Jerash Holdings Reports Record Revenue and Earnings for Fiscal 2022 Second Quarter; Increases Revenue Guidance for Full Fiscal Year

FAIRFIELD, NJ / ACCESSWIRE / November 10, 2021 / 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 second quarter, ended September 30, 2021.

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

  • Revenue of $45.7 million, an increase of 68.8 percent, reflecting higher shipments
  • Gross profit of $10.1 million, an increase of 71.8 percent, due to higher revenue and gross margin
  • Gross margin of 22.1 percent versus 21.7 percent, reflecting improved product mix and higher sales volumes
  • Comprehensive income attributable to Jerash's common stockholders of $4.4 million, or $0.39 per share, vs. $2.6 million, or $0.23 per share

Fiscal 2022 Guidance

  • Fiscal 2022 revenue expected to be in the range of $125 million to $130 million versus $90.2 million in fiscal 2021
  • Revenue in fiscal 2022 expected to be at record levels
  • Fiscal 2022 third quarter revenue expected to be in the range of $31 million to $33 million

Sam Choi, chairman and chief executive officer, said, "Our fiscal 2022 second quarter results demonstrated continued strong progress, with robust performance in revenue and margin. Revenue and gross profit were at record levels for the second quarter, reflecting an increase in shipments to our largest customers as a result of strong demand and expanded capacity, 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 the momentum to continue into fiscal 2023. All of our existing factories in Jordan are fully booked through May 2022, with orders from existing top global brand-name customers. As a result, we have increased our fiscal 2022 revenue outlook to reflect the robust momentum and expanded capacity."

Fiscal 2022 Second Quarter Results

Fiscal 2022 second quarter revenue rose 68.8 percent to a record $45.7 million from $27.1 million in the same period last year, primarily due to higher shipments to the company's largest customers as a result of stronger demand and expanded capacity.

Gross profit increased to $10.1 million in the fiscal 2022 second quarter, from $5.9 million in the same period last year, primarily due to higher revenue and gross margin. Gross margin expanded 40 basis points to 22.1 percent in the fiscal 2022 second quarter, from 21.7 percent in the same period last year, reflecting an improved product mix and higher sales volumes.

Operating expenses totaled $4.5 million in the fiscal 2022 second quarter, versus $2.9 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, stock-based compensation, and expenses related to COVID-19 measures and recruitment for new migrant workers.

Operating income rose to $5.6 million in the fiscal 2022 second quarter, from $3.0 million in the same period last year. Net income advanced to $4.4 million in the fiscal 2022 second quarter, from $2.6 million in the same period last year. Comprehensive income attributable to Jerash's common stockholders increased to $4.4 million, or $0.39 per share, in the fiscal 2022 second quarter, from $2.6 million, or $0.23 per share, in the same period last year.

Gilbert Lee, chief financial officer, said, "Our updated outlook for the remainder of this fiscal year reflects our expectation for continued strong customer demand and increased capacity with orders reflective of typical customer patterns. However, it is important to note that potential risks from supply chain issues that some of our customers are facing could affect the timing of shipments in the near term."

Cash and restricted cash totaled $26.3 million, and net working capital was $54.3 million at September 30, 2021. Net cash provided by operating activities was $21.7 million in the fiscal 2022 second quarter, compared with $9.3 million in the same period last year. The increase was primarily due to changes in working capital.

On November 2, 2021, Jerash approved a regular quarterly dividend of $0.05 per share on its common stock, payable on November 29, 2021, to stockholders of record as of November 22, 2021.

On October 4, 2021, Jerash completed a public offering of 1.4 million shares of common stock at a price of $7.00 per share, which included 1.0 million shares issued and sold by the company and 400,000 shares sold by a selling shareholder. Jerash received net proceeds of approximately $6.25 million from the offering, after deducting the underwriting discount and estimated offering expenses payable by the company.

On October 11, 2021, Jerash completed the acquisition of Mustafa and Kamal Ashraf Trading Company (Jordan) for Manufacture of Ready-Made Clothes LLC ("MK Garments"), which operates a 71,000 square-foot apparel manufacturing facility. Jerash assumed production at the MK Garments facility and retained its 500 employees in August 2021.

Conference Call

Jerash will host an investor conference call to discuss its fiscal 2022 second quarter results tomorrow, November 11, 2021, at 9:00 a.m. Eastern Time.

Phone: 888-506-0062 (domestic); 973-528-0011 (international)
Conference ID: 470920

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, sportwear 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 six factory units and four warehouses. Jerash currently employs approximately 5,100 people, and the total annual capacity at its facilities is approximately 15 million pieces. 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
(UNAUDITED)

