Jerash Holdings Reports Fiscal 2025 Third Quarter Financial Results

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

FAIRFIELD, NJ / ACCESS Newswire / February 11, 2025 / 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 2025 third quarter, ended December 31, 2024 . "While revenue increased by nearly 30 percent for the fiscal third quarter, results were lower than originally anticipated," Sam Choi , Jerash's chairman and chief executive officer, said. "Sales were impacted by congestion at Israel's Haifa port due to further geopolitical turmoil in the region, which, in turn, caused delays in shipments. We estimated approximately $3.8 million of finished apparel delivered at the port but not shipped until early in the fiscal fourth quarter, along with incurring more than $100,000 of port storage fees. Furthermore, we held back another $2 million of finished products in our warehouse for the same reason. We are pleased to report that the port logistics have markedly improved since late January, and ocean containers are being shipped in a more timely manner. "On the business front, we are continuing to receive inquiries from new and existing customers that are looking to add manufacturing partners in tariff-free countries such as Jordan . Jerash's long history and reputation for quality and performance place us in an excellent position to capture greater opportunities in the years ahead. "To support expected growth, we recently started expanding two existing manufacturing facilities, which will increase capacity by 15 percent; the project is expected to be completed by June 2025 . Separately, we are actively working with the Jordanian government to expand our existing facility in Al-Hasa, which by the end of this calendar year, could add an additional five to ten percent of production capacity. We also are assessing longer-term, larger-scale expansion plans. At the present, our factories are fully booked through August of this year." Choi added. Outlook Revenue for the fiscal 2025 fourth quarter is expected to increase by 50-53 percent, from $21.6 million in the same quarter last year. Revenue for the fiscal 2026 first quarter is expected to be in line with the fiscal 2025 first quarter of $40.9 million . Fiscal 2025 first quarter revenue was record high and included approximately $3-4 million of delayed shipments from the fiscal 2024 fourth quarter. Gross margin goal for fiscal 2025 fourth quarter is expected to be approximately 15-16 percent, subject to logistics, shipping charges and product mix. Fiscal 2025 Third Quarter Results Revenue for the fiscal 2025 third quarter increased 28.6 percent to $35.4 million , from $27.5 million in the same quarter last year, reflecting an increase in shipments to Jerash's major U.S. customers. Gross profit for the fiscal 2025 third quarter increased 20.6 percent to $5.4 million , from $4.5 million in the same quarter last year. Gross margin was 15.2 percent in the fiscal 2025 third quarter, compared with 16.2 percent in the same quarter last year. The decrease was primarily driven by higher logistic costs arising from the geopolitical turmoil in the Middle East region. Operating expenses totaled $4.7 million in the fiscal 2025 third quarter, compared with $4.1 million in the same quarter last year. The increase was primarily due to the increase in export logistic costs, as well as higher stock-based compensation expenses. Operating income increased 88.3 percent to $708,000 in the fiscal 2025 third quarter, from $376,000 in the same quarter last year. Total other expenses were $252,000 in the fiscal 2025 third quarter, compared with $105,000 in the same quarter last year. The increase was primarily due to higher interest expenses from supply chain financing programs provided by the two major customers. Income tax expenses for the fiscal 2025 third quarter were approximately $450,000 , compared with $39,000 for the same period in fiscal 2024. The increase was mainly due to a prior-year tax provision adjustment of approximately $274,000 . The effective tax rate was 98.6 percent for the fiscal 2025 third quarter, compared with 14.2 percent for the same period in fiscal 2024. Net income was $6,000 in the fiscal 2025 third quarter, or zero per diluted share, versus $232,000 , or $0.02 per diluted share, in