TOKYO, July 31,
2023 /PRNewswire/ -- Yoshitsu Co., Ltd ("Yoshitsu" or
the "Company") (Nasdaq: TKLF), a retailer and wholesaler of
Japanese beauty and health products, as well as sundry products and
other products in Japan, today
announced its financial results for the fiscal year ended
March 31, 2023.
Mr. Mei Kanayama, Principal
Executive Officer of Yoshitsu, commented, "I am pleased to present
our financial results for fiscal year 2023. Despite the challenges
of the global pandemic, we demonstrated resilience and strategic
agility in adapting to market changes. In light of the impact of a
COVID-19 resurgence on our global operations, we have shifted our
geographic market strategy to focus toward the domestic
Japan market, which revenue
generated from Japan market
accounted for 42.5% of our total revenue in fiscal year 2023, up
from 9.4% of our total revenue in fiscal year 2022. We believe this
change has been a strategic success, allowing us to maintain
stability during turbulent times.
"In terms of our distribution channels, although we experienced
a slight decrease in revenue from our directly-operated physical
stores in Japan, we managed to
increase our sales in Hong Kong.
This validates our decision to diversify our market footprint and
shows that our offerings resonate with different customer bases. We
mitigated the downturn in our online segment by entrusting the
operations of some of our overseas online stores to third-party
companies, which we believe, has brought stability to our financial
performance and provided us with valuable operational insights. We
also increased our revenue from Key Opinion Leader ("KOL") services
in fiscal year 2023, leveraging our influential social media
presence.
"Furthermore, we made a strategic move in terms of our
distribution channels, shifting the focus to franchise stores and
wholesale customers, which accounted for 81.0% of our total revenue
in fiscal year 2023, up from 42.4% of our total revenue in fiscal
year 2022. We believe that this strategic shift has helped us adapt
to supply chain disruptions and increased our resilience in the
face of future uncertainties. We plan to further expand in the
domestic Japan market, adopting an
asset-light franchise model. We believe that this innovative model
will enhance our financial strength and reinforce our reputation in
the domestic Japan market.
"In addition to the domestic expansion, we also plan to expand
overseas for a more diversified range of global markets. We are
excited about the potential of these markets, since the consumers
in overseas markets, like North
America and Europe, are
believed to have high purchasing power. To seize the global
opportunity, we are developing a new shopping App that focuses on
delivering authentic, high-quality, and innovative Japanese
products. We expect the App to attract a wide array of worldwide
shoppers fond of Japanese culture and products. Looking ahead, we
will continue to focus on enhancing our distribution channels,
strengthening our digital presence, and capitalizing on
opportunities in a more diversified range of markets."
Mr. Youichiro Haga, Principal Accounting and Financial Officer
of Yoshitsu, stated, "In fiscal year 2023, our revenue has been
negatively affected by the dual impact of currency
fluctuations—specifically the significant depreciation of the
Japanese yen against the U.S. dollar—and the substantial effects of
the COVID-19 pandemic in China.
"Despite the challenging circumstances, we have implemented
strategic measures that have proved effective. The resurgence of
COVID-19 globally had an adverse impact on our overseas sales, but
we successfully navigated this downturn by focusing on the domestic
market in Japan. Our revenue
generated from the domestic Japan
market increased to $72.2 million in
fiscal year 2023 from $22.0 million
in fiscal year 2022.
"Simultaneously, we embarked on another strategic initiative by
moving towards franchise stores and wholesale customers. This
decision has yielded positive results with an upsurge in revenue
from franchise stores and wholesale customers by 37.9% to
$137.4 million in fiscal year
2023.
"Discounting the impact of foreign currency translation, our
directly-operated physical stores in Japan managed to maintain relative revenue
stability, marking a slight decrease of 4.5% for fiscal year 2023.
We are also excited to report the strong performance of our
physical stores in Hong Kong,
which reported a robust 41.2% increase in revenue. We believe this
is a testament to the success of our new store opening strategy in
the region. The rise in revenue from advertising services through
collaborations with KOL has helped to partially offset the downturn
of total revenue decline. This demonstrates the promising potential
of this new revenue stream that we are keen to further explore in
our future endeavors.
"As we look ahead, our focus is on strategic cost management,
enhancing operational efficiency, and building financial
resilience. We are acutely aware of the challenges that the current
environment presents, but our agile business model, combined
with a laser focus on our strategic objectives, gives us confidence
in a prosperous future."
