iFresh, Inc. (“iFresh” or “the Company”) (NASDAQ:IFMK), a
leading Asian American grocery supermarket chain and online grocer,
today announced its financial results for the year ended March 31,
2018.
Fiscal Year 2018 Financial Highlights
- iFresh’s net sales were $136.7 million for the year ended March
31, 2018, an increase of $5.8 million, or 4.4%, from $ 130.9
million for the year ended March 31, 2017.
- Gross profit for the year ended March 31,
2018 increased by 4%, to $29 million, compared
to $28 million in the prior year period.
Fiscal Year 2018 and Recent Operational
Highlights
- On July 13, 2017, the Company acquired assets from Mia
Supermarket in Orlando FL, a 20,370 square-foot grocery store
located at 2415 E. Colonial Drive. iFresh acquired the supermarket
for $1,050,000 in cash. The purchase included equipment and
inventory. The Company did not assume any liabilities. The
supermarket started operating in August 2017.
- On July 13, 2017, the Company acquired all the shares of iFresh
Glen Cove Inc. (“Glen Cove”) from Long Deng, the Company’s Chairman
and Chief Executive Officer, for 50,000 shares of the Company’s
common stock. Glen Cove is setting up a 22,859 square-foot brand
new grocery store in Garden City, New York located at 192 Glen Cove
Road. The Company expects the Glen Cove supermarket to open
in the last quarter of 2018.
- On October 2, 2017, the Company acquired all the shares of New
York Mart CT, Inc. (“NYM CT”) from Long Deng, the Company’s
Chairman and Chief Executive Officer, for $3,500,000. NYM CT owns a
supermarket in Connecticut that is currently under renovation. The
Company expects the Connecticut store to open in the last quarter
of 2018.
- On October 2, 2017, the Company acquired all of the shares of
New York Mart N. Miami Inc. (“NYM N. Miami”) from Long Deng, the
Company’s Chairman and Chief Executive Officer, and Yang Yu Gao for
$3,500,000 and 45,000 shares of the Company’s common stock. The
Miami supermarket is currently under construction. The Company
expects it to open in the last quarter of 2018.
- iFresh’s online grocery initiative had 19,741 transactions and
accumulated sales of approximately $1,585,120.71 from the
commencement of the online store NYMart in January 2016 to March
31, 2018.
Mr. Long Deng, Chairman of the board of directors and CEO
of iFresh, commented, “In fiscal year 2018, we achieved accelerated
growth for both net sales and gross profit. Our vertically
integrated structure enables us to supply 31% of the items sold in
our retail supermarkets with ten self-owned brands. Also, live
seafood and other perishables constituted 64.5% of total retail
sales this year.” Mr. Deng added, “Three stores are currently under
construction and expected to open in the fourth quarter of 2018. We
will keep innovating and providing our customers with the freshest
and the most authentic home-style gourmet food as well as
vegetables and fruits delivered fresh every day.”
Full Year 2018 Financial Results
Net Sales
For the year ended March 31, 2018, net sales were $136.7
million, an increase of $5.8 million, or 4.4%, from $130.9 million
for the year ended March 31, 2017.
Net retail sales to third parties increased by $2.5 million, or
2.3%, from $106.8 million for the year ended March 31, 2017, to
$109.3 million for the year ended March 31, 2018. The increase
resulted mainly from new stores opened in 2017, which contributed
$3.0 million of retail sales, offset by a decrease of sales in our
stores in Florida due to Hurricane Irma;
Net wholesale sales increased by $3.3 million from $24.1 million
for the year ended March 31, 2017 to $27.4 million for the year
ended March 31, 2018, which was attributable to an increase of $0.2
million in sales to related parties due to iFresh focusing on
improving its central procurement system through its wholesale
facilities and an increase of $3.1 million from its wholesale
revenue to third parties due to expansion of the wholesales
business.
