Jerash Holdings Reports Fiscal 2024 Third Quarter Financial Results
- None.
- Revenue was significantly down compared to the prior year period
Insights
The disruptions in the Middle East have a tangible effect on companies like Jerash Holdings, which rely on smooth supply chain operations. The delays in shipments of raw materials due to the turmoil, including attacks on ships, are a critical concern. These disruptions can lead to increased costs, as companies may need to source materials from alternative suppliers at a premium or expedite shipping at higher rates to meet production schedules.
Long-term, such disruptions could prompt Jerash to diversify its supply chain further or increase inventory levels as a buffer against future supply chain shocks. This strategy, however, would need to be balanced against the costs of carrying extra inventory. The adoption of an alternative route through the Port of Jebel Ali is a strategic move that demonstrates the company's agility in responding to geopolitical challenges.
Jerash Holdings' ability to maintain profitability despite a significant downturn in revenue indicates a resilient business model and effective cost management. However, investors should be cautious as prolonged supply chain issues could continue to affect the company's financial performance. The fresh pipeline of orders from new customers is a positive sign, suggesting potential for revenue growth and diversification of the customer base, which can help mitigate risks associated with any single market or customer.
Monitoring the company's subsequent quarterly results will be crucial to assess the long-term impact of the Middle East situation on its financial health. Stakeholders should also consider the company's contingency plans and their effectiveness in ensuring order fulfillment as a key factor in evaluating Jerash's operational resilience.
The situation in the Middle East poses significant geopolitical risks that can affect businesses operating within and around the region. The fact that Jerash Holdings has managed to keep its Jordan operations fully active is commendable, yet stakeholders should remain aware of the potential for future disruptions. The volatility in the region could escalate and while current contingency plans are in place, the unpredictable nature of geopolitical conflicts means that the situation can change rapidly, necessitating constant vigilance and adaptability from companies like Jerash.
Investors should consider the broader implications of regional instability, including the potential for increased insurance premiums for shipping and the need for heightened security measures, all of which can add to operational costs.
FAIRFIELD, NJ / ACCESSWIRE / February 8, 2024 / Jerash Holdings (US), Inc. ("Jerash" or the "Company") (NASDAQ:JRSH), which manufactures and exports custom, ready-made, sportswear and outerwear for leading global brands, today announced financial results for its fiscal year 2024 third quarter, ended December 31, 2023.
Impact of Middle East Situation
The ongoing turmoil in the Middle East, including the attacks on ships in the Red Sea, is causing supply chain disruptions throughout the region and affecting many companies, including Jerash. Shipments of raw materials to the Company have been delayed, which, in turn, had a transitory effect on operations and financial performance.
While the extent of the impact on the region remains uncertain, the Company's operations in Jordan are fully active, and exports from Jordan at both the Aqaba and Haifa ports are open following a temporary shutdown at Haifa. Starting in December 2023, Jerash has been able to adopt an alternative route through the Port of Jebel Ali in United Arab Emirates for raw material import. The Company is in close communication with its customers and has put contingency plans in place that will enable it to fulfill customer orders.
Fiscal Year 2024 Third Quarter Results
"The ongoing tension in the region presented supply chain issues, causing delays, but not cancellations, and curtailing production during the quarter," said Sam Choi, Jerash's chairman and chief executive officer. "While revenue was significantly down compared with the prior year period, we achieved profitability for the quarter and continued to make good progress attracting a fresh pipeline of orders from new customers representing established global brands.
"We are excited about our growth opportunity in Europe, having recently attracted another European-based high-end apparel brand for which we have begun to produce several trial orders. In addition, Vans and Dickies, both VF Corporation brands, placed trial orders for both the U.S. and European markets. These are all positive indicators for the future.
"While our new customers and the eventual shipment of delayed orders bode well for Jerash's longer term future performance, it would be imprudent at this time to provide formal guidance on what to expect for the current quarter because of the ongoing geopolitical uncertainty. The Ministry of Foreign Affairs of Jordan has reassured our team that the government is proactive in maintaining a safe and stable environment for businesses and providing protection export sea routes. We are grateful that day-to-day life in Jordan remains normal. Our hearts go out to the innocent victims on all sides of the crisis, and we pray for an expeditious resolution," Choi added.