the same quarter last year. Comprehensive loss attributable to the Company's common stockholders totaled $147,000 in the fiscal 2025 third quarter, compared with comprehensive income of $320,000 in the same period last year. Nine-Month Fiscal Year 2025 Results Revenue for the first nine months of fiscal year 2025 rose to $116.6 million , from $95.6 million in the same period last year, an increase of almost 22 percent. Gross profit was $17.1 million for the first nine months of fiscal year 2025, compared with $15.4 million for the same period last year. Gross margin for the first nine months of fiscal year 2025 was 14.7 percent, compared with 16.1 percent last year. This was negatively impacted by the higher logistic costs during the supply chain disruption in the first quarter of this fiscal year. Operating expenses for the first nine months of fiscal year 2025 were $16.1 million , compared with $13.0 million last year. Operating income was $1.0 million for the first nine months of fiscal year 2025, compared with $2.4 million for the same period last year. Net loss for the first nine months of fiscal 2025 was $696,000 , or $0.06 per share, compared with net income of $1.1 million , or $0.09 per share, for the same period last year. Comprehensive loss attributable to Jerash's common stockholders for the first nine months of fiscal 2025 was $820,000 , compared with comprehensive income of $1.0 million for the same period last year. Balance Sheet, Cash Flow and Dividends Cash and restricted cash totaled $14.8 million , and net working capital was $34.8 million as of December 31, 2024 . On February 5, 2025 , Jerash's board of directors approved a regular quarterly dividend of $0.05 per share on its common stock, payable on or about February 25, 2025 to stockholders of record as of February 18, 2025 . Conference Call Jerash will host an investor conference call to discuss its fiscal year 2025 third quarter results today, February 11, 2025 , at 9:00 a.m. Eastern Time . Phone: 888-506-0062 (domestic); 973-528-0011 (international) Conference ID: 383333 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, 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 . 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 [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 December 31 , For the Nine Months Ended December 31 , 2024 2023 2024 2023 Revenue, net $ 35,384,737 $ 27,520,121 $ 116,560,580 $ 95,612,886 Cost of goods sold 30,001,947 23,057,845 99,480,036 80,211,039 Gross Profit 5,382,790 4,462,276 17,080,544 15,401,847 Selling, general and administrative expenses 4,200,975 3,843,029 14,650,105 12,318,535 Stock-based compensation expenses 474,088 243,448 1,417,111 727,698 Total Operating Expenses 4,675,063 4,086,477 16,067,216 13,046,233 Income from Operations 707,727 375,799 1,013,328 2,355,614 Other Expenses: Interest expenses (364,939 ) (234,971 ) (1,348,291 ) (983,156 ) Other income, net 113,240 129,877 306,441 412,627 Total other expenses, net (251,699 ) (105,094 ) (1,041,850 ) (570,529 ) Net income (loss) before provision for income taxes 456,028 270,705 (28,522 ) 1,785,085 Income tax expenses 449,714 38,535 667,312 688,856 Net income (loss) 6,314 232,170 (695,834 ) 1,096,229 Net gain (loss) attributable to noncontrolling interest (12,120 ) (11,457 ) 100 (13,373 ) Net (loss) income attributable to Jerash Holdings (US), Inc.'s Common Stockholders $ (5,806 ) $ 220,713 $ (695,734 ) $ 1,082,856 Net income (loss) $ 6,314 $ 232,170 $ (695,834 ) $ 1,096,229 Other Comprehensive Income (Loss): Foreign currency translation (loss) income (140,969 ) 99,171 (124,473 ) (55,329 ) Total Comprehensive (Loss) Income (134,655 ) 331,341 (820,307 ) 1,040,900 Comprehensive (gain) loss attributable to noncontrolling interest (12,120 ) (11,457 ) 100 (13,373 ) Comprehensive (Loss) Income Attributable to Jerash Holdings (US), Inc.'s Common Stockholders $ (146,775 ) $ 319,884 $ (820,207 ) $ 1,027,527 Earnings/(Loss) Per Share Attributable to Common Stockholders: Basic and diluted $ (0.00 ) $ 0.02 $ (0.06 ) $ 0.09 Weighted Average Number of Shares Basic 12,294,840 12,294,840 12,294,840 12,294,840 Diluted 12,294,840 12,294,840 12,294,840 12,294,840 Dividend per share $ 0.05 $ 0.05 $ 0.15 $ 0.15 JERASH HOLDINGS (US) , INC., AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS