Yoshitsu Co., Ltd (“Yoshitsu” or the “Company”) (Nasdaq:
TKLF), a retailer and wholesaler of Japanese beauty and health
products, as well as other products in Japan, today announced its
unaudited financial results for the first six months of fiscal year
2022 ended September 30, 2021.
Mr. Mei Kanayama, the Principal Executive
Officer of Yoshitsu, commented, “We are pleased to announce that we
delivered solid financial results for the first six months of
fiscal year 2022 with total revenue of $112.3 million, growing
34.8% year over year, along with our increased global market
coverage and customer base, despite unfavorable market conditions.
The COVID-19 pandemic has caused (i) delays in exporting and
transporting as a result of supply chain constraints and (ii) a
sluggish number of overseas tourists, and, as a result, our
business was negatively impacted and our physical store sales
suffered significantly. The expansion of our business scale and
global market share, however, has led to the expansion of our
customer base, through which we believe we have established a
foundation for our financial growth. In addition, we have timely
adjusted our development strategy to target overseas online
markets, which has successfully offset the impact of reduced
in-store shopping due to travel restrictions. I would like to thank
our team for their efforts to overcome challenges during the
COVID-19 pandemic and their tremendous contributions fostering the
steady growth in our business, which we believe will allow us to
execute strategic plans to propel our future growth.”
Mr. Youichiro Haga, Principal Accounting and
Financial Officer of Yoshitsu, stated, “Throughout the first six
months of fiscal year 2022, the COVID-19 pandemic caused a surge in
various costs and a shortage of staff. However, we tackled these
challenges and achieved record revenue with our dedicated effort.
Our profitability has also grown consistently, with gross profit
rising by 24.1% and net income growing by 40.5%, respectively,
mainly because our overseas e-commerce business maintained
excellent growth momentum. The financial results indicate a good
start for 2022, with our global market expansion, increased
profitability, and consistent strategic execution that translated
into stronger financial results.”
First Six Months of Fiscal Year 2022
Financial and Operational Highlights
| |
For the Six Months Ended September 30, |
| (USD
millions, except per share data) |
2021 |
|
2020 |
|
% Change |
|
Revenue |
|
112.3 |
|
|
|
83.3 |
|
|
|
34.8 |
% |
|
Directly-operated physical stores |
|
5.2 |
|
|
|
20.6 |
|
|
|
(74.5 |
)% |
|
Online stores |
|
62.4 |
|
|
|
29.4 |
|
|
|
111.6 |
% |
|
Franchise stores and wholesale customers |
|
44.7 |
|
|
|
33.3 |
|
|
|
34.2 |
% |
| Gross
Profit |
|
18.3 |
|
|
|
14.8 |
|
|
|
24.1 |
% |
| Gross
Margin |
|
16.3 |
% |
|
|
17.7 |
% |
|
|
(1.4 |
)pp* |
| Income from
Operations |
|
4.6 |
|
|
|
3.7 |
|
|
|
25.8 |
% |
| Net
Income |
|
2.4 |
|
|
|
1.7 |
|
|
|
40.5 |
% |
| Earnings Per
Share |
|
0.09 |
|
|
|
0.06 |
|
|
|
36.4 |
% |
| * |
Notes: pp represents percentage points |
| |
|
| ● |
Revenue was $112.3 million, an increase of 34.8%
from $83.3 million for the same period of last year. |
| |
|
| ● |
Gross profit was $18.3 million, an increase of 24.1% from
$14.8 million for the same period of last year. |
| |
|
| ● |
Gross margin was 16.3%, compared with 17.7% for the same period of
last year. |
| |
|
| ● |
Net income was $2.4 million, an increase of 40.5% from $1.7 million
for the same period of last year. |
| |
|
| ● |
Basic and diluted earnings per share were $0.09, compared with
$0.06 for the same period of last year. |
| |
|
| ● |
As of February 28, 2022, the Company’s distribution channels
consisted of (i) 10 directly-operated physical stores in Japan,
(ii) 24 online stores through the Company’s websites and various
e-commerce marketplaces in Japan and China, and (iii) 9 franchise
stores in the U.S., 4 franchise stores in Canada, 4 franchise
stores in Hong Kong, 1 franchise store in the U.K., and
approximately 148 wholesale customers in Japan and other countries,
including China, the U.S., and Canada. |
First Six Months of Fiscal Year 2022 Financial
Results
Revenue
Revenue increased by $28.9 million, or 34.8%, to
$112.3 million for the six months ended September 30, 2021 from
$83.3 million for the same period of last year. The increase in
revenue was primarily due to increased revenue from online stores,
franchise stores, and wholesale customers, which was partially
offset by a decrease in revenue from directly-operated physical
stores.