Fiscal Year 2023 Financial Results
Revenue
Revenue decreased by $65.0
million, or 27.7%, to $169.7
million for fiscal year 2023, from $234.8 million for fiscal year 2022. The decrease
in the Company's revenue was primarily due to decreased revenue
from online stores and services and directly-operated physical
stores, which was partially offset by the increased revenue from
franchise stores and wholesale customers.
|
|
For the Years Ended
March 31,
|
|
|
2023
|
|
|
2022
|
($
millions)
|
|
Revenue
|
|
|
Cost of
Revenue
|
|
|
Gross
Margin
|
|
|
Revenue
|
|
|
Cost of
Revenue
|
|
|
Gross
Margin
|
Directly-operated
physical
stores
|
|
|
11.6
|
|
|
|
8.9
|
|
|
|
23.5 %
|
|
|
|
13.0
|
|
|
|
11.3
|
|
|
|
13.1 %
|
Online stores and
others
|
|
|
20.7
|
|
|
|
16.2
|
|
|
|
21.6 %
|
|
|
|
122.2
|
|
|
|
98.6
|
|
|
|
19.3 %
|
Franchise stores and
wholesale
customers
|
|
|
137.4
|
|
|
|
115.2
|
|
|
|
16.2 %
|
|
|
|
99.6
|
|
|
|
81.2
|
|
|
|
18.5 %
|
Total
|
|
|
169.7
|
|
|
|
140.3
|
|
|
|
17.3 %
|
|
|
|
234.8
|
|
|
|
191.0
|
|
|
|
18.6 %
|
Revenue from directly-operated physical stores decreased by
$1.4 million, or 10.5%, to
$11.6 million for fiscal year 2023,
from $13.0 million for fiscal year
2022. The decrease was mainly due to the depreciation of the
Japanese yen against U.S. dollars; the average translation rate for
fiscal years 2023 and 2022 was at ¥1=US$0.007402 and ¥1=US$0.008908, respectively, a significant decrease
of 16.9%. The Company's revenue generated from its
directly-operated physical stores in Japan (excluding the impact of foreign
currency translation) remained relatively stable with a slight
decrease by 4.5% for fiscal year 2023 as compared to the same
period last year. The decrease was mainly due to the relocation of
one of the Company's popular directly-operated physical stores, as
a result of a municipal construction project conducted by the local
government, which was partially offset by the increased revenue
generated from other directly-operated physical stores as the
Company's business gradually recovered from the impact of COVID-19.
However, due to the significant depreciation of the Japanese yen
against U.S. dollars, revenue generated from the Company's
directly-operated physical stores in Japan decreased for fiscal year 2023 as
compared to the same period last year. The decrease was partially
offset by the increase in revenue generated from the
directly-operated physical stores in Hong
Kong by 41.2% to $3.0 million
for fiscal year 2023 from $2.1
million for fiscal year 2022. The increase in revenue from
directly-operated physical stores was mainly contributed from newly
opened physical stores during fiscal year 2023.
Revenue from online stores and services decreased by
$101.5 million, or 83.1%, to
$20.7 million for fiscal year 2023,
from $122.2 million for fiscal year
2022. The decrease was mainly due to the significant decrease in
revenue generated by the Company's online stores sales during
fiscal year 2023 by 84.6%, to $18.6
million for fiscal year 2023, from $121.2 million for fiscal year 2022. Due to a
resurgence of the COVID-19 pandemic in late March 2022 in China, which resulted in shipping container
shortages and stricter border control protocols, shipments and
customs clearance for overseas imports were delayed. The online
sales in China were significantly
constrained, due to the inability to deliver the products to the
Company's customers as a consequence of mobility restrictions and
lockdowns imposed in certain provinces across China. Although the situation has eased since
June 2022, due to the continuous
impact from the COVID-19 pandemic, the Company's business continued
to be affected by local outbreaks in cities across China. In early December 2022, China announced a nationwide loosening of its
Zero-COVID policy, with a lifting of most of the travel
restrictions and quarantine requirements. As a result, there were
significant surges of COVID-19 cases in many cities in China during the period from December 2022 to January
2023. Hence, the Company's online sales volume in
China did not return to its normal
level as compared to the same period of last year. The decrease was
also due to a shift in the Company's business strategy since
August 2022, instead of operating the
online stores by the Company itself, it entrusted the entire
operations of some of the Company's overseas online stores to
third-party companies to minimize the operating risk. After the
change, these third-party companies purchased products from us like
other wholesale customers, and hence this portion of revenue was
recorded under franchise stores and wholesale customers. The
decrease was also exacerbated by the significant depreciation of
the Japanese yen against U.S. dollars, as mentioned above. The
decrease was partially offset by the increased revenue from online
stores and services generated by companies in Hong Kong and other by 112.7%, to $2.1 million for fiscal year 2023 from
$1.0 million for fiscal year 2022.
