Jerash Holdings Reports Record Results for the Fiscal 2022 First Quarter, Increases Revenue Guidance for Full Fiscal Year

FAIRFIELD, NJ / ACCESSWIRE / August 11, 2021 / Jerash Holdings (US), Inc. (NASDAQ:JRSH), which manufactures and exports custom, ready-made, sports and outerwear for leading global brands, today announced financial results for its fiscal 2022 first quarter, ended June 30, 2021.

Financial Highlights - Fiscal 2022 First Quarter Versus Fiscal 2021 First Quarter

  • Revenue of $29.9 million, an increase of 59.8 percent, reflecting higher shipments
  • Gross profit of $5.6 million, an increase of 84.5 percent, due to higher revenue and gross margin
  • Gross margin of 18.8 percent vs. 16.3 percent, reflecting improved product mix and higher sales volumes
  • Comprehensive income attributable to Jerash Holdings (US), Inc.'s common stockholders of $2.0 million, or $0.17 per share, vs. approximately $813,000, or $0.07 per share

Fiscal 2022 Guidance

  • Fiscal 2022 revenue expected to be in the range of $115 million to $120 million vs. $90.2 million for fiscal 2021
  • Revenue for fiscal 2022 expected to be at record levels
  • Fiscal 2022 second quarter revenue expected to exceed $40 million

Sam Choi, chairman and chief executive officer, said, "Our fiscal 2022 first quarter results demonstrated excellent progress, with strong performance in revenue and margin. Revenue and gross profit were at record levels for the first quarter, reflecting an increase in shipments to our largest customers as a result of strong demand amid the reopening of the U.S. economy, as well as an improved mix of products sold.

"We continue to advance our plans to increase capacity and secure additional space to meet our customers' needs," Choi said. "We anticipate our momentum to continue well into fiscal 2022. All of our existing factories in Jordan are fully booked through January 2022, with orders from existing top global brand-name customers alone. These customers already are placing orders that are expected to fully book the newest facility we acquired through January 2022 as well. As a result, we have increased our fiscal 2022 revenue outlook to reflect our robust momentum and expanded capacity."

Fiscal 2022 First Quarter Results

Fiscal 2022 first quarter revenue rose by 59.8 percent to $29.9 million from $18.7 million in the same period last year, primarily due to higher shipments to the company's largest customers as a result of stronger demand amid a reopening of the U.S. economy.

Gross profit increased to $5.6 million in the fiscal 2022 first quarter, from $3.1 million in the same period last year, primarily due to higher revenue and gross margin. Gross margin expanded 250 basis points to 18.8 percent in the fiscal 2022 first quarter, from 16.3 percent in the same period last year, reflecting an improved product mix and higher sales volumes.

Operating expenses totaled $3.3 million in the fiscal 2022 first quarter, versus $1.9 million in the same period last year. The increase was primarily due to higher headcount to support the company's growth, an increase in shipping costs, and expenses related to COVID-19 measures and recruitment for new migrant workers.

Operating income totaled $2.3 million in the fiscal 2022 first quarter, versus $1.2 million in the same period last year. Net income advanced to $1.9 million in the fiscal 2022 first quarter, versus approximately $814,000 in the same period last year. Comprehensive income attributable to Jerash Holdings (US), Inc.'s common stockholders totaled $2.0 million, or $0.17 per share, in the fiscal 2022 first quarter, versus approximately $813,000, or $0.07 per share, in the same period last year.

Gilbert Lee, chief financial officer, said, "Results for our fiscal 2022 first quarter reflected the recovery in the U.S. economy from pandemic-related effects. Order momentum is continuing into fiscal 2022, as expected, and more reflective of typical customer patterns. Our order mix for pre-bookings in the September and December quarters is heavily weighted to global brand-name outerwear products, which carry higher average selling prices and favorable gross margins.

"Our updated outlook for fiscal 2022 reflects our expectation for continued strong customer demand and increased capacity for the year. However, it is important to note that potential risks from the Delta variant of COVID-19 could constrain our ability to add workers needed to run operations at full capacity."

Balance Sheet, Cash Flow and Dividends

Cash and restricted assets totaled $8.5 million, and net working capital was $51.4 million at June 30, 2021. Net cash used in operating activities was $11.5 million in the fiscal 2022 first quarter, compared with $7.6 million in the same period last year. The increase was primarily due to changes in working capital.

On August 5, 2021, Jerash approved a regular quarterly dividend of $0.05 per share on its common stock, payable on August 24, 2021, to stockholders of record as of August 17, 2021.

Conference Call

Jerash Holdings will host an investor conference call to discuss its fiscal 2022 first quarter results today, August 11, 2021, at 9:00 a.m. Eastern Time.

Phone: 877-407-9210 (domestic); 201-689-8049 (international)

Conference ID: 13721837

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, sports and outerwear for leading global brands and retailers, including Walmart, Costco, New Balance, G-III (which owns brands such as Calvin Klein, Tommy Hilfiger, DKNY, and Guess), American Eagle, and VF Corporation (which owns brands such as The North Face, Timberland, and JanSport). Jerash's existing production facilities comprise four factory units, one workshop, and four warehouses, and Jerash currently employs approximately 4,500 people. The total annual capacity at its facilities was approximately 12.0 million pieces as of June 30, 2021. 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

(tables below)

JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME 
FOR THE THREE MONTHS ENDED JUNE 30, 2021 AND 2020 
(UNAUDITED)

  For the Three Months Ended June 30, 
  2021  2020 
       
Revenue, net 29,888,692  18,706,755 
Cost of goods sold  24,257,750   15,655,185 
Gross Profit  5,630,942   3,051,570 
         
Selling, general and administrative expenses  3,314,231   1,850,827 
Stock-based compensation expenses  517   42,151 
Total Operating Expenses  3,314,748   1,892,978 
         
