Maison Solutions Reports Fiscal 2024 Second Quarter and Six-Month Financial Results

Rhea-AI Summary

Maison Solutions Inc. (Nasdaq:MSS) reported financial results for the second quarter and first six months of fiscal 2024, highlighting an IPO and private placement for future growth. Total revenues for the second quarter were $13.8 million, with a decrease in perishable goods sales and an increase in gross profit. The Company's cash and equivalents increased to $8.6 million at October 31, 2023, from $2.6 million at April 30, 2023. For the first six months of fiscal 2024, total revenues rose 7.6% to $27.5 million, with an increase in gross profit and a reduction in net loss.

Positive

• Completion of IPO and private placement for future growth
• Increase in total revenues for the first six months of fiscal 2024
• Improvement in gross profit and gross margin

Negative

• Reduction in total revenues for the second quarter
• Decrease in operating income for the second quarter
• Increase in net loss for the first six months of fiscal 2024

MONTEREY PARK, CA / ACCESSWIRE / December 18, 2023 / Maison Solutions Inc. ("Maison Solutions" or the "Company"), (Nasdaq:MSS), a fast-growing specialty grocery retailer offering traditional Asian food and merchandise to modern U.S. consumers, today announced financial results for the second quarter and first six months of fiscal 2024 ended October 31, 2023.

"Maison Solutions reached an important milestone in the Company's history with the completion of our IPO in October, and a subsequent private placement in November, better positioning Maison Solutions for future growth," said John Xu, President and Chief Executive Officer. "We plan to achieve this growth through a combination of organic expansion and strategic acquisitions, while working toward further improving efficiency throughout our organization.

"We recently purchased a robust visualization display management software suite to help our stores reach their full potential by optimizing store design and set-up, including enhanced store layout and display, AI-driven decision making, task and process management, standardization across stores, remote inspection and management, training and staff efficiency, and inventory and SKU management," said Xu. "As a result, we expect to reduce the cost of operating and opening new stores under our HK Good Fortune brand, and, over the longer term, using the knowledge we gain from implementing the software to open new revenue streams by collaborating with other grocery and convenience stores to help them implement their own digital platforms using the software."

Fiscal 2024 Second Quarter Financial Results

Total revenues, net were $13.8 million for the fiscal 2024 second quarter, compared with $14.2 million for the prior-year quarter. The decrease mainly was due to competition from two newly opened Asian supermarkets near the Company's store in San Gabriel as well as reduction in online purchases as a result of customers returning to pre-pandemic shopping patterns and habits. Additionally, the Company generated slightly lower sales from perishable goods, which include meat, seafood, vegetables and fruit. Perishables revenues were $7.5 million for the fiscal 2024 second quarter, versus $7.9 million last year. Revenues for non-perishable goods, which include grocery, liquor, cigarettes, lottery, newspaper, reusable bags, non-food, and health products, of $6.3 million, were similar to the same period last year.

Total cost of revenues, which includes rental expense, depreciation, the direct costs of purchased merchandise, shrinkage costs, store supplies, and inbound shipping costs, decreased 4.0 percent to $10.6 million for the fiscal 2024 second quarter, compared with $11.1 million for the same period last year.

Gross profit for the fiscal 2024 second quarter was $3.1 million, up slightly from the same period last year. Gross margin improved 90 basis points to 22.7 percent, up from 21.8 percent for the fiscal 2023 second quarter.

Operating income was $254,000 for the fiscal 2024 second quarter, compared with $649,000 for the fiscal 2023 second quarter. The reduction was primarily due to higher selling expenses related to an increase in payroll and utility costs.

Net income attributable to Maison Solutions Inc. was $91,000, or $0.01 per diluted share, for the second quarter of fiscal 2024, versus $529,000, or $0.03 per diluted share, for the prior-year period.