Revenue for the fiscal year 2024 third quarter was
Gross profit for the fiscal year 2024 third quarter was
Operating expenses were reduced to
Operating income totaled
Total other expenses were
Net income was
Comprehensive income attributable to Jerash's common stockholders totaled
Balance Sheet, Cash Flow and Dividends
Cash totaled
On February 5, 2024, Jerash approved a regular quarterly dividend of
Nine-Month Fiscal Year 2024 Results
Revenue for the first nine months of fiscal year 2024 was
Gross profit was
Operating expenses for the first nine months of fiscal year 2024 were
Net income for the first nine months of fiscal year 2024 was
Comprehensive income attributable to Jerash's common stockholders was
Conference Call
Jerash will host an investor conference call to discuss its fiscal year 2024 third quarter results today, February 8, 2024, at 9:00 a.m. Eastern Time.
Phone: 888-506-0062 (domestic); 973-528-0011 (international)
Conference ID: 964050
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 manufactures and exports custom, ready-made, sportswear and outerwear for leading global brands and retailers, including VF Corporation (which owns brands such as The North Face, Timberland, and Vans), New Balance, G-III (which licenses brands such as Calvin Klein, Tommy Hilfiger, DKNY, and Guess), American Eagle, and Skechers. Jerash's existing production facilities comprise six factory units and four warehouses, and Jerash currently employs approximately 5,000 people. 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, and expansion of the customer base among high-profile global brands, 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 U.S. Securities and Exchange Commission. These and other risks and uncertainties are detailed in the Company's filings with the U.S. 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 or Roger Pondel
310-279-5980
jlin@pondel.com
# # #
(tables below)
JERASH HOLDINGS (US), INC.,
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
| For the Three Months Ended December 31, | For the Nine Months Ended December 31, | |||||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
Revenue, net | $ | 27,520,121 | $ | 43,027,047 | $ | 95,612,886 | $ | 114,289,303 | ||||||||
Cost of goods sold | 23,057,845 | 37,230,421 | 80,211,039 | 94,952,523 | ||||||||||||
Gross Profit | 4,462,276 | 5,796,626 | 15,401,847 | 19,336,780 | ||||||||||||
Selling, general and administrative expenses | 3,843,029 | 4,469,967 | 12,318,535 | 12,796,749 | ||||||||||||
Stock-based compensation expenses | 243,448 | - | 727,698 | 294,822 | ||||||||||||
Total Operating Expenses | 4,086,477 | 4,469,967 | 13,046,233 | 13,091,571 | ||||||||||||
Income from Operations | 375,799 | 1,326,659 | 2,355,614 | 6,245,209 | ||||||||||||
Other Income (Expenses): | ||||||||||||||||
Interest expenses | (234,971 | ) | (248,894 | ) | (983,156 | ) | (500,331 | ) | ||||||||
Other income, net | 129,877 | 137,432 | 412,627 | 255,481 | ||||||||||||
Total other expenses, net | (105,094 | ) | (111,462 | ) | (570,529 | ) | (244,850 | ) | ||||||||
Net income before provision for income taxes | 270,705 | 1,215,197 | 1,785,085 | 6,000,359 | ||||||||||||
Income tax expenses | 38,535 | 324,379 | 688,856 | 1,596,407 | ||||||||||||
Net income | 232,170 | 890,818 | 1,096,229 | 4,403,952 | ||||||||||||
Net gain attributable to noncontrolling interest | (11,457 | ) | - | (13,373 | ) | - | ||||||||||