| |
|
For the Six Months Ended September 30, |
|
| |
|
2021 |
|
|
2020 |
|
| ($ millions) |
|
Revenue |
|
|
Cost of Revenue |
|
|
Gross Margin |
|
|
Revenue |
|
|
Cost of Revenue |
|
|
Gross Margin |
|
| Directly-operated physical
stores |
|
|
5.2 |
|
|
|
4.4 |
|
|
|
15.5 |
% |
|
|
20.6 |
|
|
|
17.2 |
|
|
|
16.2 |
% |
| Online stores |
|
|
62.4 |
|
|
|
52.0 |
|
|
|
16.6 |
% |
|
|
29.4 |
|
|
|
23.3 |
|
|
|
21.0 |
% |
| Franchise stores and wholesale
customers |
|
|
44.7 |
|
|
|
37.5 |
|
|
|
16.1 |
% |
|
|
33.3 |
|
|
|
28.0 |
|
|
|
15.8 |
% |
| Total |
|
|
112.3 |
|
|
|
93.9 |
|
|
|
16.3 |
% |
|
|
83.3 |
|
|
|
68.5 |
|
|
|
17.7 |
% |
Revenue from directly-operated physical stores
decreased by $15.4 million, or 74.5%, to $5.2 million for the six
months ended September 30, 2021, from $20.6 million for the same
period of last year. The decrease was mainly attributable to the
state of emergency declared by the Japanese government in April
2021 in response to the COVID-19 pandemic. Due to this state of
emergency, almost all of the Company’s physical stores were
temporarily closed during the period between late April 2021 and
the end of May 2021. After the Company’s physical stores resumed
their business in June 2021, most of the Company’s physical stores
remained closed on Saturdays or Sundays, and the opening hours were
reduced by two to four hours to eight to nine hours per weekday.
From July 2021 to the present, most of the Company’s physical
stores resumed their nearly normal business with working hours
reduced by one to two hours every day. Despite this, the Company’s
business was still negatively affected during the six months ended
September 30, 2021.
Revenue from online stores increased by $33.0
million, or 111.6%, to $62.4 million for the six months ended
September 30, 2021, from $29.4 million for the same period of last
year. The increase was mainly attributable to the growing
popularity of online shopping, given that the e-commerce industry
has been rapidly expanding in recent years. In order to seize the
opportunities, the Company expanded its online store network by
opening new stores on multiple popular and reputable third-party
e-commerce marketplaces in overseas regions, while improving the
efficiency of its supply chain and storage and inventory
management. In order to reduce the Company’s operating expenses and
credit risk, the Company outsourced the entire operations of some
of its online stores to third-party companies, and sold products to
these third-party companies instead of to individual customers.
During the six months ended September 30, 2021, revenue from
overseas online sales, which was mainly from the China market,
increased by $33.9 million. The increase in overseas sales was in
line with the fast-growing purchasing power of the Chinese
consumers and the increasing popularity of high-quality Japanese
products among Chinese consumers. The increase was partially offset
by the decreased revenue from Japanese domestic online sales of
$1.0 million, which was mainly due to the closing of three
unprofitable domestic online stores.