The increase was mainly due to increased revenue from advertising
services through KOL. As the total followers of the Company's KOL
on various social media platforms increased significantly during
fiscal year 2023, the number of advertisements requests from the
Company's customers and the price per piece of advertisement
increased, which led to a significant increase in revenue generated
from KOL services for fiscal years 2023.
Revenue from franchise stores and wholesale customers increased
by $37.8 million, or 37.9%, to
$137.4 million for fiscal year 2023,
from $99.6 million for fiscal year
2022. The increase was mainly due to the increase in revenue
generated from domestic franchise stores and wholesale customers by
companies in Japan during fiscal
year 2023 by 64.6%, to $122.4 million
for fiscal year 2023, from $74.4
million for fiscal year 2022. The Company's revenue
generated from domestic franchise stores and wholesale customers
(excluding the impact of foreign currency translation) increased
significantly by 10,977.1% for fiscal year 2023 as compared to last
year. The increase was due to a shift in the Company's business
strategy when its overseas sales were adversely affected by the
COVID-19 resurgence. With the high demand for the Company's
products, it managed to modify its business strategy by developing
and selling its products in the domestic market. Its revenue
generated by companies in Japan
from overseas franchise stores and wholesale customers (excluding
the impact of foreign currency translation) also increased by 27.1%
for fiscal year 2023 as compared to last year. The increase was
mainly due to the increased revenue previously recognized under
online stores due to the shift in business strategy as mentioned
above. However, the increase in revenue from overseas franchise
stores and wholesale customers by companies in Japan was partially offset by the COVID-19
resurgence in China, as its
overseas shipments were delayed or limited due to the shipping
container shortages caused by the COVID-19 pandemic and increased
shipping charges, as well as fewer orders it received from its
overseas franchise stores and wholesale customers when their
business was impacted by the COVID-19 pandemic. Overall, the
Company's revenue from franchise stores and wholesale customers
sales generated by companies in Japan increased despite the impact from
significant depreciation of the Japanese yen against U.S. dollars,
as mentioned above. The increase was partially offset by the
decreased revenue from franchise stores and wholesale customers
generated by companies in Hong
Kong and other by 40.6%, to $15.0
million for fiscal year 2023, from $25.2 million for fiscal year 2022. The decrease
was due to the impact of COVID-19 resurgence as mentioned
above.
Gross Profit and Gross Margin
Total cost of revenue decreased by $50.7
million, or 26.6%, to $140.3
million for fiscal year 2023, from $191.0 million for fiscal year 2022.
Gross profit decreased by $14.3
million, or 32.7%, to $29.4
million for fiscal year 2023, from $43.7 million for fiscal year 2022. Overall gross
margin decreased by 1.3 percentage points to 17.3% for fiscal year
2023, from 18.6% for fiscal year 2022.
Gross margin for directly-operated physical stores, online
stores and others, and franchise stores and wholesale customers
were 23.5%, 21.6%, and 16.2%, respectively, for fiscal year 2023,
compared to 13.1%, 19.3%, and 18.5%, respectively, for fiscal year
2022.
Operating Expenses
Operating expenses consist of selling and marketing expenses and
general and administrative expenses, which primarily include
payroll, employee benefit expenses and bonus expenses, shipping
expenses, promotion and advertising expenses, and other
facility-related costs, such as store rent, utilities, and
depreciation.
Operating expenses decreased by $7.8
million, or 21.5%, to $28.6
million for fiscal year 2023, from $36.4 million for fiscal year 2022. The Company's
operating expenses decreased for fiscal year 2023 as compared to
fiscal year 2022, mainly due to a decrease in shipping expenses,
promotion and advertising expenses, and transaction commission paid
to third-party e-commerce marketplace operators, which were
partially offset by an increase in consulting and professional
service fee, payroll, employee benefit expenses, and bonus
expenses, and bad debt expenses.
Interest Expenses, net
Interest expenses, net include interest expenses calculated at
interest rate per loan agreements and loan service costs, which
were directly incremental to the loan agreements and amortized over
the loan periods. Interest expenses, net decreased by $0.4 million, or 13.1%, to $2.4 million for fiscal year 2023, from
$2.8 million for fiscal year
2022.