Net income attributable to Jerash Holdings (US), Inc.'s Common Stockholders | $ | 220,713 | $ | 890,818 | $ | 1,082,856 | $ | 4,403,952 | ||||||||
Net income | $ | 232,170 | $ | 890,818 | $ | 1,096,229 | $ | 4,403,952 | ||||||||
Other Comprehensive Income (Loss): | ||||||||||||||||
Foreign currency translation gain (loss) | 99,171 | 37,804 | (55,329 | ) | (296,066 | ) | ||||||||||
Total Comprehensive Income | 331,341 | 928,622 | 1,040,900 | 4,107,886 | ||||||||||||
Comprehensive gain attributable to noncontrolling interest | (11,457 | ) | - | (13,373 | ) | - | ||||||||||
Comprehensive Income Attributable to Jerash Holdings (US), Inc.'s Common Stockholders | $ | 319,884 | $ | 928,622 | $ | 1,027,527 | $ | 4,107,886 | ||||||||
Earnings Per Share Attributable to Common Stockholders: | ||||||||||||||||
Basic and diluted | $ | 0.02 | $ | 0.07 | $ | 0.09 | $ | 0.35 | ||||||||
Weighted Average Number of Shares | ||||||||||||||||
Basic | 12,294,840 | 12,412,922 | 12,294,840 | 12,414,546 | ||||||||||||
Diluted | 12,294,840 | 12,412,922 | 12,294,840 | 12,467,315 | ||||||||||||
Dividend per share | $ | 0.05 | $ | 0.05 | $ | 0.15 | $ | 0.15 | ||||||||
JERASH HOLDINGS (US), INC.,
AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| December 31, 2023 | March 31, 2023 | |||||||
| (Unaudited) | ||||||||
ASSETS | ||||||||
Current Assets: | ||||||||
Cash | $ | 19,617,630 | $ | 17,801,614 | ||||
Accounts receivable, net | 8,472,674 | 2,240,537 | ||||||
Bills receivable | 152,188 | 87,573 | ||||||
Inventories | 15,937,648 | 32,656,833 | ||||||
Prepaid expenses and other current assets | 2,582,886 | 2,964,578 | ||||||
Advance to suppliers, net | 2,644,108 | 1,533,091 | ||||||
Total Current Assets | 49,407,134 | 57,284,226 | ||||||
Restricted cash - non-current | 1,608,784 | 1,609,989 | ||||||
Long-term deposits | 782,697 | 841,628 | ||||||
Deferred tax assets, net | 153,873 | 153,873 | ||||||
Property, plant and equipment, net | 24,796,611 | 22,355,574 | ||||||
Goodwill | 499,282 | 499,282 | ||||||
Right of use assets | 541,612 | 974,761 | ||||||
Total Assets | $ | 77,789,993 | $ | 83,719,333 | ||||
LIABILITIES AND EQUITY | ||||||||
Current Liabilities: | ||||||||
Accounts payable | $ | 2,401,586 | $ | 5,782,570 | ||||
Accrued expenses | 2,898,142 | 2,930,533 | ||||||
Income tax payable - current | 1,736,484 | 2,846,201 | ||||||
Other payables | 1,619,636 | 1,477,243 | ||||||
Deferred revenue | 905 | 928,393 | ||||||
Operating lease liabilities - current | 280,363 | 481,502 | ||||||
Total Current Liabilities | 8,937,116 | 14,446,442 | ||||||
Operating lease liabilities - non-current | 196,456 | 287,247 | ||||||
Income tax payable - non-current | 417,450 | 751,410 | ||||||
Total Liabilities | 9,551,022 | 15,485,099 | ||||||
Equity | ||||||||
Preferred stock, | $ | - | $ | - | ||||
Common stock, | 12,534 | 12,534 | ||||||
Additional paid-in capital | 23,658,744 | 22,931,046 | ||||||
Treasury stock, 239,478 shares | (1,169,046 | ) | (1,169,046 | ) | ||||
Statutory reserve | 410,847 | 410,847 | ||||||
Retained earnings | 45,410,712 | 46,172,082 | ||||||
Accumulated other comprehensive loss | (178,558 | ) | (123,229 | ) | ||||
Total Jerash Holdings (US), Inc.' Stockholders' Equity | 68,145,233 | 68,234,234 | ||||||
Noncontrolling interest | 93,738 | - | ||||||
Total Equity | 68,238,971 | 68,234,234 | ||||||
Total Liabilities and Equity | $ | 77,789,993 | $ | 83,719,333 | ||||