December 31 , 2024 March 31 , 2024 (Unaudited) ASSETS Current Assets: Cash $ 13,219,109 $ 12,428,369 Accounts receivable, net 7,237,959 5,417,513 Inventories 19,118,133 27,241,573 Prepaid expenses and other current assets 3,676,154 2,746,068 Advance to suppliers, net 7,862,708 3,086,137 Total Current Assets 51,114,063 50,919,660 Restricted cash - non-current 1,563,809 1,608,498 Long-term deposits 1,109,073 802,306 Deferred tax assets, net 158,329 158,329 Property, plant, and equipment, net 24,394,170 24,998,096 Goodwill 499,282 499,282 Operating lease right of use assets 997,989 1,259,395 Total Assets $ 79,836,715 $ 80,245,566 LIABILITIES AND EQUITY Current Liabilities: Credit facilities $ 4,967,944 $ - Accounts payable 3,888,084 6,340,237 Accrued expenses 3,840,591 4,175,843 Income tax payable - current 1,128,634 1,647,199 Uncertain tax provision 273,582 - Other payables 1,825,970 2,234,870 Deferred revenue 58,642 10,200 Operating lease liabilities - current 325,615 370,802 Total Current Liabilities 16,309,062 14,779,151 Operating lease liabilities - non-current 344,412 618,302 Income tax payable - non-current - 417,450 Total Liabilities 16,653,474 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 25,334,205 23,917,094 Treasury stock, 239,478 shares (1,169,046 ) (1,169,046 ) Statutory reserve 413,821 413,821 Retained earnings 39,164,278 41,704,238 Accumulated other comprehensive loss (616,792 ) (492,319 ) Total Jerash Holdings (US), Inc. ' Stockholders' Equity 63,139,000 64,386,322 Noncontrolling interest 44,241 44,341 Total Equity 63,183,241 64,430,663 Total Liabilities and Equity $ 79,836,715 $ 80,245,566 JERASH HOLDINGS (US) , INC., AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Nine Months Ended December 31 , 2024 2023 CASH FLOWS FROM OPERATING ACTIVITIES Net (loss) income $ (695,834 ) $ 1,096,229 Adjustments to reconcile net (loss) income to net cash (used in) provided by operating activities: Depreciation 1,968,992 1,881,853 Stock-based compensation expenses 1,417,111 727,698 Credit loss recovery (17,054 ) (187,762 ) Amortization of operating lease right-of-use assets 447,646 601,727 Uncertain tax provision (273,582 ) - Changes in operating assets: Accounts receivable (1,803,392 ) (6,044,375 ) Bills receivable - (64,614 ) Inventories 8,123,439 16,719,185 Prepaid expenses and other current assets (930,084 ) 350,324 Advance to suppliers (4,776,571 ) (1,111,017 ) Changes in operating liabilities: Accounts payable (2,452,154 ) (3,380,984 ) Accrued expenses (335,251 ) (32,390 ) Other payables (408,900 ) 142,393 Deferred revenue 48,442 (927,488 ) Operating lease liabilities (505,317 ) (460,508 ) Income tax payable (388,766 ) (1,443,317 ) Net cash (used in) provided by operating activities (581,275 ) 7,866,954 CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property, plant, and equipment (491,676 ) (824,305 ) Payments for construction of properties (585,715 ) (3,158,501 ) Payment for long-term deposits (594,442 ) (281,153 ) Net cash used in investing activities (1,671,833 ) (4,263,959 ) CASH FLOWS FROM FINANCING ACTIVITIES Dividend payments (1,844,226 ) (1,844,226 ) Investment of noncontrolling interest - 31,365 Repayment from short-term loan (9,288,656 ) (4,937,633 ) Proceeds from short-term loan 14,256,600 4,937,633 Net cash provided by (used in) financing activities 3,123,718 (1,812,861 ) EFFECT OF EXCHANGE RATE CHANGES ON CASH AND RESTRICTED CASH (124,559 ) 24,677 NET INCREASE IN CASH AND RESTRICTED CASH 746,051 1,814,811 CASH, AND RESTRICTED CASH, BEGINNING OF THE PERIOD 14,036,867 19,411,603 CASH, AND RESTRICTED CASH, END OF THE PERIOD $ 14,782,918 $ 21,226,414 CASH AND RESTRICTED CASH, END OF THE PERIOD $ 14,782,918 $ 21,226,414 LESS: NON-CURRENT RESTRICTED CASH 1,563,809 1,608,784 CASH, END OF THE PERIOD $ 13,219,109 $ 19,617,630 Supplemental disclosure information: Cash paid for interest $ 1,348,291 $ 983,156 Income tax paid $ 1,329,150 $ 2,163,732 Non-cash investing and financing activities Equipment obtained by utilizing long-term deposit $ 289,451 $ 355,160 Operating lease right of use assets obtained in exchange for operating lease obligations $ 186,726 $ 177,068 SOURCE: Jerash Holdings (US), Inc. View the original press release on ACCESS Newswire

View stock analysis, news, and events for Jerash Holdings (us), Inc.