Gross Profit
For the retail segment, gross profit was $21.8 and $22.5 million
for the years ended March 31, 2018 and 2017, respectively. Gross
margin was 20.0% and 21.1% for the years ended March 31, 2018 and
2017, respectively. Gross profit decreased due to the increase in
occupancy cost, as well as the increased cost of sales discussed
above.
For the wholesale segment, gross profit increased by $1.8
million, or 33.5%, from $5.4 million in 2017 to $7.2 million in
2018. Gross margin increased by 4.0%, from 22.4% to 26.4%. The
increase was due to the relative proportion of related party sales
to the total wholesale revenue, compared to 2017. Related party
wholesale had relative lower gross profit.
Selling, General and Administrative
Expenses
Selling, general, and administrative expenses was $30.7 million
for the year ended March 31, 2018, compared to $26.1 million for
the year ended March 31, 2017, which was mainly attributable to an
increase of $1.3 million in payroll and related insurance and
taxes, and an increase of $1.9 million of selling, general, and
administrative expenses from the acquired entities in this year,
compared to 0.3 million in 2017, an increase of $0.5 million of
rental and utility expenses, an increase of $0.2 million of
depreciation expense due to the increase of property and equipment,
and an increase of $0.5 million of bad debt expense. The remaining
$0.5 million increase was from other general expense which was due
to the expansion of our wholesales business.
Net Income (loss)
Net loss was $0.8 million for the year ended March 31, 2018, a
decrease of $2.0 million, or 166%, from $1.2 million of net income
for the year ended March 31, 2017, mainly attributable to the
increase of selling, general, and administrative expenses as
described above as well as damage to inventory from Hurricane
Irma.
Cash, Liquidity and Financial Position
As of March 31, 2018, the Company had cash and cash equivalents
of approximately $0.6 million, compared to $2.5 million as of March
31, 2017. The Company had negative working capital of $2.6 million
and $5.3 million as of March 31, 2018 and 2017, respectively.
For the fiscal year ended March 31, 2018, net cash used in
operating activities was approximately $ 2.6 million. Net cash used
in investing activities was $1.8 million. Net cash provided by
financing activities was $2.5 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
SUBSIDIARIESCONSOLIDATED BALANCE
SHEETS
|
|
March 31, 2018 |
|
|
March 31, 2017 |
|
ASSETS |
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
Cash and
cash equivalents |
|
$ |
640,915 |
|
|
$ |
2,550,819 |
|
Accounts
receivable, net |
|
|
4,903,340 |
|
|
|
2,272,011 |
|
Inventories, net |
|
|
10,905,484 |
|
|
|
9,796,984 |
|
Prepaid
expenses and other current assets |
|
|
1,925,893 |
|
|
|
1,404,631 |
|
Total current
assets |
|
|
18,375,632 |
|
|
|
16,024,445 |
|
Advances
to related parties |
|
|
10,019,688 |
|
|
|
12,044,154 |
|
Property
and equipment, net |
|
|
17,818,805 |
|
|
|
15,467,802 |
|
Intangible assets, net |
|
|