Additional and Delinquent Tax Due to Consumption Tax
Correction
Since January 2022, the Tokyo
Regional Taxation Bureau had conducted a tax examination into the
Company's consumption tax filing for the period from July 2018 to December
2021. As a result of the examination completed in
May 2023, the Company was required to
return a consumption tax refund for export transactions that were
determined not to meet the tax exemption requirements due to
incomplete submission of relevant export documents. As the failure
in submission of relevant export documents was caused by the
Company's suppliers and customers, the Company entered into
agreements with relevant suppliers and customers to claim
compensation for this matter. As a result, the consumption tax to
be returned was fully covered by the compensation we claimed from
these suppliers and customers. The Company expects this matter will
not affect the Company's operation in the coming years.
Other Income, net
Other income, net primarily includes tax refunds, disposal gain
or loss from property and equipment, government subsidies, and
other immaterial income and expense items. Other income, net
decreased by $585,061, or 97.8%, to
$13,145 for fiscal year 2023, from
$598,206 for fiscal year 2022. The
decrease was mainly due to decreased receipt of government
subsidies as the financial support during the COVID-19 pandemic, as
well as an increased loss from disposal of property and equipment
during the fiscal year ended March 31,
2023.
Provision for Income Taxes
Provision for income taxes decreased by $1.5 million, or 68.0%, to $0.7 million for fiscal year 2023, from
$2.2 million for fiscal year 2022.
The decrease in provision for income taxes was mainly due to the
decreased current income tax expenses resulted from the decreased
taxable income for the fiscal year ended March 31, 2023, which was partially offset by
increased deferred income tax expenses resulted from compensation
receivable in relation to an examination on consumption tax by the
tax authority.
Net Loss (Income)
Net loss was $8.0 million, or
$0.22 per basic and diluted share for
fiscal year 2023, compared to net income of $3.9 million, or $0.12 per basic and diluted share for fiscal year
2022.
Financial Condition
As of March 31, 2023, the Company
had cash of $1.8 million, compared to
$18.3 million as of March 31, 2022. As of March 31, 2023, the Company had accounts
receivable balances due from third parties of $89.4 million, compared to $41.0 million as of March
31, 2022. Approximately 33.4% of the March 31, 2023 balance has been subsequently
collected, and the remaining balance is expected to be collected by
September 30, 2023. The collected
balances of such receivables provide cash available for use in the
Company's operations as working capital, if necessary. As of
March 31, 2023, the Company had
merchandise inventories of $7.2
million, which the Company believes can be sold quickly,
based on its analysis of the current trends in demand for its
products, compared to $31.4 million
as of March 31, 2022.
Net cash used in operating activities was $25.7 million for fiscal year 2023, mainly
derived from net loss of $8.0 million
for the year, reconciled by provision for doubtful accounts of
$3.5 million and deferred tax
provision of $4.8 million, and net
changes in the Company's operating assets and liabilities, which
mainly included an increase in accounts receivable from third
parties of $53.8 million which was
due to the delayed shipments and longer payment processing
procedures as affected by the COVID-19 outbreak. Net cash used in
operating activities was $7.0 million
for fiscal year 2023, mainly derived from net income of
$3.9 million for the year, and net
changes in the Company's operating assets and liabilities, which
mainly included an increase in merchandise inventories of
$6.1 million as the Company increased
the stockpile of inventories in anticipation of increased sales in
the coming months.
Net cash used in investing activities was $0.7 million for fiscal year 2023, mainly due to
purchases of property and equipment in the aggregate amount of
$0.9 million, partially offset by the
repayments from related parties of $0.2
million. Net cash used in investing activities was
$3.1 million for fiscal year 2022,
mainly due to purchases of property and equipment in the aggregate
amount of $3.0 million.
Net cash provided by financing activities was $12.7 million for fiscal year 2023, which
primarily consisted of proceeds from short-term borrowings of
$78.8 million, partially offset by
repayments of short-term borrowings of $55.5
million and repayments of long-term borrowings of
$9.8 million. Net cash provided by
financing activities was $13.8
million for fiscal year 2022, which primarily consisted of
net proceeds from the Company's IPO of $22.1
million, proceeds from short-term borrowings of $282.2 million, and proceeds from long-term
borrowings of $17.1 million,
partially offset by repayments of short-term borrowings of
$303.1 million.
About Yoshitsu Co., Ltd
Headquartered in Tokyo, Japan,
Yoshitsu Co., Ltd is a retailer and wholesaler of Japanese beauty
and health products, sundry products, and other products in
Japan. The Company offers various
beauty products (including cosmetics, skincare, fragrance, and body
care products), health products (including over-the-counter drugs,
nutritional supplements, and medical supplies and devices), sundry
products (including home goods), and other products (including food
and alcoholic beverages). The Company currently sells its products
through directly-operated physical stores, through online stores,
and to franchise stores and wholesale customers. For more
information, please visit the Company's website at
https://www.ystbek.co.jp/irlibrary/.