JERASH HOLDINGS (US), INC.,
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Nine Months Ended December 31, | ||||||||
| 2023 | 2022 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
Net income | $ | 1,096,229 | $ | 4,403,952 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 1,881,853 | 1,753,941 | ||||||
Stock-based compensation expenses | 727,698 | 294,822 | ||||||
Bad debt recovery | (187,762 | ) | - | |||||
Amortization of operating lease right-of-use assets | 601,727 | 784,699 | ||||||
Changes in operating assets: | ||||||||
Accounts receivable | (6,044,375 | ) | 5,503,123 | |||||
Bills receivable | (64,614 | ) | - | |||||
Inventories | 16,719,185 | 1,591,135 | ||||||
Prepaid expenses and other current assets | 350,324 | 424,867 | ||||||
Advance to suppliers | (1,111,017 | ) | (4,725,296 | ) | ||||
Changes in operating liabilities: | ||||||||
Accounts payable | (3,380,984 | ) | 1,108,112 | |||||
Accrued expenses | (32,390 | ) | (266,092 | ) | ||||
Other payables | 142,393 | (883,219 | ) | |||||
Deferred revenue | (927,488 | ) | 296,985 | |||||
Operating lease liabilities | (460,508 | ) | (661,274 | ) | ||||
Income tax payable, net of recovery | (1,443,317 | ) | 232,632 | |||||
Net cash provided by operating activities | 7,866,954 | 9,858,387 | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
Purchases of property, plant, and equipment | (824,305 | ) | (587,613 | ) | ||||
Payments for construction of properties | (3,158,501 | ) | (3,414,172 | ) | ||||
Acquisition of Ever Winland | - | (5,100,000 | ) | |||||
Acquisition of Kawkab Venus | - | (2,200,000 | ) | |||||
Payment for long-term deposits | (281,153 | ) | (70,549 | ) | ||||
Net cash used in investing activities | (4,263,959 | ) | (11,372,334 | ) | ||||
CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
Dividend payments | (1,844,226 | ) | (1,865,241 | ) | ||||
Investment of noncontrolling interest | 31,365 | - | ||||||
Share repurchase | - | (771,894 | ) | |||||
Repayment from short-term loan | (4,937,633 | ) | (1,756,360 | ) | ||||
Repayment to a related party | - | (300,166 | ) | |||||
Proceeds from short-term loan | 4,937,633 | 6,162,743 | ||||||
Net cash (used in) provided by financing activities | (1,812,861 | ) | 1,469,082 | |||||
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND RESTRICTED CASH | 24,677 | (296,261 | ) | |||||
NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH | 1,814,811 | (341,126 | ) | |||||
CASH, AND RESTRICTED CASH, BEGINNING OF THE PERIOD | 19,411,603 | 26,583,488 | ||||||
CASH, AND RESTRICTED CASH, END OF THE PERIOD | $ | 21,226,414 | $ | 26,242,362 | ||||
CASH, AND RESTRICTED CASH, END OF THE PERIOD | 21,226,414 | 26,242,362 | ||||||
LESS: NON-CURRENT RESTRICTED CASH | 1,608,784 | 1,615,353 | ||||||
CASH, END OF THE PERIOD | $ | 19,617,630 | $ | 24,627,009 | ||||
Supplemental disclosure information: | ||||||||
Cash paid for interest | $ | 983,156 | $ | 500,331 | ||||
Income tax paid | $ | 2,163,732 | $ | 1,354,754 | ||||
Non-cash investing and financing activities | ||||||||
Equipment obtained by utilizing long-term deposit | $ | 355,160 | $ | 236,735 | ||||
Acquisition of Kawkab Venus by utilizing long-term deposit | $ | - | $ | 500,000 | ||||
Right of use assets obtained in exchange for operating lease obligations | $ | 177,068 | $ | 190,654 | ||||
SOURCE: Jerash Holdings (US), Inc.
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