1,166,669 |
|
|
|
1,300,001 |
|
Security
deposits |
|
|
1,247,106 |
|
|
|
1,091,763 |
|
Deferred
income taxes |
|
|
313,832 |
|
|
|
86,799 |
|
Total
assets |
|
$ |
48,941,732 |
|
|
$ |
46,014,964 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities: |
|
|
|
|
|
|
|
|
Accounts
payable |
|
$ |
15,561,956 |
|
|
|
12,364,071 |
|
Deferred
revenue |
|
|
326,459 |
|
|
|
206,737 |
|
Borrowings against lines of credit, current, net |
|
|
1,303,753 |
|
|
|
1,144,568 |
|
Notes
payable, current |
|
|
135,203 |
|
|
|
262,578 |
|
Capital
lease obligations, current |
|
|
55,634 |
|
|
|
56,847 |
|
Accrued
expenses |
|
|
873,949 |
|
|
|
730,392 |
|
Taxes
payable |
|
|
1,606,504 |
|
|
|
1,769,398 |
|
Other
payables, current |
|
|
1,172,360 |
|
|
|
4,829,113 |
|
Total current
liabilities |
|
|
21,035,818 |
|
|
|
21,363,704 |
|
Borrowings against lines of credit & term loan-non-current,
net |
|
|
15,740,733 |
|
|
|
12,779,838 |
|
Notes
payable, non-current |
|
|
231,095 |
|
|
|
379,376 |
|
Capital
lease obligations, non-current |
|
|
70,724 |
|
|
|
77,694 |
|
Deferred
rent |
|
|
6,319,386 |
|
|
|
5,475,362 |
|
Other
payables, non-current |
|
|
78,500 |
|
|
|
34,801 |
|
Total
liabilities |
|
|
43,476,256 |
|
|
|
40,110,775 |
|
|
|
|
|
|
|
|
|
|
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 of March 31, 2018
and March 31, 2017, respectively |
|
|
1,422 |
|
|
|
1,410 |
|
Additional paid-in capital |
|
|
9,428,093 |
|
|
|
9,075,525 |
|
Accumulated deficit |
|
|
(3,964,039 |
) |
|
|
(3,172,746 |
) |
Total shareholders’
equity |
|
|
5,465,476 |
|
|
|
5,904,189 |
|
Total
liabilities and shareholders’ equity |
|
$ |
48,941,732 |
|
|
|
46,014,964 |
|
iFRESH INC AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF
INCOME
|
|
For the Year ended |
|
|
|
March 31 2018 |
|
|
March 31 2017 |
|
|
|
|
|
|
|
|
Net sales |
|
$ |
126,874,761 |
|
|
$ |
121,826,207 |
|
Net sales-related
parties |
|
|
9,813,766 |
|
|
|
9,050,553 |
|
Total net sales |
|
|
136,688,527 |
|
|
|
130,876,760 |
|
Cost of sales |
|
|
91,241,612 |
|
|
|
87,610,152 |
|
Cost of sales-related
parties |
|
|
8,877,854 |
|
|
|
8,162,545 |
|
Retail occupancy
costs |
|
|
7,575,478 |
|
|
|
7,219,860 |
|
Gross
profit |
|
|
28,993,583 |
|
|
|
27,884,203 |
|
|
|
|
|
|
|
|
|
|
Selling, general and
administrative expenses |
|
|
30,738,330 |
|
|
|
26,087,868 |
|
Income
(Loss) from operations |
|
|
(1,744,747 |
) |
|
|
1,796,335 |
|
Interest expense,
net |
|
|
(817,227 |
) |
|
|
(303,894 |
) |
Other income |
|
|
1,668,496 |
|
|
|
1,360,616 |
|
Income
(Loss) before income taxes |
|
|
(893,478 |
) |
|
|
2,853,057 |
|
Income tax provision
(benefit) |
|
|
(102,185 |
) |
|
|
1,656,334 |
|
Net
income (Loss) |
|
$ |
(791,293 |
) |
|
$ |
1,196,723 |
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
(0.06 |
) |
|
$ |
0.10 |
|
Diluted |
|
$ |
(0.06 |
) |
|
$ |
0.10 |
|
Weighted average shares
outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
14,141,840 |
|
|
|
12,282,325 |
|
Diluted |
|
|
14,141,840 |
|
|
|
12,282,325 |
|
iFRESH INC AND
SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH
