Jerash Holdings Reports Financial Results for Fiscal 2025 Second Quarter

About this update from Jerash Holdings (us), Inc.

- Revenue Increases 21 Percent; Gross Profit Rises 31 Percent - - Company Returns to Profitability as Global Customers Regain Confidence - FAIRFIELD, NJ / ACCESSWIRE / November 12, 2024 / Jerash Holdings (US), Inc. (NASDAQ:JRSH) (the "Company" or "Jerash"), which manufactures and exports custom, ready-made, sportswear and outerwear for leading global brands, today announced financial results for its fiscal 2025 second quarter, ended September 30, 2024 . "Results for our second fiscal quarter demonstrated confidence by our global customers working with Jerash and the competitive advantages of doing business in Jordan ," said Sam Choi , Jerash's chairman and chief executive officer. "Purchase orders for export shipments to our customers in the U.S. and Europe have been steadily increasing, and we are pleased to report that our factories are now fully booked through the first half of calendar year 2025. "Also, on a positive note from a geopolitical perspective, our export trade routes in the region returned to a more normalized environment in August, which, in turn, is positively affecting profitability. Gross margin for the fiscal second quarter increased to 17.5 percent from 16.1 percent a year ago, and from 11.3 percent in the preceding fiscal first quarter. "We are continuing to attract new global brands, further diversify our customer base, and expand product mix. We have good visibility well into fiscal 2026, and with momentum continuing, we are beginning to plan for a potential expansion of manufacturing capacity to support future growth," Choi added. Outlook Revenue for the fiscal 2025 third quarter is expected to increase by 35-38 percent from the same quarter last year; full-year revenue is expected to increase by 30-35 percent. Gross margin goal for fiscal year 2025 is expected to be approximately 14-15 percent, subject to logistics and shipping charges and product mix. Fiscal 2025 Second Quarter Results Fiscal 2025 second quarter revenue increased 20.6 percent to $40.2 million , from $33.4 million in the same period last year, reflecting an increase in shipments to Jerash's major U.S. customers. Gross profit for the fiscal 2025 second quarter increased 31.4 percent to $7.1 million from $5.4 million in the same quarter last year. Gross margin increased 140 basis points to 17.5 percent, from 16.1 percent in the same period last year. The expansion in gross margin was primarily due to higher production volume, with increased orders shipped to the U.S. customers that typically carry higher margins. Operating expenses totaled $5.9 million in the fiscal 2025 second quarter, compared with $4.5 million in the same period last year. The increase was primarily due to higher logistics costs to catch up with garment shipment schedules, and increased stock-based compensation expenses. Operating income increased to $1.1 million in the fiscal 2025 second quarter, from $888,000 in the same period last year. Total other expenses were $364,000 in the fiscal 2025 second quarter, versus $167,000 in the same quarter last year. The increase primarily reflected higher interest expenses. Net income in the fiscal 2025 second quarter increased 80.1 percent to $665,000 from $369,000 for the prior-year quarter. Net income per diluted share for the fiscal 2025 second quarter increased to $0.05 , from $0.03 in the same quarter last year. Comprehensive income attributable to the Company's common stockholders totaled $663,000 in the fiscal 2025 second quarter, compared with $306,000 in the same period last year. Six-Month Fiscal Year 2025 Results Revenue for the first six months of fiscal year 2025 rose to $81.2 million , from $68.1 million in the same period last year. Gross profit was $11.7 million for the first half of fiscal year 2025, compared with $10.9 million for the same period last year. Gross margin for the first six months of fiscal year 2025 was 14.4 