iFresh, Inc. (“iFresh” or “the Company”) (NASDAQ:IFMK), a leading
Asian American grocery supermarket chain and online grocer, today
reported unaudited financial results for the third quarter ended
December 31, 2017.
Fiscal 2018 Third Quarter Highlights:
- Total net sales increased $0.9 million, or 3% to $35.9 million,
from $34.9 million in the prior year period.
- Gross profit for the third quarter ended December 31, 2017
increased by 2%, to $7.5 million, compared to $7.4 million in the
prior year period.
Mr. Long Deng, Chairman of the board of directors and CEO of
iFresh, commented, “We are pleased to see an increase in total net
sales in the quarter ended December 31, 2017. We reported a net
loss this quarter mainly due to the impact of Hurricane Irma and
the additional expenses related to four newly acquired stores,
three of which are in the process of being renovated and are not
yet generating revenue. In addition, due to the warehouse dispute
with the landlord of our Ming’s warehouse, sales have been limited
due to the lack of warehouse space.
The rent dispute with the landlord of Ming’s warehouse went to
trial and concluded on August 29, 2017 with a jury verdict in favor
of the Company. The verdict awarded Ming's damages of almost 2
million dollars, with another $2,250 each month. The verdict
is subject to appeal.
We remain committed to driving sales within existing stores and
actively pursuing expansion opportunities in strategic geographies.
In the quarter ended December 31, 2017, we acquired two new stores,
New York Mart CT, Inc. and New York Mart N. Miami Inc. The two
stores are expected to open in the first quarter of 2018 after
renovation. Once finished, NYM N. Miami will become one of the
largest Asian supermarkets in South Florida.
For the coming Chinese New Year, we are ready to capture
opportunities with iFresh’s unique products and integrated supply
chain. We look forward to updating you on our performance in the
near future,” concluded Mr. Deng.
Third Quarter 2018 Results
Net Sales
For the three months ended December 31, 2017, net sales were
$35.9 million, an increase of $0.9 million, or 3%, from $34.9
million for the three months ended December 31, 2016. This was
driven by a retail segment net sales increase of 1%, to $28.2
million, from $27.9 million in the third quarter of fiscal 2017,
and a wholesale segment net sales increase of $0.7 million, to $7.7
million, from $7.0 million for the three months ended December 31,
2016.
Gross Profit
Gross profit for the third quarter ended December 31, 2017
increased by 2%, to $7.5 million, compared to $7.4 million in the
prior year period. Gross margin was 21.0% and 21.2% for the quarter
ended December 31, 2017 and 2016, respectively.
Selling, General and Administrative
Expenses
SG&A expense was $7.8 million for the three months ended
December 31, 2017, compared to $6.5 million in the same period of
the last fiscal year, which was mainly attributable to increased
payroll expenses and the additional expenses related to four stores
acquired in July and October, 2017, three of which are in the
process of being renovated and are not yet generating revenue.
Net Income (loss)
Net loss was $0.3 million for the three months ended December
31, 2017, a decrease of $0.9 million, or 146%, from $0.6 million of
net income for the three months ended December 31, 2016, mainly
attributable to impact of Hurricane Irma, increased general and
administrative expenses and higher interest expenses.
Cash, Liquidity and Financial Position
As of December 31, 2017, the Company had cash and cash
equivalents of approximately $0.9 million, compared to $2.5 million
as of March 31, 2017. Working capital was $8.4 million as of
December 31, 2017, compared to $13.4 million as of March 31, 2017.
As of December 31, 2017, the Company had $1.2 million of bank loans
due within one year.
For the nine months ended December 31, 2017, net cash used in
operating activities was approximately $ 0.6 million. Net cash used
in investing activities was $3.8 million. Net cash provided by
financing activities was $2.8 million.
About iFresh, Inc.
iFresh Inc., headquartered in Long Island City, New York, is a
leading Asian American grocery supermarket chain and online grocer.
