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iFresh, Inc. Reports Fiscal 2018 First Quarter Financial Results

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  

 

Contact:
                    
                    ICR Inc.
                    Rose Zu
                    rose.zu@icrinc.com
                    Tel: 347-436-8368

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