Revenue from franchise stores and wholesale
customers increased by $11.4 million, or 34.2%, to $44.7 million
for the six months ended September 30, 2021, from $33.3 million for
the same period of last year. The increase in revenue from
franchise stores and wholesale customers was mainly attributable to
the increased sales to overseas franchise stores and wholesale
customers amounting to $11,446,738, offset by a slight decrease in
sales of $65,439 to the Company’s Japanese domestic wholesale
customers. With the improvement of the Company’s supply chain and
storage and logistic capacity, it added two new franchise stores
and increased its sales to overseas wholesale customers on a per
customer basis during the six months ended September 30, 2021.
Meanwhile, the Company’s Japanese domestic wholesales decreased
slightly during the six months ended September 30, 2021, due to the
impact of the COVID-19 pandemic.
Gross Profit and Gross Margin
Total cost of revenue increased by $25.4
million, or 37.1%, to $93.9 million for the six months ended
September 30, 2021, from $68.5 million for the same period of last
year.
Gross profit increased by $3.6 million, or
24.1%, to $18.3 million for six months ended September 30, 2021,
from $14.8 million for the same period of last year. Overall gross
margin decreased by 1.4 percentage points to 16.3% for the six
months ended September 30, 2021, from 17.7% for the same period of
last year.
Gross margin for directly-operated physical
stores, online stores, and franchise stores and wholesale customers
was 15.5%, 16.6%, and 16.1%, respectively, for the six months ended
September 30, 2021, compared to 16.2%, 21.0%, and 15.8%,
respectively, for the same period of last year.
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 increased by $2.6 million, or
23.5%, to $13.7 million for the six months ended September 30,
2021, from $11.1 million for the same period of last year. The
increase was primarily due to an increase in shipping expenses,
transaction commissions paid to third-party e-commerce marketplace
operators, consulting and professional service fees, promotion and
advertising expenses, payroll, and employee benefit expenses and
bonus expenses.
Interest Expense, net
Interest expense, net include interest expense
calculated at interest rate per loan agreements and loan service
costs, which are directly incremental to the loan agreements and
amortized over the loan periods. Interest expense, net increased by
$0.2 million, or 27.8%, to $1.0 million for the six months ended
September 30, 2021, from $0.8 million for the same period of last
year.
Other Income, net
Other income, net primarily includes tax
refunds, foreign exchange gain or loss, disposal gain or loss from
property and equipment, government subsidies, and other immaterial
income and expense items. Other income, net increased by $455,987,
or 23,761.7%, to $457,906 for the six months ended September 30,
2021, from $1,919 for the same period of last year. The increase
was mainly due to an increase of $226,853 received in the form of
government subsidies as the financial support during the COVID-19
pandemic, and a decrease in foreign exchange transaction loss by
$91,762 as a result of foreign exchange rate fluctuations, as well
as an increase of $79,257 in royalty fees collected from the
Company’s franchisees during the six months ended September 30,
2021.
Provision for Income Taxes
Provision for income taxes increased by $0.5
million, to $1.6 million for the six months ended September 30,
2021, from $1.1 million for the same period of last year. The
increase in provision for income taxes was mainly due to the
increased taxable income for the six months ended September 30,
2021. The effective income tax rate remained stable with a slight
increase from 39.5% to 39.8%.
Net Income
Net income was $2.4 million, or $0.09 per basic
and diluted share for the six months ended September 30, 2021,
compared to $1.7 million, or $0.06 per basic and diluted share for
the same period of last year.
Financial Condition
As of September 30, 2021, the Company had cash
of $7.0 million, compared to $16.4 million as of March 31, 2021. As
of September 30, 2021, the Company had accounts receivable balances
due from third parties and related parties of $47.8 million and
$5.2 million, respectively, compared to $43.7 million and $3.5
million as of March 31, 2021. The balance as of September 30, 2021
had been fully collected as of March 21, 2022. The collected
balances of such receivable provide cash available for use in the
Company’s operations as working capital, if necessary. As of
September 30, 2021, the Company had merchandise inventories of
$35.3 million, which the Company believes can be sold quickly,
based on its analysis of the current trend in demand for its
products, compared to $27.1 million as of March 31, 2021.