With nine retail supermarkets along the US eastern seaboard (with
additional stores in Glen Cove, Miami and Connecticut opening
soon), two in-house wholesale businesses strategically located in
cities with a highly concentrated Asian population, and six
iFresh-managed stores, iFresh aims to satisfy the increasing
demands of Asian Americans (whose purchasing power has been growing
rapidly) for fresh and culturally unique produce, seafood and other
groceries that are not found in mainstream supermarkets. With an
in-house proprietary delivery network, online sales channel and
strong relations with farms that produce Chinese specialty
vegetables and fruits, iFresh is able to offer fresh, high-quality
specialty produce at competitive prices to a growing base of
customers. For more information, please visit:
http://www.ifreshmarket.com/.
Forward-Looking Statements
This announcement contains forward-looking statements.
Forward-looking statements provide our current expectations or
forecasts of future events. Forward-looking statements include
statements about our expectations, beliefs, plans, objectives,
intentions, assumptions and other statements that are not
historical facts. Words or phrases such as “anticipate,” “believe,”
“continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,”
“plan,” “potential,” “predict,” “project,” “will” or similar words
or phrases, or the negatives of those words or phrases, may
identify forward-looking statements, but the absence of these words
does not necessarily mean that a statement is not forward-looking.
Examples of forward-looking statements in this announcement
include, but are not limited to, statements regarding our
disclosure concerning the Company’s operations, cash flows,
financial position and dividend policy.
|
|
|
iFRESH INC AND
SUBSIDIARIESCONDENSED CONSOLIDATED BALANCE
SHEETS(UNAUDITED) |
|
|
|
December 31,2017 |
|
|
March 31,2017 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
902,823 |
|
|
$ |
2,508,362 |
|
Accounts
receivable, net |
|
|
4,898,740 |
|
|
|
2,272,011 |
|
Inventories, net |
|
|
11,519,616 |
|
|
|
9,796,984 |
|
Prepaid
expenses and other current assets |
|
|
2,439,880 |
|
|
|
981,017 |
|
Advances
to related parties |
|
|
9,552,534 |
|
|
|
14,852,083 |
|
Total current
assets |
|
|
29,313,593 |
|
|
|
30,410,457 |
|
Property
and equipment, net |
|
|
16,874,362 |
|
|
|
9,290,674 |
|
Intangible assets, net |
|
|
1,200,002 |
|
|
|
1,300,001 |
|
Security
deposits |
|
|
1,232,506 |
|
|
|
912,346 |
|
Deferred
income taxes |
|
|
389,435 |
|
|
|
86,799 |
|
Total
assets |
|
$ |
49,009,898 |
|
|
$ |
42,000,277 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
16,470,850 |
|
|
|
12,364,071 |
|
Deferred
revenue |
|
|
139,029 |
|
|
|
206,737 |
|
Borrowings against lines of credit - current, net |
|
|
1,191,224 |
|
|
|
1,144,568 |
|
Notes
payable, current |
|
|
143,056 |
|
|
|
262,578 |
|
Capital
lease obligations - current |
|
|
60,498 |
|
|
|
51,376 |
|
Accrued
expenses |
|
|
875,943 |
|
|
|
730,392 |
|
Taxes
payable |
|
|
1,395,717 |
|
|
|
1,769,398 |
|
Other
payables - current |
|
|
605,098 |
|
|
|
501,213 |
|
Total current
liabilities |
|
|
20,881,415 |
|
|
|
17,030,333 |
|
Borrowings against lines of credit & term loan - non-current,