Forward-Looking Statements
All statements other than statements of historical fact in
this press release are forward-looking statements, within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and as defined in the U.S. Private Securities Litigation
Reform Act of 1995. These forward-looking statements involve known
and unknown risks and uncertainties and are based on current
expectations and projections about future events and financial
trends that the Company believes may affect its financial
condition, results of operations, business strategy, and financial
needs. Investors can identify these forward-looking statements by
words or phrases such as "may," "will," "expect," "anticipate,"
"aim," "estimate," "intend," "plan," "believe," "potential,"
"continue," "is/are likely to," or other similar expressions. The
Company undertakes no obligation to update forward-looking
statements to reflect subsequent occurring events or circumstances,
or changes in its expectations, except as may be required by law.
In addition, there is uncertainty about the further spread of the
COVID-19 virus 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. Although the Company believes that the expectations
expressed in these forward-looking statements are reasonable, it
cannot assure you that such expectations will turn out to be
correct, and the Company cautions investors that actual results may
differ materially from the anticipated results and encourages
investors to review other factors that may affect its future
results in the Company's registration statement and in its other
filings with the U.S. Securities and Exchange Commission.
For more information, please contact:
Yoshitsu Co., Ltd
Investor Relations Department
Email: ir@ystbek.co.jp
Ascent Investors Relations LLC
Tina Xiao
President
Phone: +1-917-609-0333
Email: tina.xiao@ascent-ir.com
YOSHITSU CO.,
LTD
|
CONSOLIDATED BALANCE
SHEETS
|
|
|
|
March
31,
|
|
|
March
31,
|
|
|
|
2023
|
|
|
2022
(1)
|
|
ASSETS
|
|
|
|
|
|
|
CURRENT
ASSETS:
|
|
|
|
|
|
|
Cash
|
|
$
|
1,766,441
|
|
|
$
|
18,266,000
|
|
Accounts receivable,
net
|
|
|
89,447,155
|
|
|
|
40,959,958
|
|
Accounts receivable -
related parties, net
|
|
|
327,807
|
|
|
|
595
|
|
Merchandise
inventories, net
|
|
|
7,187,800
|
|
|
|
31,351,002
|
|
Due from related
parties
|
|
|
444,567
|
|
|
|
694,428
|
|
Compensation receivable
for consumption tax, current
|
|
|
3,912,719
|
|
|
|
-
|
|
Prepaid expenses and
other current assets, net
|
|
|
3,542,864
|
|
|
|
10,617,045
|
|
TOTAL CURRENT
ASSETS
|
|
|
106,629,353
|
|
|
|
101,889,028
|
|
|
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
12,938,598
|
|
|
|
13,319,503
|
|
Operating lease
right-of-use assets
|
|
|
2,709,954
|
|
|
|
4,209,681
|
|
Long term
investment
|
|
|
169,148
|
|
|
|
168,509
|
|
Compensation receivable
for consumption tax, non-current, net
|
|
|
19,230,370
|
|
|
|
-
|
|
Long-term prepaid
expenses and other non-current assets, net
|
|
|
4,997,857
|
|
|
|
7,366,719
|
|
Deferred tax assets,
net
|
|
|
-
|
|
|
|
518,909
|
|
TOTAL
ASSETS
|
|
$
|
146,675,280
|
|
|
$
|
127,472,349
|
|
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
|
|
|
|
|
Short-term
borrowings
|
|
$
|
60,636,412
|
|
|
$
|
40,328,982
|
|
Current portion of
long-term borrowings
|
|
|
2,783,445
|
|
|
|
1,454,378
|
|
Accounts
payable
|
|
|
12,719,160
|
|
|
|
8,035,353
|
|
Accounts payable -
related parties
|
|
|
-
|
|
|
|
132,047
|
|
Due to related
parties
|
|
|
297,559
|
|
|
|
193,841
|
|
Deferred
revenue
|
|
|
146,024
|
|
|
|
104,663
|
|
Taxes
payable
|
|
|
18,219,803
|
|
|
|
740,552
|
|
Operating lease
liabilities, current
|
|
|
1,323,900
|
|
|
|
1,951,408
|
|
Finance lease
liabilities, current
|
|
|
369,786
|
|
|
|
320,555
|
|
Representative's
warrants liability
|
|
|
24,663
|
|
|
|
181,740
|
|
Other payables and
other current liabilities
|
|
|
1,520,756
|
|
|
|
3,371,836
|
|
TOTAL CURRENT
LIABILITIES
|
|
|
98,041,508