Net cash used in operating activities was $19.7
million for the six months ended September 30, 2021, mainly derived
from net income of $2.4 million for the period, and net changes in
the Company’s operating assets and liabilities, which mainly
included an increase in accounts receivable from third parties and
related parties of $6.3 million, which was in line with the
increase in revenue. Net cash used in operating activities was
$11.9 million for the six months ended September 30, 2020, mainly
derived from net income of $1.7 million for the period, and net
changes in the Company’s operating assets and liabilities, which
mainly included a decrease in accounts receivable from third
parties and related parties of $4.6 million, due to the increased
collection of outstanding account receivable balances, and an
increase in merchandise inventories of $17.0 million.
Net cash used in investing activities was $1.6
million for the six months ended September 30, 2021, mainly due to
the purchases of property and equipment of $1.5 million. Net cash
provided by investing activities was $4.1 million for the six
months ended September 30, 2020, mainly due to the collection of a
long-term loan made to a related party of $3.7 million, as well as
proceeds from disposal of property and equipment of $0.4
million.
Net cash provided by financing activities was
$11.9 million for the six months ended September 30, 2021, which
primarily consisted of proceeds from short-term borrowings of
$265.5 million, proceeds from long-term borrowings of $7.8 million,
and capital contributions of $1.8 million, partially offset by
repayments of short-term borrowings of $262.9 million and
repayments of long-term borrowings of $0.5 million. Net cash
provided by financing activities was $6.1 million for the six
months ended September 30, 2020, which primarily consisted of
proceeds from short-term borrowings of $150.4 million and proceeds
from long-term borrowings of $0.5 million, partially offset by
repayments of short-term borrowings of $143.9 million and
repayments of long-term borrowings of $0.6 million.
Recent Development
Completion of the Initial Public Offering
(“IPO”)
On January 13, 2022, the Company closed its IPO
of 6,250,000 American Depositary Shares (“ADSs”) at a public
offering price of $4.00 per ADS, which included 250,000 ADSs issued
pursuant to the partial exercise of the underwriters’
over-allotment option. Each ADS represents one ordinary share of
the Company. The closing for the sale of the over-allotment shares
took place on February 21, 2022. Gross proceeds of the Company’s
IPO, including the proceeds from the sale of the over-allotment
shares, totaled $25.0 million, before deducting underwriting
discounts and other related expenses. Net proceeds of the Company’s
IPO, including over-allotment shares, was approximately $22.7
million. In connection with the IPO, the Company’s ordinary shares
began trading on the Nasdaq Capital Market under the symbol
“TKLF” on January 18, 2022.
Conference Call Information
The Company will host an earnings conference
call at 8:00 am U.S. Eastern Time (9:00 pm Japan Standard
Time) on March 29, 2022. Dial-in details for the conference call
are as follows:
| Date: |
March 29, 2022 |
|
Time: |
8:00 am U.S. Eastern Time |
|
International: |
1-412-902-4272 |
| United
States Toll Free: |
1-888-346-8982 |
| Japan
Toll Free: |
0066-33-812830 |
|
Conference ID |
Yoshitsu Co., Ltd |
Please dial in at least 15 minutes before the
commencement of the call to ensure timely participation.
For those unable to participate, an audio replay
of the conference call will be available from approximately one
hour after the end of the live call until April 5, 2022. The
dial-in for the replay is +1-877-344-7529 within the United
States or +1-412-317-0088 internationally. The replay access
code is No. 9286519.
A live and archived webcast of the conference
call will also be available at the Company’s investor relations
website at https://www.ystbek.co.jp/irystbek/.