net |
|
|
16,126,222 |
|
|
|
12,779,838 |
|
Notes
payable - non-current |
|
|
269,228 |
|
|
|
379,376 |
|
Capital
lease obligations - non-current |
|
|
83,410 |
|
|
|
59,907 |
|
Deferred
rent |
|
|
6,286,568 |
|
|
|
5,424,134 |
|
Other
payables - non-current |
|
|
67,800 |
|
|
|
34,800 |
|
Total
liabilities |
|
|
43,714,643 |
|
|
|
35,708,388 |
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shareholders’
equity |
|
|
|
|
|
|
|
|
Preferred
shares, $.0001 par value, 1,000,000 shares authorized; none
issued. |
|
|
- |
|
|
|
- |
|
Common
stock, $0.0001 par value; 100,000,000 shares authorized,14,220,548
and 14,103,033 shares issued and outstanding as ofDecember 31, 2017
and March 31, 2017, respectively |
|
|
1,422 |
|
|
|
1,410 |
|
Additional paid-in capital |
|
|
8,602,729 |
|
|
|
9,075,025 |
|
Accumulated deficit |
|
|
(3,308,896 |
) |
|
|
(2,784,546 |
) |
Total shareholders’
equity |
|
|
5,295,255 |
|
|
|
6,291,889 |
|
Total
liabilities and shareholders’ equity |
|
$ |
49,009,898 |
|
|
|
42,000,277 |
|
|
|
|
|
|
|
|
|
|
|
|
iFRESH INC AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS(UNAUDITED) |
|
|
|
For the three months ended |
|
|
For the nine months ended |
|
|
|
December 31,2017 |
|
|
December 31,2016 |
|
|
December 31,2017 |
|
|
December 31,2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
|
$ |
33,702,943 |
|
|
$ |
32,327,248 |
|
|
$ |
94,595,598 |
|
|
$ |
90,874,879 |
|
Net sales-related
parties |
|
|
2,160,248 |
|
|
|
2,589,866 |
|
|
|
7,136,011 |
|
|
|
6,219,027 |
|
Total net sales |
|
|
35,863,191 |
|
|
|
34,917,114 |
|
|
|
101,731,609 |
|
|
|
97,093,906 |
|
Cost of sales |
|
|
24,696,520 |
|
|
|
23,805,176 |
|
|
|
69,164,715 |
|
|
|
66,960,139 |
|
Cost of sales-related
parties |
|
|
1,811,041 |
|
|
|
1,916,501 |
|
|
|
5,763,537 |
|
|
|
4,602,080 |
|
Occupancy costs |
|
|
1,834,247 |
|
|
|
1,791,325 |
|
|
|
5,670,852 |
|
|
|
5,396,778 |
|
Gross
profit |
|
|
7,521,383 |
|
|
|
7,404,112 |
|
|
|
21,132,505 |
|
|
|
20,134,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses
|
|
|
7,760,568 |
|
|
|
6,485,191 |
|
|
|
22,721,595 |
|
|
|
18,841,217 |
|
Income
(Loss) from operations |
|
|
(239,185 |
) |
|
|
918,921 |
|
|
|
(1,589,090 |
) |
|
|
1,293,692 |
|
Interest expense,
net |
|
|
(214,452 |
) |
|
|
(62,260 |
) |
|
|
(590,835 |
) |
|
|
(152,551 |
) |
Other income |
|
|
133,526 |
|
|
|
249,834 |
|
|
|
1,352,941 |
|
|
|
758,274 |
|
Income
(Loss) before income taxes |
|
|
(320,111 |
) |
|
|
1,106,495 |
|
|
|
(826,984 |
) |
|
|
1,899,415 |
|
Income tax provision
(benefit) |
|
|
(39,061 |
) |
|
|
497,929 |
|
|
|
(302,635 |
) |
|
|
854,743 |
|
Net
income (Loss) |
|
$ |
(281,050 |
) |
|
$ |
608,566 |
|
|
$ |
(524,349 |
) |
|
$ |
1,044,672 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.02 |
) |
|
$ |
0.05 |
|
|
$ |
(0.04 |
) |
|
$ |
0.09 |
|
Diluted |
|
$ |
(0.02 |
) |
|
$ |
0.05 |
|
|
$ |
(0.04 |
) |
|
$ |
0.09 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
14,219,132 |
|
|
|
12,000,000 |
|
|
|
14,167,599 |
|
|
|
12,000,000 |
|
Diluted |
|
|
14,219,132 |
|
|
|
12,000,000 |
|
|
|
14,167,599 |
|
|
|
12,000,000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
iFRESH INC AND
SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS(UNAUDITED) |