percent, compared with 16.1 percent in the same period last year. Operating expenses for the first six months of fiscal year 2025 were $11.4 million , compared with $9.0 million for the same period last year. Operating income was $306,000 for the first six months of fiscal year 2025, compared with $2.0 million for the same period last year. Net loss for the first six months of fiscal year 2025 was $702,000 , or $0.06 per share, compared with net income of $864,000 , or $0.07 per share, in the same period last year. Comprehensive loss attributable to Jerash's common stockholders was $673,000 in the first six months of fiscal year 2025, compared with comprehensive income of $708,000 for the same period last year. Balance Sheet, Cash Flow, and Dividends Cash and restricted cash totaled $17.9 million , and net working capital was $35.2 million as of September 30, 2024 . Net cash provided by operating activities was approximately $2.4 million for the six-months ended September 30, 2024 , compared with $8.2 million for the same period last year. On November 8, 2024 , Jerash's board of directors approved a regular quarterly dividend of $0.05 per share on its common stock, payable on or about November 29, 2024 to stockholders of record as of November 22, 2024 . Conference Call Jerash Holdings will host an investor conference call to discuss its fiscal 2025 second quarter results today, November 12, 2024 , at 9:00 a.m. Eastern Time . Phone: 888-506-0062 (domestic); 973-528-0011 (international) Conference ID: 454213 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 6,000 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 . 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 [email protected] [email protected] # # #(tables below) JERASH HOLDINGS (US) , INC., AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) For the Three Months Ended September 30 , For the Six Months Ended September 30 , 2024 2023 2024 2023 Revenue, net $ 40,240,127 $ 33,357,108 $ 81,175,843 $ 68,092,765 Cost of goods sold 33,182,244 27,985,077 69,478,089 57,153,194 Gross Profit 7,057,883 5,372,031 11,697,754 10,939,571 Selling, general, and administrative expenses 5,449,386 4,240,588 10,449,130 8,475,506 Stock-based compensation expenses 474,088 243,448 943,023 484,250 Total Operating Expenses 5,923,474 4,484,036 11,392,153 8,959,756 Income from Operations 1,134,409 887,995 305,601 1,979,815 Other Income (Expenses): Interest expenses (503,149 ) (359,234 ) (983,352 ) (748,185 ) Other income, net 139,166 192,523 193,201 282,750 Total other expenses, net (363,983 ) (166,711 ) (790,151 ) (465,435 ) Net income (loss) before provision for income taxes 770,426 721,284 (484,550 ) 1,514,380 Income tax expenses 105,877 352,340 217,598 650,321 Net income (loss) 664,549 368,944 (702,148 ) 864,059 Net gain (loss) attributable to noncontrolling interest 9,261 3,327 (12,220 ) 1,916 Net income (loss) attributable to Jerash Holdings (US), Inc.'s Common Stockholders $ 655,288 $ 365,617 $ (689,928 ) $ 862,143 Net income (loss) $ 664,549 $ 368,944 $ (702,148 ) $ 864,059 Other Comprehensive Income (Loss): Foreign currency translation gain (loss) 7,583 (59,841 ) 16,496 (154,500 ) Total Comprehensive Income (Loss) 672,132 309,103 (685,652 ) 709,559 Comprehensive gain (loss) attributable to noncontrolling interest 9,261 3,327 (12,220 ) 1,916 Comprehensive Income (Loss) Attributable to Jerash Holdings (US), Inc.'s Common Stockholders $ 662,871 $ 305,776 $ (673,432 ) $ 707,643 Earnings (Loss) Per Share Attributable to Common Stockholders: Basic and diluted $ 0.05 $ 0.03 $ (0.06 ) $ 0.07 Weighted Average Number of Shares Basic 12,294,840 12,294,840 12,294,840 12,294,840 Diluted 12,460,241 12,294,840 12,294,840 12,294,840 Dividend per share $ 0.05 $ 0.05 $ 0.10 $ 0.10 JERASH HOLDINGS (US) , INC., AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS September 30 , 2024 March 31 , 2024 (Unaudited) ASSETS Current Assets: Cash $ 16,338,578 $ 12,428,369 Accounts receivable, net 5,793,228 5,417,513 Inventories 20,206,799 27,241,573 Prepaid