FLOWS
|
|
For the Year Ended |
|
|
|
March 31 2018 |
|
|
March 31 2017 |
|
Cash flows from
operating activities |
|
|
|
|
|
|
Net income (loss) |
|
$ |
(791,293 |
) |
|
$ |
1,196,723 |
|
Adjustments to
reconcile net income (loss) to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Depreciation
expense |
|
|
1,729,852 |
|
|
|
1,562,043 |
|
Amortization
expense |
|
|
315,832 |
|
|
|
178,957 |
|
Share based
compensation |
|
|
297,536 |
|
|
|
- |
|
Deferred income
taxes |
|
|
(227,033 |
) |
|
|
(166,221 |
) |
Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts
receivable |
|
|
(2,631,329 |
) |
|
|
(457,478 |
) |
Inventories |
|
|
(1,108,500 |
) |
|
|
(1,596,427 |
) |
Prepaid
expenses and other current assets |
|
|
(521,262 |
) |
|
|
(931,019 |
) |
Security
deposits |
|
|
(155,344 |
) |
|
|
(166,285 |
) |
Accounts
payable |
|
|
3,197,888 |
|
|
|
1,746,949 |
|
Deferred
revenue |
|
|
119,722 |
|
|
|
61,240 |
|
Accrued
expenses |
|
|
143,557 |
|
|
|
(296,479 |
) |
Taxes
payable |
|
|
(162,894 |
) |
|
|
75,526 |
|
Deferred
rent |
|
|
844,024 |
|
|
|
545,208 |
|
Other
liabilities |
|
|
(3,613,056 |
) |
|
|
4,171,936 |
|
Net cash
provided by (used in) operating activities |
|
|
(2,562,300 |
) |
|
|
5,924,673 |
|
Cash flows from
investing activities |
|
|
|
|
|
|
|
|
Repayment from
(advances made to) related parties |
|
|
2,079,511 |
|
|
|
(7,155,484 |
) |
Acquisition of property
and equipment |
|
|
(3,879,602 |
) |
|
|
(6,745,407 |
) |
Cash proceeds from
acquisition of Ecompass |
|
|
- |
|
|
|
240 |
|
Net cash
used in investing activities |
|
|
(1,800,091 |
) |
|
|
(13,900,651 |
) |
Cash flows from
financing activities |
|
|
|
|
|
|
|
|
Borrowings against Term loan |
|
|
1,050,000 |
|
|
|
15,000,000 |
|
Borrowings against lines of credit |
|
|
3,200,000 |
|
|
|
200,000 |
|
Repayments on term loan |
|
|
(1,312,420 |
) |
|
|
(3,791,794 |
) |
Repayments on lines of credit borrowings |
|
|
- |
|
|
|
(208,719 |
) |
Repayments on notes payable |
|
|
(407,345 |
) |
|
|
(258,254 |
) |
Payments
on capital lease obligations |
|
|
(77,748 |
) |
|
|
(55,198 |
) |
Deferred
financing cost |
|
|
- |
|
|
|
(912,500 |
) |
Net cash
used in financing activities |
|
|
2,452,487 |
|
|
|
9,973,535 |
|
Net increase
(decrease) in cash and cash equivalents |
|
|
(1,909,904 |
) |
|
|
1,997,557 |
|
Cash and cash
equivalents at beginning of the year |
|
|
2,550,819 |
|
|
|
553,262 |
|
Cash and cash
equivalents at the end of the year |
|
$ |
640,915 |
|
|
$ |
2,550,819 |
|
Supplemental
disclosure of cash flow information |
|
|
|
|
|
|
|
|
Cash paid for
interest |
|
$ |
763,231 |
|
|
$ |
304,483 |
|
Cash paid for income
taxes |
|
$ |
- |
|
|
$ |
1,747,028 |
|
|
|
|
|
|
|
|
|
|
Supplemental
disclosure of non-cash investing and financing
activities |
|
|
|
|
|
|
|
|
Capital expenditures
funded by capital lease obligations and notes payable |
|
$ |
213,435 |
|
|
$ |
345,567 |
|
Contact: Dragon Gate Investment Partners LLC
Tel: +1(646)-801-2803 Email: ifmk@dgipl.com
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