|
|
|
For the Nine months Ended |
|
|
|
December 31,2017 |
|
|
December 31,2016 |
|
Cash flows from
operating activities |
|
|
|
|
|
|
Net income (loss) |
|
$ |
(524,349 |
) |
|
$ |
1,044,672 |
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation
expense |
|
|
1,277,863 |
|
|
|
1,165,643 |
|
Amortization
expense |
|
|
236,874 |
|
|
|
99,999 |
|
Share based
compensation |
|
|
297,536 |
|
|
|
- |
|
Deferred income
taxes |
|
|
(302,636 |
) |
|
|
312,360 |
|
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(2,626,729 |
) |
|
|
(741,643 |
) |
Inventories |
|
|
(1,722,632 |
) |
|
|
(1,321,821 |
) |
Prepaid
expenses and other current assets |
|
|
(1,548,863 |
) |
|
|
(142,192 |
) |
Security
deposits |
|
|
(140,744 |
) |
|
|
159,240 |
|
Accounts
payable |
|
|
4,053,328 |
|
|
|
4,194,650 |
|
Deferred
revenue |
|
|
(67,708 |
) |
|
|
55,040 |
|
Accrued
expenses |
|
|
145,551 |
|
|
|
(28,263 |
) |
Taxes
payable |
|
|
(373,681 |
) |
|
|
(461,390 |
) |
Deferred
rent |
|
|
522,546 |
|
|
|
403,644 |
|
Other
liabilities |
|
|
136,883 |
|
|
|
635 |
|
Net cash
provided by (used in) operating activities |
|
|
(636,761 |
) |
|
|
4,740,574 |
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
|
Advances to related
parties |
|
|
(2,127,694 |
) |
|
|
(5,820,890 |
) |
Acquisition of property
and equipment |
|
|
(1,664,630 |
) |
|
|
(732,329 |
) |
Cash proceeds from
acquisitions |
|
|
13,836 |
|
|
|
- |
|
Net cash
used in investing activities |
|
|
(3,778,488 |
) |
|
|
(6,553,219 |
) |
Cash flows from
financing activities |
|
|
|
|
|
|
|
|
Borrowings against lines of credit |
|
|
3,200,000 |
|
|
|
200,000 |
|
Borrowings against term loan |
|
|
1,050,000 |
|
|
|
- |
|
Proceeds
from borrowings against term loan |
|
|
- |
|
|
|
15,000,000 |
|
Repayments on lines of credit borrowings |
|
|
(993,835 |
) |
|
|
(3,791,794 |
) |
Proceeds
from borrowings on notes payable |
|
|
- |
|
|
|
288,129 |
|
Repayments on notes payable |
|
|
(397,335 |
) |
|
|
(175,465 |
) |
Payments
on capital lease obligations |
|
|
(49,120 |
) |
|
|
(38,024 |
) |
Deferred
financing cost |
|
|
- |
|
|
|
(162,500 |
) |
Change in
restricted cash |
|
|
- |
|
|
|
(1,030,000 |
) |
Net cash
provided by financing activities |
|
|
2,809,710 |
|
|
|
10,290,346 |
|
Net increase
(decrease) in cash and cash equivalents |
|
|
(1,605,539 |
) |
|
|
8,477,701 |
|
Cash and cash
equivalents at beginning of the period |
|
|
2,508,362 |
|
|
|
551,782 |
|
Cash and cash
equivalents at the end of the period |
|
$ |
902,823 |
|
|
$ |
9,029,483 |
|
Supplemental
disclosure of cash flow information |
|
|
|
|
|
|
|
|
Cash paid for
interest |
|
$ |
541,134 |
|
|
$ |
150,314 |
|
Cash paid for income
taxes |
|
$ |
- |
|
|
$ |
1,316,133 |
|
Supplemental
disclosure of non-cash investing and financing
activities |
|
|
|
|
|
|
|
|
Capital expenditures
funded by capital lease obligations and notes payable |
|
$ |
249,411 |
|
|
$ |
288,129 |
|
Stock issued for Glen
Cove acquisition |
|
$ |
645,500 |
|
|
$ |
- |
|
Accrual of deferred
financing costs |
|
$ |
- |
|
|
$ |
750,000 |
|
|
|
|
|
|
|
|
|
|
Contact:Dragon Gate Investment Partners LLCTel:
+1(646)-801-2803Email: ifmk@dgipl.com
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