|
|
|
|
56,815,355
|
|
|
|
|
|
|
|
|
|
|
Operating lease
liabilities, non-current
|
|
|
1,416,508
|
|
|
|
2,308,885
|
|
Finance lease
liabilities, non-current
|
|
|
622,922
|
|
|
|
673,612
|
|
Long-term
borrowings
|
|
|
10,326,399
|
|
|
|
21,117,985
|
|
Other non-current
liabilities
|
|
|
2,535,123
|
|
|
|
2,104,472
|
|
Deferred tax
liabilities, net
|
|
|
4,451,077
|
|
|
|
-
|
|
TOTAL
LIABILITIES
|
|
$
|
117,393,537
|
|
|
$
|
83,020,309
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Ordinary shares,
100,000,000 shares authorized; 36,250,054 shares and 36,250,054
shares issued and outstanding as of March 31, 2023 and 2022,
respectively
|
|
|
14,694,327
|
|
|
|
14,694,327
|
|
Capital
reserve
|
|
|
9,078,915
|
|
|
|
11,921,065
|
|
Retained
earnings
|
|
|
13,577,844
|
|
|
|
21,626,666
|
|
Accumulated other
comprehensive loss
|
|
|
(8,069,343)
|
|
|
|
(3,790,018)
|
|
TOTAL SHAREHOLDERS'
EQUITY
|
|
|
29,281,743
|
|
|
|
44,452,040
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|
$
|
146,675,280
|
|
|
$
|
127,472,349
|
|
(1)
|
The financial
information presented in this report has been retrospectively
adjusted for the acquisition of Tokyo
Lifestyle Limited.
|
YOSHITSU CO.,
LTD
|
CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
|
|
|
|
For the Fiscal Years
Ended March 31
|
|
|
|
2023
|
|
|
2022
(1)
|
|
|
2021
(1)
|
|
|
|
|
|
|
|
|
|
|
|
REVENUE
|
|
|
|
|
|
|
|
|
|
Revenue – third
parties
|
|
$
|
168,876,360
|
|
|
$
|
234,508,821
|
|
|
$
|
224,596,524
|
|
Revenue – related
parties
|
|
|
847,986
|
|
|
|
243,759
|
|
|
|
162,032
|
|
Total
revenue
|
|
|
169,724,346
|
|
|
|
234,752,580
|
|
|
|
224,758,556
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COSTS AND OPERATING
EXPENSES
|
|
|
|
|
|
|
|
|
|
|
|
|
Merchandise
costs
|
|
|
140,293,419
|
|
|
|
191,040,547
|
|
|
|
181,501,073
|
|
Selling, general and
administrative expenses
|
|
|
28,607,088
|
|
|
|
36,422,772
|
|
|
|
32,540,922
|
|
Total operating
expenses
|
|
|
168,900,507
|
|
|
|
227,463,319
|
|
|
|
214,041,995
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME FROM
OPERATIONS
|
|
|
823,839
|
|
|
|
7,289,261
|
|
|
|
10,716,561
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER INCOME
(EXPENSE)
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest expense,
net
|
|
|
(2,422,079)
|
|
|
|
(2,785,766)
|
|
|
|
(2,187,400)
|
|
Additional and
delinquent tax due to consumption tax correction
|
|
|
(6,622,486)
|
|
|
|
-
|
|
|
|
-
|
|
Other income,
net
|
|
|
13,145
|
|
|
|
598,206
|
|
|
|
341,880
|
|
Gain (loss) from
foreign currency exchange
|
|
|
718,990
|
|
|
|
833,547
|
|
|
|
(582,424)
|
|
Change in fair value of
representative's warrants liability
|
|
|
139,615
|
|
|
|
369,404
|
|
|
|
-
|
|
Income (loss) from
equity method investment
|
|
|
14,554
|
|
|
|
(145,828)
|
|
|
|
(29,242)
|
|
Total other expenses,
net
|
|
|
(8,158,261)
|
|
|
|
(1,130,437)
|
|
|
|
(2,457,186)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) BEFORE
INCOME TAX PROVISION
|
|
|
(7,334,422)
|
|
|
|
6,158,824
|
|
|
|
8,259,375
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES
|
|
|
714,400
|
|
|
|
2,234,676
|
|
|
|
3,307,048
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
(LOSS)
|
|
|
(8,048,822)
|
|
|
|
3,924,148
|
|
|
|
4,952,327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
LOSS
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency
translation loss
|
|
|
(4,279,325)
|
|
|
|
(3,466,261)
|
|
|
|
(605,832)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL COMPREHENSIVE
INCOME (LOSS)
|
|
$
|
(12,328,147)
|
|
|
$
|
457,887
|
|
|
$
|
4,346,495
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
ordinary share – basic and diluted
|
|
$
|
(0.22)
|
|
|
$
|
0.12
|
|
|
$
|
0.18
|
|
Weighted average
shares – basic and diluted*
|
|
|
36,250,054
|
|
|
|
32,678,625
|
|
|
|
27,526,689
|
|
*
|
Retrospectively
restated for effect of a 294-for-1 forward split on August 18,
2021.