At October 31, 2023, the Company had cash and equivalents of $8.6 million, up from $2.6 million at April 30, 2023. Maison Solutions completed an initial public offering on October 10, 2023, generating gross proceeds of $10.0 million. Net cash provided by operating activities was $476,000 for the six months ended October 31, 2023, compared with net cash used in operating activities of $1.1 million for the same period last year.

Six-Month Fiscal Year 2024 Financial Results

Total revenues, net rose 7.6% to $27.5 million for the first six months of fiscal 2024, up from $25.6 million for the prior-year period. The increase mainly was due to the acquisition of Maison Monterey Park in July 2022, partially offset by decreased sales at three of the Company's other stores. Perishable goods revenues increased to $15.2 million, up from $14.4 million for the first six months of fiscal 2023. Non-perishable goods revenues improved to $12.3 million, from $11.2 million for the first six months of fiscal 2023.

Total cost of revenues were $21.3 million for the fiscal 2024 first half, compared with $20.2 million for the same period last year.

Gross profit for the first six months of fiscal 2024 was $6.3 million, up from $5.4 million for the same period last year. Gross margin improved 157 basis points to 22.6 percent, up from 21.1 percent for the first six months of fiscal 2023.

Operating income was $37,000 for the fiscal 2024 first half, compared with $128,000 for the fiscal 2023 first half. The reduction was principally related to an increase in selling expenses, including payroll and store operating costs, as well as higher general and administrative expenses, mainly due to professional fees related to the Company's IPO.

Net loss attributable to Maison Solutions Inc. was $13,000, or a loss of $0.00 per diluted share, for the first six months of fiscal 2024, versus a loss of $68,000, or a loss of $0.00 per diluted share, for the prior-year period.

About Maison Solutions Inc.

Maison Solutions Inc. is a fast-growing specialty grocery retailer offering traditional Asian food and merchandise to modern U.S. consumers, particularly to members of Asian-American communities. The Company is committed to providing Asian fresh produce, meat, seafood, and other daily necessities in a manner that caters to traditional Asian-American family values and cultural norms, while also accounting for the new and faster-paced lifestyle of younger generations and the diverse makeup of the communities in which the Company operates. Since its formation in 2019, the Company has acquired equity interests in four traditional Asian supermarkets in the Los Angeles area, and has been operating them under the brand name HK Good Fortune. To learn more about Maison Solutions, please visit the Company's website at www.maisonsolutionsinc.com.

Cautionary Note Concerning Forward-Looking Statements

This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, including the Company's ability to grow organically and through acquisitions, improve efficiencies throughout the organization, reduce costs related to operating and opening new stores, and, over the longer term, use knowledge gained from implementing the software to open new revenue streams. No assurance can be given that the proceeds will be used as indicated. Forward-looking statements are subject to numerous conditions, many of which are beyond the control of the Company, including those set forth in the Risk Factors section of the Company's registration statement for the initial public offering filed with the SEC. Copies are available on the SEC's website at www.sec.gov. Maison Solutions undertakes no obligation to update these statements for revisions or changes after the date of this release, except as required by law.

Investor Relations and Media Contact:

PondelWilkinson Inc.
Judy Lin or Laurie Berman
310-279-5980
info@maisonsolutionsinc.com

(financial tables follow)

MAISON SOLUTIONS INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)