About Yoshitsu Co., Ltd
Headquartered in Tokyo, Japan, Yoshitsu Co., Ltd
is a retailer and wholesaler of Japanese beauty and health
products, as well as other products. The Company offers various
beauty products (including cosmetics, skin care, fragrance, and
body care products), health products (including over-the-counter
drugs, nutritional supplements, and medical supplies and devices),
and other products (including home goods, 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/irystbek/.
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. 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 SEC.
For more information, please
contact:
Yoshitsu Co., Ltd Investor
Relations DepartmentEmail: ir@ystbek.co.jp
Ascent Investors Relations
LLCTina XiaoPresidentPhone: +1-917-609-0333Email:
tina.xiao@ascent-ir.com
YOSHITSU CO.,
LTDUNAUDITED CONDENSED CONSOLIDATED BALANCE
SHEETS
| |
|
September 30, |
|
|
March 31, |
|
| |
|
2021 |
|
|
2021 |
|
| |
|
(Unaudited) |
|
|
|
|
| ASSETS |
|
|
|
|
|
|
| CURRENT
ASSETS: |
|
|
|
|
|
|
| Cash |
|
$ |
6,974,352 |
|
|
$ |
16,380,363 |
|
| Accounts receivable, net |
|
|
47,816,444 |
|
|
|
43,683,575 |
|
| Accounts receivable - related
parties, net |
|
|
5,174,870 |
|
|
|
3,499,070 |
|
| Merchandise inventories,
net |
|
|
35,271,643 |
|
|
|
27,122,504 |
|
| Due from related parties |
|
|
754,889 |
|
|
|
632,380 |
|
| Prepaid expenses and other
current assets, net |
|
|
5,617,715 |
|
|
|
3,926,590 |
|
| TOTAL CURRENT
ASSETS |
|
|
101,609,913 |
|
|
|
95,244,482 |
|
| |
|
|
|
|
|
|
|
|
| Property and equipment,
net |
|
|
12,069,589 |
|
|
|
10,553,724 |
|
| Operating lease right-of-use
assets |
|
|
2,867,451 |
|
|
|
2,898,551 |
|
| Long term investment |
|
|
330,332 |
|
|
|
333,357 |
|
| Long-term prepaid expenses and
other non-current assets, net |
|
|
3,472,175 |
|
|
|
3,464,617 |
|
| Deferred tax assets, net |
|
|
431,389 |
|
|
|
447,124 |
|
|
TOTAL ASSETS |
|
$ |
120,780,849 |
|
|
$ |
112,941,855 |
|
| |
|
|
|
|
|
|
|
|
| CURRENT
LIABILITIES: |
|
|
|
|
|
|
|
|
| Short-term borrowings |
|
$ |
66,278,370 |
|
|
$ |
65,084,803 |
|
| Current portion of long-term
borrowings |
|
|
1,273,583 |
|
|
|
645,570 |
|
| Accounts payable |
|
|
5,201,498 |
|
|
|
11,625,477 |
|
| Accounts payable - related
parties |
|
|
11,849 |
|
|
|
63,011 |
|
| Due to related parties |
|
|
695,309 |
|
|
|
235,774 |
|
| Deferred revenue |
|
|
165,474 |
|
|
|
186,046 |
|
| Income tax payable |
|
|
1,678,708 |
|
|
|
2,180,764 |
|
| Operating lease liabilities,
current |
|
|
814,599 |
|
|
|
811,299 |
|
| Finance lease liabilities,
current |
|
|
233,634 |
|
|
|
174,904 |
|
| Other payables and other
current liabilities |
|
|
2,349,972 |
|
|
|
627,179 |
|
| TOTAL CURRENT
LIABILITIES |
|
|
78,702,996 |
|
|
|
81,634,827 |
|
| |
|
|
|
|
|
|
|
|
| Operating lease liabilities,
non-current |
|
|
1,930,342 |
|
|
|
1,928,682 |
|
| Finance lease liabilities,