|
(1)
|
The financial
information presented in this report has been retrospectively
adjusted for the acquisition of Tokyo
Lifestyle Limited.
|
YOSHITSU CO.,
LTD
|
CONSOLIDATED
STATEMENTS OF CASH FLOWS
|
|
|
|
For the Fiscal Years
Ended March 31
|
|
|
|
2023
|
|
|
2022
(1)
|
|
|
2021
(1)
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net Income
(loss)
|
|
$
|
(8,048,822)
|
|
|
$
|
3,924,148
|
|
|
$
|
4,952,327
|
|
Adjustments to
reconcile net income (loss) to net cash used in
operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
1,226,496
|
|
|
|
1,217,455
|
|
|
|
626,188
|
|
Loss from disposal of
property and equipment
|
|
|
329,580
|
|
|
|
35,803
|
|
|
|
86,459
|
|
Loss (gain) from
unrealized foreign currency translation
|
|
|
282,131
|
|
|
|
(662,345)
|
|
|
|
127,208
|
|
Provision for (reversal
of) doubtful accounts
|
|
|
3,471,953
|
|
|
|
(278,642)
|
|
|
|
609,418
|
|
Merchandise inventories
write-down
|
|
|
150,382
|
|
|
|
-
|
|
|
|
-
|
|
Amortization of
operating lease right-of-use assets
|
|
|
1,784,754
|
|
|
|
2,385,992
|
|
|
|
2,358,125
|
|
Deferred tax provision
(benefit)
|
|
|
4,849,771
|
|
|
|
(67,268)
|
|
|
|
(234,362)
|
|
Change in fair value of
representative's warrants liability
|
|
|
(139,615)
|
|
|
|
(369,404)
|
|
|
|
-
|
|
Investment loss
(income) from equity method investment
|
|
|
(14,554)
|
|
|
|
145,828
|
|
|
|
-
|
|
Accrued interest
expense
|
|
|
-
|
|
|
|
38,666
|
|
|
|
-
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
(53,824,026)
|
|
|
|
7,841,569
|
|
|
|
(13,547,385)
|
|
Accounts receivable –
related parties
|
|
|
(323,212)
|
|
|
|
-
|
|
|
|
-
|
|
Merchandise
inventories
|
|
|
21,285,866
|
|
|
|
(6,054,509)
|
|
|
|
(4,820,636)
|
|
Compensation receivable
for consumption tax
|
|
|
(23,212,327)
|
|
|
|
-
|
|
|
|
-
|
|
Prepaid expenses and
other current assets
|
|
|
5,597,781
|
|
|
|
(7,028,529)
|
|
|
|
(1,018,448)
|
|
Long term prepaid
expenses and other non-current assets
|
|
|
2,183,108
|
|
|
|
(4,762,929)
|
|
|
|
(693,210)
|
|
Accounts
payable
|
|
|
5,280,797
|
|
|
|
(2,803,950)
|
|
|
|
6,996,895
|
|
Accounts payable –
related parties
|
|
|
(119,081)
|
|
|
|
25,813
|
|
|
|
3,235,782
|
|
Deferred
revenue
|
|
|
49,715
|
|
|
|
(69,862)
|
|
|
|
(350,790)
|
|
Taxes
payable
|
|
|
17,268,372
|
|
|
|
(1,365,092)
|
|
|
|
602,387
|
|
Other payables and
other current liabilities
|
|
|
(1,590,907)
|
|
|
|
1,932,901
|
|
|
|
309,775
|
|
Operating lease
liabilities
|
|
|
(1,807,376)
|
|
|
|
(2,270,868)
|
|
|
|
(2,568,546)
|
|
Other non-current
liabilities
|
|
|
(419,200)
|
|
|
|
1,179,459
|
|
|
|
91,750
|
|
Net cash used in
operating activities
|
|
|
(25,738,414)
|
|
|
|
(7,005,764)
|
|
|
|
(3,237,063)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment made for a
long-term equity method investment
|
|
|
-
|
|
|
|
-
|
|
|
|
(348,118)
|
|
Purchase of property
and equipment
|
|
|
(934,960)
|
|
|
|
(3,037,813)
|
|
|
|
(2,939,471)
|
|
Proceeds from disposal
of property and equipment
|
|
|
2,961
|
|
|
|
61,109
|
|
|
|
436,081
|
|
Collection of amount
due from (advances made to) related parties
|
|
|
188,728
|
|
|
|
(128,535)
|
|
|
|