		Three Months Ended October 31,								Six Months Ended October 31,
		2023				2022				2023				2022
Net Revenues
Supermarket		$	13,766,204			$	14,168,472			$	27,518,519			$	25,578,160
Total Revenues, Net			13,766,204				14,168,472				27,518,519				25,578,160
Cost of Revenues
Supermarket			10,642,983				11,083,992				21,289,202				20,188,831
Total Cost of Revenues			10,642,983				11,083,992				21,289,202				20,188,831
Gross Profit			3,123,221				3,084,480				6,229,317				5,389,329
Selling Expenses			2,281,147				1,837,816				4,545,697				4,006,034
General and Administrative Expenses			588,251				597,221				1,646,542				1,254,849
Total Operating Expenses			2,869,398				2,435,037				6,192,239				5,260,883
Income from Operations			253,823				649,443				37,078				128,446
Other Income, net			(898	)			43,668				383,051				43,792
Investment (Loss) Income			15,678				-				(12,778	)			-
Interest Expense			(29,965	)			(28,759	)			(76,531	)			(60,347	)
Total Other Income (Expenses), net			(15,185	)			14,909				293,742				(16,555	)
Income Before Income Taxes			238,638				664,352				330,820				111,891
Income Tax Provisions			147,160				72,155				266,066				90,081
Net Income			91,478				592,197				64,754				21,810
Net Income Attributable to Noncontrolling Interests			13				63,005				78,228				89,658
Net (Loss) Income Attributable to Maison Solutions Inc.		$	91,465			$	529,192			$	(13,474	)		$	(67,848	)
(Loss) Income per Share Attributable to Maison Solutions, Inc. - Basic and Diluted		$	0.01			$	0.03			$	(0.00	)		$	(0.00	)
Weighted Average Number of Common Stock Outstanding - Basic and Diluted			16,780,220				16,000,000				16,298,913				16,000,000

MAISON SOLUTIONS INC.
CONSOLIDATED BALANCE SHEETS

		October 31, 2023 (Unaudited)				April 30, 2023
ASSETS
Current Assets
Cash and equivalents		$	8,601,347			$	2,569,766
Accounts receivable			554,517				315,356
Accounts receivable - related parties			160,876				289,615
Inventories, net			2,826,956				2,978,986
Prepayments			1,685,550				1,547,243
Other receivables and other current assets			387,813				550,836
Other receivable - related parties			33,995				33,995
Total Current Assets			14,251,054				8,285,797
Restricted cash - non-current			1,101				1,101
Property and equipment, net			570,027				671,463
Intangible assets			1,690,279				197,329
Security deposits			457,491				457,491
Investment under cost method - related parties			203,440				203,440
Investment under equity method			1,427,222				-
Operating lease right-of-use assets, net			21,523,046				22,545,190
Goodwill			2,222,211				2,222,211
Total Assets		$	42,345,871			$	34,584,022
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities
Accounts payable		$	2,955,910			$	3,105,592
Accounts payable - related parties			465,375				465,310
Note payable			150,000				150,000
Current portion of loan payables			201,165				370,828
Accrued expenses and other payables			955,779				867,796
Contract liabilities			317,155				449,334
Other payables - related parties			241,585				241,585
Operating lease liabilities - current			1,815,206				1,761,182
Income taxes payable			1,208,539				961,034
Total Current Liabilities			8,310,714				8,372,661
Long-term loan payables			2,529,014				2,561,299
Other long-term payables			111,314				105,637
Operating lease liabilities - non-current			21,784,685				22,711,760
Deferred tax liability, net			36,741				40,408
Total Liabilities			32,772,468				33,791,765
Stockholders' Equity
Class A Common stock, $0.0001 par value, 92,000,000 shares authorized; 16,260,000 and 13,760,000 shares issued and outstanding at October 31, 2023 and April 30, 2023, respectively			1,626				1,376
Class B Common stock, $0.0001 par value, 3,000,000 shares authorized; 2,240,000 shares issued and outstanding			224				224
Additional paid in capital			8,716,142				-
Retained earnings			509,236				522,710
Total Maison Solutions, Inc. Stockholders' Equity			9,227,228				524,310
Noncontrolling interests			346,175				267,947
Total Stockholders' Equity			9,573,403				792,257
Total Liabilities and Stockholders' Equity		$	42,345,871			$	34,584,022