non-current |
|
|
585,184 |
|
|
|
414,428 |
|
| Long-term borrowings |
|
|
12,932,319 |
|
|
|
6,439,751 |
|
| Other non-current
liabilities |
|
|
429,729 |
|
|
|
289,730 |
|
| TOTAL
LIABILITIES |
|
$ |
94,580,570 |
|
|
$ |
90,707,418 |
|
| |
|
|
|
|
|
|
|
|
| COMMITMENTS AND
CONTINGENCIES |
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
| SHAREHOLDERS’
EQUITY |
|
|
|
|
|
|
|
|
|
Ordinary shares, 100,000,000 shares authorized; 30,000,054 shares
and 27,327,594 shares issued and outstanding as of September 30,
2021 and March 31, 2021, respectively* |
|
|
3,336,827 |
|
|
|
2,416,635 |
|
| Capital reserve |
|
|
902,224 |
|
|
|
- |
|
| Retained earnings |
|
|
22,640,447 |
|
|
|
20,221,300 |
|
| Accumulated other
comprehensive loss |
|
|
(679,219 |
) |
|
|
(403,498 |
) |
| TOTAL SHAREHOLDERS’
EQUITY |
|
|
26,200,279 |
|
|
|
22,234,437 |
|
| |
|
|
|
|
|
|
|
|
| TOTAL LIABILITIES AND
SHAREHOLDERS’ EQUITY |
|
$ |
120,780,849 |
|
|
$ |
112,941,855 |
|
YOSHITSU CO.,
LTDUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
INCOME AND COMPREHENSIVE INCOME
| |
|
For the Six Months Ended September 30, |
|
| |
|
2021 |
|
|
2020 |
|
| |
|
|
|
|
|
|
| REVENUE |
|
|
|
|
|
|
|
|
| Revenue - third
parties |
|
$ |
101,202,348 |
|
|
$ |
74,387,425 |
|
| Revenue - related parties |
|
|
11,054,444 |
|
|
|
8,919,507 |
|
|
Total revenue |
|
|
112,256,792 |
|
|
|
83,306,932 |
|
| |
|
|
|
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
|
|
|
|
|
| Merchandise costs |
|
|
93,936,835 |
|
|
|
68,539,495 |
|
| Selling, general and
administrative expenses |
|
|
13,718,920 |
|
|
|
11,110,459 |
|
|
Total operating expenses |
|
|
107,655,755 |
|
|
|
79,649,954 |
|
| |
|
|
|
|
|
|
|
|
| INCOME FROM
OPERATIONS |
|
|
4,601,037 |
|
|
|
3,656,978 |
|
| |
|
|
|
|
|
|
|
|
| OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
|
| Interest expense, net |
|
|
(1,039,508 |
) |
|
|
(813,389 |
) |
| Other income, net |
|
|
457,906 |
|
|
|
1,919 |
|
|
Total other expenses, net |
|
|
(581,602 |
) |
|
|
(811,470 |
) |
| |
|
|
|
|
|
|
|
|
| INCOME BEFORE INCOME
TAX PROVISION |
|
|
4,019,435 |
|
|
|
2,845,508 |
|
| |
|
|
|
|
|
|
|
|
| PROVISION FOR INCOME
TAXES |
|
|
1,600,288 |
|
|
|
1,123,881 |
|
| |
|
|
|
|
|
|
|
|
| NET
INCOME |
|
|
2,419,147 |
|
|
|
1,721,627 |
|
| |
|
|
|
|
|
|
|
|
| OTHER COMPREHENSIVE
INCOME (LOSS) |
|
|
|
|
|
|
|
|
| Foreign currency translation
gain (loss) |
|
|
(275,721 |
) |
|
|
403,724 |
|
| |
|
|
|
|
|
|
|
|
| TOTAL COMPREHENSIVE
INCOME |
|
$ |
2,143,426 |
|
|
$ |
2,125,351 |
|
| |
|
|
|
|
|
|
|
|
| Earnings per ordinary
share - basic and diluted |
|
$ |
0.09 |
|
|
$ |
0.06 |
|
| Weighted average
shares - basic and diluted* |
|
|
27,526,689 |
|
|
|
26,727,540 |
|
| |
* |
Retrospectively restated for effect of share issuances on October
22, 2020 and a 294-for-1 forward split on August 18, 2021. |
YOSHITSU CO.,
LTDUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