For the Three Months Ended
September 30,
For the Six Months Ended
September 30,

2021202020212020
Revenue, net$45,711,166$27,086,318$75,599,858$45,793,073
Cost of goods sold35,606,58721,203,56859,864,33736,858,753
Gross Profit10,104,5795,882,75015,735,5218,934,320
Selling, general and administrative expenses4,223,6712,853,6797,537,9024,704,506
Stock-based compensation expenses315,296-315,81342,151
Total Operating Expenses4,538,9672,853,6797,853,7154,746,657
Income from Operations5,565,6123,029,0717,881,8064,187,663
Other (Expense) Income:
Other (expense) income, net(74,557)62,917(38,276)60,178
Total other (expense) income, net(74,557)62,917(38,276)60,178
Net income before provision for income taxes5,491,0553,091,9887,843,5304,247,841
Income tax expense1,050,330531,8961,468,139873,896
Net Income4,440,7252,560,0926,375,3913,373,945
Net loss attributable to noncontrolling interest705872214
Net income attributable to Jerash Holdings (US), Inc.'s Common Stockholders$4,441,430$2,560,100$6,376,113$3,373,959
Net Income$4,440,725$2,560,092$6,375,391$3,373,945
Other Comprehensive Income:
Foreign currency translation (loss) gain(263)71279,725159
Total Comprehensive Income4,440,4622,560,8046,455,1163,374,104
Comprehensive income attributable to noncontrolling interest----
Comprehensive Income Attributable to Jerash Holdings (US), Inc.'s Common Stockholders$4,440,462$2,560,804$6,455,116$3,374,104
Earnings Per Share Attributable to Common Stockholders:
Basic and diluted$0.39$0.23$0.56$0.30
Weighted Average Number of Shares
Basic11,334,31811,325,00011,333,90711,325,000
Diluted11,512,53311,329,95311,403,93111,330,081
Dividend per share$0.05$0.05$0.10$0.10

JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE
CONSOLIDATED BALANCE SHEETS

September 30,
2021
March 31,
2021
(Unaudited)
ASSETS
Current Assets:
Cash$25,042,220$21,126,090
Restricted cash-714,844
Accounts receivable, net13,416,12512,033,268
Tax recoverable1,079379,719
Inventories20,560,27225,035,966
Prepaid expenses and other current assets2,833,9622,329,289
Investment deposits3,200,000-
Advance to suppliers, net1,886,8563,036,693
Total Current Assets66,940,51464,655,869
Restricted cash - non-current1,301,5881,020,777
Long-term deposits268,255128,690
Deferred tax assets, net148,663148,663
Property, plant and equipment, net6,554,4815,699,506
Right of use assets1,601,6711,596,600
Total Assets$76,815,172$73,250,105
LIABILITIES AND EQUITY
Current Liabilities:
Credit facilities$-$612,703
Accounts payable4,535,2557,922,839
Accrued expenses3,460,8862,332,867
Income tax payable - current1,519,9781,803,175
Other payables1,076,2511,455,208
Receipt in advance from a customer1,474,932-
Operating lease liabilities - current550,099400,043
Total Current Liabilities12,617,40114,526,835
Operating lease liabilities - non-current905,710935,773
Income tax payable - non-current961,0481,094,048
Total Liabilities14,484,15916,556,656
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 respectively11,33411,333
Additional paid-in capital15,617,08015,301,268
Statutory reserve346,315346,315
Retained earnings45,991,06240,748,314
Accumulated other comprehensive gain (loss)63,824(15,901)
Total Jerash Holdings (US), Inc.'s Stockholder's Equity62,029,61556,391,329
Noncontrolling interest301,398302,120
Total Equity62,331,01356,693,449
Total Liabilities and Equity$76,815,172$73,250,105

JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

For the Six Months Ended
September 30,
20212020
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income$6,375,391$3,373,945
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization880,135829,285
Stock-based compensation expenses315,81342,151
Bad debt expense-58,563
Amortization of operating lease right-of-use assets356,030365,478
Changes in operating assets:
Accounts receivable(1,382,857)(14,588,644)
Inventories4,475,69412,328,893
Prepaid expenses and other current assets(504,673)659,257
Advance to suppliers1,149,836(677,415)
Changes in operating liabilities:
Accounts payable(3,387,584)(1,423,796)
Accrued expenses1,128,019240,129
Other payables(378,957)212,586
Receipt in advance from a customer1,474,932-
Operating lease liabilities(241,107)(257,577)
Income tax payable(37,442)550,033
Net cash provided by operating activities10,223,2301,712,888
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment(1,606,419)(428,280)
Acquisition deposit(3,200,000)-
Payment for long-term deposits(268,255)-
Receipt of long-term deposits-119,687
Net cash used in investing activities(5,074,674)(308,593)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend payment(1,133,365)(1,132,500)
Repayment from short-term loan(612,703)(235)
Proceeds from short-term loan-932,152
Net cash used in financing activities(1,746,068)(200,583)
EFFECT OF EXCHANGE RATE CHANGES ON CASH79,609(30)
NET INCREASE IN CASH3,482,0971,203,682
CASH, AND RESTRICTED CASH, BEGINNING OF THE PERIOD22,861,71126,916,709
CASH, AND RESTRICTED CASH, END OF THE PERIOD$26,343,808$28,120,391
CASH AND RESTRICTED CASH, END OF PERIOD26,343,80828,120,391
LESS: NON-CURRENT RESTRICTED CASH1,301,588786,298
CASH, END OF PERIOD$25,042,220$27,334,093
-
Supplemental disclosure information:
Cash paid for interest$74,401$-
Income tax paid$1,512,215$347,689
Non-cash financing activities
Right of use assets obtained in exchange for operating lease obligations$353,611$172,413

SOURCE: Jerash Holdings (US), Inc.



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