second quarter ended September 30, 2017 increased by 5%, to $6.7 million, compared to $6.4 million in the prior year period. Gross margin was 20.2% and 20.0% for the quarter ended September 30, 2017 and 2016, respectively.

Selling, General and Administrative Expenses

SG&A expense was $7.5 million in the three months ended September 30, 2017, compared to $6.1 million in the same period of the last fiscal year, which was mainly attributable to increased payroll expenses and the additional expenses related to two stores newly acquired on July 13, 2017.

Net Income

Net income was $25,234 for the three months ended September 30, 2017, a decrease of $0.23 million, or 90%, from $0.26 million of net income for the three months ended September 30, 2016, mainly attributable to the increase in selling, general and administrative expenses and higher interest expenses.

Cash, Liquidity and Financial Position

As of September 30, 2017, the Company had cash and cash equivalents of $1.0 million, compared to $2.5 million as of March 31, 2017. Working capital was $15.7 million as of September 30, 2017 compared to $13.4 million as of March 31, 2017. As of September 30, 2017, the Company had $1.2 million of bank loans due within one year.

For the six months ended September 30, 2017, net cash used in operating activities was $1.0 million. Net cash used in investing activities was $3.2 million. Net cash provided by financing activities was $2.7 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.


 
iFRESH INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
       
  September 30,  March 31, 
  2017  2017 
ASSETS      
Current assets:      
Cash and cash equivalents $1,016,352  $2,508,362 
Accounts receivable, net  3,345,880   2,272,011 
Inventories, net  11,322,782   9,796,984 
Prepaid expenses and other current assets  1,874,874   981,017 
Advances to related parties  16,665,703   14,852,083 
Total current assets  34,225,591   30,410,457 
Property and equipment, net  10,008,894   9,290,674 
Intangible assets, net  1,233,335   1,300,001 
Security deposits  1,089,777   912,346 
Deferred income taxes  350,373   86,799 
Total assets $46,907,970  $42,000,277 
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
Current liabilities:        
Accounts payable $14,101,997   12,364,071 
Deferred revenue  201,470   206,737 
Borrowings against term loan -current, net  1,167,764   1,144,568 
Notes payable, current  241,434   262,578 
Capital lease obligations, current  48,581   51,376 
Accrued expenses  802,993   730,392 
Taxes payable  1,507,106   1,769,398 
Other payables, current  481,653   501,213 
Total current liabilities  18,552,998   17,030,333 
Borrowings against lines of credit & term loan-non-current, net  15,745,693   12,779,838 
Notes payable, non-current  380,784   379,376 
Capital lease obligations, non-current  82,013   59,907 
Deferred rent  5,893,684   5,424,134 
Other payables, non-current  67,800   34,800 
Total liabilities  40,722,972   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, 14,173,033 and 14,103,033 shares issued and outstanding as of September 30, 2017 and March 31, 2017, respectively  1,417   1,410 
Additional paid-in capital  9,211,426   9,075,025 
Accumulated deficit  (3,027,845)  (2,784,546)
Total shareholders’ equity  6,184,998   6,291,889 
Total liabilities and shareholders’ equity $46,907,970   42,000,277 


 
iFRESH INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
 
  For the three months ended  
  September 30,  September 30,  
  2017  2016  
Net sales $30,764,800  $29,862,331  
Net sales-related parties  2,575,092   2,024,569  
Total net sales  33,339,892   31,886,900  
Cost of sales  22,765,456   22,376,055  
Cost of sales-related parties  1,960,566   1,354,187  
Occupancy costs  1,893,762   1,765,386  
Gross profit  6,720,108   6,391,272  
          
Selling, general and administrative expenses  7,476,204   6,130,117  
Income (Loss) from operations  (756,096)  261,155  
Interest expense, net  (208,844)  (46,718) 
Other income  1,017,510   263,203  
Income(Loss) before income taxes  52,570   477,640  
Income tax provision (benefit)  27,336   219,279  
Net income (Loss) $25,234  $258,361  
          
Net income (loss) per share:         
Basic $0.002  $0.02  
Diluted $0.002  $0.02  
Weighted average shares outstanding:         
Basic  14,166,440   12,000,000  
Diluted  14,166,440   12,000,000  


 
iFRESH INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
  For the Six months ended 
  September 30,  September 30, 
  2017  2016 
Cash flows from operating activities      
Net income (loss) $(243,299) $436,106 
Adjustments to reconcile net income (loss) to net cash provided by operating activities:        
Depreciation expense  832,667   778,508 
Amortization expense  157,916   66,666 
Share based compensation  267,400   - 
Inventory provision  -   14,339 
         
Deferred income tax expense (benefit)  (263,574)  130,396 
         
Changes in operating assets and liabilities:        
Accounts receivable  (1,073,869)  (170,849)
Inventories  (1,525,798)  (546,362)
Prepaid expenses and other current assets  (893,856)  (103,643)
Security deposits  (98,013)  168,695 
Accounts payable  1,737,926   1,809,871 
Deferred revenue  (5,268)  66,424 
Accrued expenses  72,601   24,108 
Taxes payable  (262,292)  (93,126)
Deferred rent  290,653   296,116 
Other liabilities  13,439   40,199 
Net cash provided by (used in) operating activities  (993,367)  2,917,448 
Cash flows from investing activities        
Advances made to related parties  (1,943,197)  (2,445,980)
Acquisition of property and equipment  (1,241,261)  (607,533)
Cash proceeds received from acquisition of Glen Cove  5,631   - 
Net cash used in investing activities  (3,178,827)  (3,053,513)
Cash flows from financing activities        
Proceeds from borrowings against lines of credit  2,500,000   200,000 
Proceeds from borrowings against term loan  1,050,000   - 
Repayments on lines of credit borrowings  (652,199)  (82,000)
Proceeds from borrowings on notes payable  -   288,129 
Repayments on notes payable  (187,401)  (116,857)
Payments on capital lease obligations  (30,216)  (26,345)
Net cash provided by financing activities  2,680,184   262,927 
Net increase (decrease) in cash and cash equivalents  (1,492,010)  126,862 
Cash and cash equivalents at beginning of the period  2,508,362   551,782 
Cash and cash equivalents at the end of the period $1,016,352  $678,644 
Supplemental disclosure of cash flow information        
Cash paid for interest $327,900  $90,649 
Cash paid for income taxes $296,067  $592,325 
Supplemental disclosure of non-cash investing and financing activities        
Capital expenditures funded by capital lease obligations and notes payable $217,193  $288,129 
Stock issued for Glen Cove Acquisition $645,500  $- 
 

Contact:

Dragon Gate Investment Partners LLC

Tel: +1(646)-801-2803

Email: ifmk@dgipl.com