CASH FLOWS
| |
|
For the Six Months Ended September 30, |
|
| |
|
2021 |
|
|
2020 |
|
| Cash flows from
operating activities: |
|
|
|
|
|
|
| Net
Income |
|
$ |
2,419,147 |
|
|
$ |
1,721,627 |
|
| Adjustments to
reconcile net income to net cash used in operating
activities: |
|
|
|
|
|
|
|
|
| Depreciation and
amortization |
|
|
230,949 |
|
|
|
223,587 |
|
| Gain from disposal of property
and equipment |
|
|
(23,073 |
) |
|
|
(37,295 |
) |
| Reversal of doubtful
accounts |
|
|
- |
|
|
|
(49,833 |
) |
| Amortization of operating
lease right-of-use assets |
|
|
531,938 |
|
|
|
617,121 |
|
| Deferred tax provision |
|
|
11,883 |
|
|
|
2,841 |
|
| Changes in operating
assets and liabilities: |
|
|
|
|
|
|
|
|
| Accounts receivable |
|
|
(4,609,319 |
) |
|
|
10,859,565 |
|
| Accounts receivable - related
parties |
|
|
(1,737,698 |
) |
|
|
(6,296,767 |
) |
| Merchandise inventories |
|
|
(8,543,500 |
) |
|
|
(17,042,943 |
) |
| Prepaid expenses and other
current assets |
|
|
(2,594,691 |
) |
|
|
(3,361,028 |
) |
| Long term prepaid expenses and
other non-current assets |
|
|
(39,695 |
) |
|
|
(221,852 |
) |
| Accounts payable |
|
|
(6,429,975 |
) |
|
|
823,060 |
|
| Accounts payable - related
parties |
|
|
(51,483 |
) |
|
|
312,999 |
|
| Deferred revenue |
|
|
(19,218 |
) |
|
|
(191,517 |
) |
| Income tax payable |
|
|
(490,773 |
) |
|
|
(458,913 |
) |
| Other payables and other
current liabilities |
|
|
1,758,992 |
|
|
|
1,752,833 |
|
| Operating lease
liabilities |
|
|
(496,705 |
) |
|
|
(634,760 |
) |
| Other non-current
liabilities |
|
|
362,176 |
|
|
|
121,627 |
|
| Net cash used in
operating activities |
|
|
(19,721,045 |
) |
|
|
(11,859,648 |
) |
| |
|
|
|
|
|
|
|
|
| Cash flows from
investing activities: |
|
|
|
|
|
|
|
|
| Purchase of property and
equipment |
|
|
(1,518,492 |
) |
|
|
(46,517 |
) |
| Proceeds from disposal of
property and equipment |
|
|
33,707 |
|
|
|
433,180 |
|
| Collections of repayments from
(advances made to) related parties |
|
|
(130,512 |
) |
|
|
850 |
|
| Collection of long-term loan
due from a related party |
|
|
- |
|
|
|
3,744,000 |
|
| Net cash provided by
(used in) investing activities |
|
|
(1,615,297 |
) |
|
|
4,131,513 |
|
| |
|
|
|
|
|
|
|
|
| Cash flows from
financing activities: |
|
|
|
|
|
|
|
|
| Capital contribution |
|
|
1,822,416 |
|
|
|
- |
|
| Proceeds from short-term
borrowings |
|
|
265,509,656 |
|
|
|
150,387,119 |
|
| Repayments of short-term
borrowings |
|
|
(262,859,584 |
) |
|
|
(143,865,006 |
) |
| Proceeds from long-term
borrowings |
|
|
7,834,600 |
|
|
|
468,000 |
|
| Repayments of long-term
borrowings |
|
|
(522,896 |
) |
|
|
(649,894 |
) |
| Advances received from related
parties |
|
|
469,824 |
|
|
|
(38,712 |
) |
| Repayment of obligations under
finance leases |
|
|
(338,043 |
) |
|
|
(244,565 |
) |
| Net cash provided by
financing activities |
|
|
11,915,973 |