MAISON SOLUTIONS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

		Six Months ended October 31,
		2023				2022
Cash flows from operating activities
Net income		$	64,754			$	21,810
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization expenses			127,451				244,848
Bad debt reversal			(105,322	)			-
Provision for inventory shrinkage reserve			(3,559	)			95,821
Investment loss			12,778				-
Changes in deferred taxes			(3,667	)			(18,511	)
Changes in operating assets and liabilities:
Accounts receivable			(239,161	)			(629,515	)
Accounts receivable - related party			129,105				213,125
Inventories			155,589				(489,928	)
Prepayments			(138,307	)			683,543
Other receivables and other current assets			268,343				(251,374	)
Accounts payable			(149,679	)			(116,322	)
Accounts payable - related party			(301	)			(432,360	)
Accrued expenses and other payables			87,983				(494,035	)
Contract Liabilities			(132,180	)			(106,202	)
Operating lease liabilities			149,093				100,470
Taxes payables			247,505				104,120
Other long-term payables			5,677				18,368
Net cash provided by (used in) operating activities			476,102				(1,056,142	)
Cash flows from investing activities
Payment for acquisition of subsidiary			-				(2,500,000	)
Payments of equipment purchase			(18,965	)			(12,500	)
Payments of intangible assets purchase			(1,500,000	)			-
Loans repaid from third parties			-				3,977,134
Investment into Good Fortune Arcadia			(1,440,000	)			-
Net cash (used in) provided by investing activities			(2,958,965	)			1,464,634
Cash flows from financing activities
Bank overdraft			-				(281,941	)
Repayments on loan payables			(201,948	)			(177,526	)
Repayments to related parties			-				(62,932	)
Borrowings from related parties			-				526,268
Net proceeds from issuance of common stock - IPO			8,716,392				-
Net cash provided by financing activities			8,514,444				3,869
Net changes in cash and restricted cash			6,031,581				412,361
Cash and restricted cash at the beginning of the period			2,570,867				972,431
Cash and restricted cash at the end of the period		$	8,602,448			$	1,384,792
Supplemental disclosure of cash and restricted cash
Cash		$	8,601,347			$	1,383,691
Restricted cash			1,101				1,101
Total cash and restricted cash		$	8,602,448			$	1,384,792
Supplemental disclosure of cash flow information
Cash paid for interest		$	63,683			$	14,357
Cash paid for income taxes		$	22,228			$	800

SOURCE: Maison Solutions, Inc.

View the original press release on accesswire.com

FAQ

What are Maison Solutions Inc.'s (MSS) financial results for the second quarter and first six months of fiscal 2024?

Maison Solutions Inc. reported total revenues of $13.8 million for the second quarter, with a decrease in perishable goods sales and an increase in gross profit. For the first six months of fiscal 2024, total revenues rose 7.6% to $27.5 million, with an increase in gross profit and a reduction in net loss.

What important milestone did Maison Solutions Inc. (MSS) reach in fiscal 2024?

Maison Solutions Inc. completed an IPO in October and a subsequent private placement in November, positioning the company for future growth.

What is the cash and equivalents position of Maison Solutions Inc. (MSS) at October 31, 2023?

At October 31, 2023, the Company had cash and equivalents of $8.6 million, up from $2.6 million at April 30, 2023.

What caused the reduction in total revenues for the second quarter for Maison Solutions Inc. (MSS)?

The reduction was mainly due to competition from two newly opened Asian supermarkets near the Company's store in San Gabriel as well as a reduction in online purchases as a result of customers returning to pre-pandemic shopping patterns and habits. Additionally, the Company generated slightly lower sales from perishable goods.

What were the reasons behind the reduction in operating income for the second quarter for Maison Solutions Inc. (MSS)?

The reduction was primarily due to higher selling expenses related to an increase in payroll and utility costs.

What were the factors contributing to the increase in net loss for the first six months of fiscal 2024 for Maison Solutions Inc. (MSS)?

The increase in net loss was mainly due to an increase in selling expenses, including payroll and store operating costs, as well as higher general and administrative expenses.