857,582
|
|
Net cash used in
investing activities
|
|
|
(743,271)
|
|
|
|
(3,105,239)
|
|
|
|
(1,993,926)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital
contribution
|
|
|
23
|
|
|
|
1,822,416
|
|
|
|
1,446,612
|
|
Proceeds from initial
public offerings, net of issuance costs
|
|
|
-
|
|
|
|
22,102,984
|
|
|
|
-
|
|
Cash consideration paid
for business combination under common control
|
|
|
(2,842,173)
|
|
|
|
-
|
|
|
|
-
|
|
Proceeds from
short-term borrowings
|
|
|
78,831,300
|
|
|
|
282,176,915
|
|
|
|
424,758,382
|
|
Repayments of
short-term borrowings
|
|
|
(55,515,000)
|
|
|
|
(303,096,477)
|
|
|
|
(415,796,955)
|
|
Proceeds from long-term
borrowings
|
|
|
2,160,161
|
|
|
|
17,057,036
|
|
|
|
3,643,270
|
|
Repayments of long-term
borrowings
|
|
|
(9,798,554)
|
|
|
|
(1,608,276)
|
|
|
|
(1,511,354)
|
|
Advances received from
(payments made to) related parties
|
|
|
104,482
|
|
|
|
(4,282,303)
|
|
|
|
1,727,161
|
|
Repayment of
obligations under finance leases
|
|
|
(194,421)
|
|
|
|
(408,492)
|
|
|
|
(332,643)
|
|
Net cash provided by
financing activities
|
|
|
12,745,818
|
|
|
|
13,763,803
|
|
|
|
13,934,473
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate fluctuation on cash
|
|
|
(2,763,692)
|
|
|
|
(2,230,388)
|
|
|
|
(549,504)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase
(decrease) in cash
|
|
|
(16,499,559)
|
|
|
|
1,422,412
|
|
|
|
8,153,980
|
|
Cash at beginning of
year
|
|
|
18,266,000
|
|
|
|
16,843,588
|
|
|
|
8,689,608
|
|
Cash at end of
year
|
|
$
|
1,766,441
|
|
|
$
|
18,266,000
|
|
|
$
|
16,843,588
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash
flow information
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for income
taxes
|
|
$
|
433,899
|
|
|
$
|
3,718,637
|
|
|
$
|
2,928,603
|
|
Cash paid for
interest
|
|
$
|
1,108,863
|
|
|
$
|
873,147
|
|
|
$
|
853,354
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
non-cash operating activities
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property
and financed under long-term payment
|
|
$
|
831,746
|
|
|
$
|
22,719
|
|
|
$
|
143,888
|
|
Purchase of property
and equipment financed under finance leases
|
|
$
|
210,666
|
|
|
$
|
901,561
|
|
|
$
|
-
|
|
Right of use assets
obtained in exchange for operating lease liabilities
|
|
$
|
542,231
|
|
|
$
|
2,856,470
|
|
|
$
|
351,930
|
|
Capital contribution in
the form of debt exemption
|
|
$
|
-
|
|
|
$
|
1,111,608
|
|
|
$
|
501,053
|
|
Deduction of right of
use assets and operating lease liabilities in
relation to lease concession
|
|
$
|
-
|
|
|
$
|
84,368
|
|
|
$
|
-
|
|
Reduction of
right-of-use assets and operating lease obligations due
to early termination of lease agreement
|
|
$
|
-
|
|
|
$
|
27,262
|
|
|
$
|
-
|
|
Deferred IPO cost
offset with capital reserve
|
|
$
|
-
|
|
|
$
|
685,473
|
|
|
$
|
-
|
|
(1)
|
The financial
information presented in this report has been retrospectively
adjusted for the acquisition of Tokyo
Lifestyle Limited.
|
View original
content:https://www.prnewswire.com/news-releases/yoshitsu-co-ltd-reports-fiscal-year-2023-financial-results-301889671.html
SOURCE Yoshitsu Co., Ltd