|
|
|
6,056,942 |
|
| |
|
|
|
|
|
|
|
|
| Effect of exchange
rate fluctuation on cash |
|
|
14,358 |
|
|
|
160,707 |
|
| |
|
|
|
|
|
|
|
|
| Net decrease in
cash |
|
|
(9,406,011 |
) |
|
|
(1,510,486 |
) |
| Cash at beginning of
period |
|
|
16,380,363 |
|
|
|
7,529,219 |
|
| Cash at end of
period |
|
$ |
6,974,352 |
|
|
$ |
6,018,733 |
|
| |
|
|
|
|
|
|
|
|
| Supplemental cash flow
information |
|
|
|
|
|
|
|
|
| Cash paid for income
taxes |
|
$ |
2,106,469 |
|
|
$ |
1,583,780 |
|
| Cash paid for
interest |
|
$ |
394,113 |
|
|
$ |
323,093 |
|
| |
|
|
|
|
|
|
|
|
| Supplemental non-cash
operating activity |
|
|
|
|
|
|
|
|
| Purchase of property and
equipment financed under long-term payment |
|
$ |
23,234 |
|
|
$ |
- |
|
| Purchase of property and
equipment financed under finance leases |
|
$ |
340,615 |
|
|
$ |
- |
|
| Right of use assets obtained
in exchange for operating lease liabilities |
|
$ |
527,062 |
|
|
$ |
- |
|
YOSHITSU CO.,
LTDUNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF
CHANGES IN SHAREHOLDERS’ EQUITY FOR THE SIX MONTHS
ENDED SEPTEMBER 30, 2021 AND 2020
|
|
|
Ordinary Shares |
|
|
Capital |
|
|
Retained |
|
|
Accumulated Other Comprehensive Income |
|
|
Total Shareholders’ |
|
|
|
|
Shares* |
|
|
Amount |
|
|
Reserve |
|
|
Earnings |
|
|
(Loss) |
|
|
Equity |
|
| Balance,
March 31, 2020 |
|
|
26,727,540 |
|
|
$ |
970,023 |
|
|
$ |
- |
|
|
$ |
14,698,699 |
|
|
$ |
294,942 |
|
|
$ |
15,963,664 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net income for the period |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
1,721,627 |
|
|
|
- |
|
|
|
1,721,627 |
|
| Foreign currency translation
gain |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
403,724 |
|
|
|
403,724 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, September 30,
2020 |
|
|
26,727,540 |
|
|
$ |
970,023 |
|
|
$ |
- |
|
|
$ |
16,420,326 |
|
|
$ |
698,666 |
|
|
$ |
18,089,015 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, March 31,
2021 |
|
|
27,327,594 |
|
|
$ |
2,416,635 |
|
|
$ |
- |
|
|
$ |
20,221,300 |
|
|
$ |
(403,498 |
) |
|
$ |
22,234,437 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital contribution |
|
|
2,672,460 |
|
|
|
920,192 |
|
|
|
902,224 |
|
|
|
- |
|
|
|
- |
|
|
|
1,822,416 |
|
| Net income for the period |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
2,419,147 |
|
|
|
- |
|
|
|
2,419,147 |
|
| Foreign currency translation
loss |
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
(275,721 |
) |
|
|
(275,721 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance, September 30,
2021 |
|
|
30,000,054 |
|
|
$ |
3,336,827 |
|
|
$ |
902,224 |
|
|
$ |
22,640,447 |
|
|
$ |
(679,219 |
) |
|
$ |
26,200,279 |
|
| |
* |
Retrospectively restated for effect of share issuances on October
22, 2020 and a 294-for-1 forward split on August 18, 2021. |
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