Income from Operations  2,316,194   1,158,592 
         
Other Income (Expense):        
Other income (expense), net  36,281   (2,739)
Total other income (expense), net  36,281   (2,739)
         
Net income before provision for income taxes  2,352,475   1,155,853 
         
Income tax expense  417,809   342,000 
         
Net Income  1,934,666   813,853 
         
Net loss attributable to noncontrolling interest  17   6 
Net income attributable to Jerash Holdings (US), Inc.'s Common Stockholders 1,934,683  813,859 
         
Net Income 1,934,666  813,853 
Other Comprehensive Income:        
Foreign currency translation gain (loss)  79,988   (553)
Total Comprehensive Income  2,014,654   813,300 
Comprehensive income attributable to noncontrolling interest  -   - 
Comprehensive Income Attributable to Jerash Holdings (US), Inc.'s Common Stockholders 2,014,654  813,300 
         
Earnings Per Share Attributable to Common Stockholders:        
Basic and diluted 0.17  0.07 
         
Weighted Average Number of Shares        
Basic  11,333,934   11,325,000 
Diluted  11,354,680   11,330,210 
         
Dividend per share 0.05  0.05 

JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE

CONSOLIDATED BALANCE SHEETS

  June 30, 2021  March 31, 2021   
  (Unaudited)      
         

 ASSETS

Current Assets:        
Cash 7,656,488  21,126,090   
Restricted cash  -   714,844   
Accounts receivable, net  19,581,753   12,033,268   
Tax recoverable  390,794   379,719   
Inventories  31,300,441   25,035,966   
Prepaid expenses and other current assets  2,455,375   2,329,289   
Investment deposits  1,082,905   -   
Advance to suppliers, net  111,434   3,036,693   
Total Current Assets  62,579,190   64,655,869   
           
Restricted cash - non-current  876,211   1,020,777   
Long-term deposits  62,930   128,690   
Deferred tax assets, net  148,663   148,663   
Property, plant and equipment, net  6,050,350   5,699,506   
Right of use assets  1,784,817   1,596,600   
Total Assets 71,502,161  73,250,105   
           
           

 LIABILITIES AND EQUITY

           
Current Liabilities:          
Credit facilities -  612,703   
Accounts payable  5,458,665   7,922,839   
Accrued expenses  2,692,737   2,332,867   
Income tax payable - current  1,506,270   1,803,175   
Other payables  1,032,899   1,455,208   
Operating lease liabilities - current  519,599   400,043   
Total Current Liabilities  11,210,170   14,526,835   
Operating lease liabilities - non-current  1,055,972   935,773   
Income tax payable - non-current  1,094,048   1,094,048   
Total Liabilities  13,360,190   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; 11,334,318 and 11,332,974 shares issued and outstanding respectively  11,334   11,333   
Additional paid-in capital  15,301,784   15,301,268   
Statutory reserve  346,315   346,315   
Retained earnings  42,116,348   40,748,314   
Accumulated other comprehensive loss  64,087   (15,901)  
Total Jerash Holdings (US), Inc.'s Stockholder's Equity  57,839,868   56,391,329   
Noncontrolling interest  302,103   302,120   
Total Equity  58,141,971   56,693,449   
Total Liabilities and Equity 71,502,161  73,250,105   

JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

  For the Three Months Ended 
June 30,
 
  2021  2020 
CASH FLOWS FROM OPERATING ACTIVITIES      
Net Income 1,934,666  813,853 
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation and amortization  404,526   412,054 
Stock-based compensation expenses  517   42,151 
Bad debt expense  -   18,043 
Amortization of operating lease right-of-use assets  172,891   131,088 
Changes in operating assets:        
Accounts receivable  (7,548,486)  (10,531,884)
Inventories  (6,264,474)  4,556,693 
Prepaid expenses and other current assets  (126,087)  504,484 
Advance to suppliers  2,925,259   (1,052,028)
Changes in operating liabilities:        
Accounts payable  (2,464,174)  (2,611,778)
Accrued expenses  359,870   (117,773)
Other payables  (422,310)  158,678 
Operating lease liabilities  (121,352)  (84,315)
Income tax payable  (307,997)  193,881 
Net cash used in operating activities  (11,457,151)  (7,566,853)
         
CASH FLOWS FROM INVESTING ACTIVITIES        
Purchases of property, plant and equipment  (626,680)  (165,522)
Acquisition Deposit  (1,082,905)  - 
Payment for long-term deposits  (62,930)  (76,283)
Net cash used in investing activities  (1,772,515)  (241,805)
         
CASH FLOWS FROM FINANCING ACTIVITIES        
Dividend payment  (566,649)  (566,250)
Repayment from short-term loan  (612,703)  (235)
Net cash used in financing activities  (1,179,352)  (566,485)
         
EFFECT OF EXCHANGE RATE CHANGES ON CASH  80,006   (595)
         
NET DECREASE IN CASH  (14,329,012)  (8,375,738)
         
CASH, AND RESTRICTED CASH, BEGINNING OF THE PERIOD  22,861,711   26,916,709 
         
CASH, AND RESTRICTED CASH, END OF THE PERIOD 8,532,699  18,540,971 
         
CASH AND RESTRICTED CASH, END OF THE PERIOD  8,532,699   18,540,971 
LESS: NON-CURRENT RESTRICTED CASH  876,211   786,298 
CASH, END OF PERIOD 7,656,488  17,754,673 
         
Supplemental disclosure information:        
Cash paid for interest 28,639  - 
Income tax paid 724,443  148,119 
         
Non-cash financing activities        
Right of use assets obtained in exchange for operating lease obligations 353,611  68,932 

SOURCE: Jerash Holdings



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