expenses and other current assets 3,216,845 2,746,068 Advance to suppliers, net 6,028,433 3,086,137 Total Current Assets 51,583,883 50,919,660 Restricted cash - non-current 1,545,457 1,608,498 Long-term deposits 852,842 802,306 Deferred tax assets, net 158,329 158,329 Property, plant, and equipment, net 24,674,730 24,998,096 Goodwill 499,282 499,282 Operating lease right of use assets 1,033,412 1,259,395 Total Assets $ 80,347,935 $ 80,245,566 LIABILITIES AND EQUITY Current Liabilities: Credit facilities $ 3,570,237 $ - Accounts payable 4,394,732 6,340,237 Accrued expenses 3,654,895 4,175,843 Income tax payable - current 952,108 1,647,199 Other payables 2,368,807 2,234,870 Deferred revenue 1,123,163 10,200 Operating lease liabilities - current 343,868 370,802 Total Current Liabilities 16,407,810 14,779,151 Operating lease liabilities - non-current 481,575 618,302 Income tax payable - non-current - 417,450 Total Liabilities 16,889,385 15,814,903 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; 12,534,318 shares issued and 12,294,840 shares outstanding 12,534 12,534 Additional paid-in capital 24,860,117 23,917,094 Treasury stock, 239,478 shares (1,169,046 ) (1,169,046 ) Statutory reserve 413,821 413,821 Retained earnings 39,784,826 41,704,238 Accumulated other comprehensive loss (475,823 ) (492,319 ) Total Jerash Holdings (US), Inc. Stockholders' Equity 63,426,429 64,386,322 Noncontrolling interest 32,121 44,341 Total Equity 63,458,550 64,430,663 Total Liabilities and Equity $ 80,347,935 $ 80,245,566 JERASH HOLDINGS (US) , INC.,AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Six Months Ended September 30 , 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income $ (702,148 ) $ 864,059 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation and amortization 1,209,053 1,224,322 Stock-based compensation expenses 943,023 484,250 Credit Loss (recovery) 16,768 (66,980 ) Amortization of operating lease right-of-use assets 300,559 416,090 Changes in operating assets: Accounts receivable (392,484 ) (2,894,162 ) Bills receivable - 87,573 Inventories 7,034,774 13,942,970 Prepaid expenses and other current assets (470,777 ) 814,878 Advance to suppliers (2,942,296 ) (1,910,244 ) Changes in operating liabilities: Accounts payable (1,945,505 ) (1,530,458 ) Accrued expenses (520,948 ) (251,048 ) Other payables 133,937 (265,119 ) Deferred revenue 1,112,963 (696,006 ) Operating lease liabilities (238,237 ) (336,984 ) Income tax payable (1,112,062 ) (1,704,261 ) Net cash provided by operating activities 2,426,620 8,178,880 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant, and equipment (348,238 ) (635,878 ) Payments for construction of properties (270,599 ) (2,575,669 ) Payment for long-term deposits (317,386 ) (247,610 ) Net cash used in investing activities (936,223 ) (3,459,157 ) CASH FLOWS FROM FINANCING ACTIVITIES Dividend payments (1,229,484 ) (1,229,484 ) Investment of noncontrolling interest - 31,365 Repayment from short-term loan (5,566,040 ) (3,118,339 ) Proceeds from short-term loan 9,136,277 3,118,339 Net cash provided by (used in) financing activities 2,340,753 (1,198,119 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND RESTRICTED CASH 16,018 (123,491 ) NET INCREASE IN CASH AND RESTRICTED CASH 3,847,168 3,398,113 CASH, AND RESTRICTED CASH, BEGINNING OF THE PERIOD 14,036,867 19,411,603 CASH, AND RESTRICTED CASH, END OF THE PERIOD $ 17,884,035 $ 22,809,716 CASH, AND RESTRICTED CASH, END OF THE PERIOD $ 17,884,035 $ 22,809,716 LESS: NON-CURRENT RESTRICTED CASH 1,545,457 1,608,074 CASH, END OF THE PERIOD $ 16,338,578 $ 21,201,642 Supplemental disclosure information: Cash paid for interest $ 983,352 $ 748,185 Income tax paid $ 1,329,150 $ 2,371,705 Non-cash investing and financing activities Equipment obtained by utilizing long-term deposit $ 262,017 $ 358,620 Operating lease right of use assets obtained in exchange for operating lease obligations $ 67,512 $ 177,068 SOURCE: Jerash Holdings (US), Inc. 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