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, 2022.
Mr. Mei Kanayama, the Principal Executive
Officer of Yoshitsu, commented, “We are pleased that our full-year
results were in line with our expectations as we closed out a
successful year with a revenue increase of 3.1%, despite the
challenging environment. As expected, our businesses were
significantly affected by the travel restrictions and delays in
overseas exporting and importing related to the COVID-19 pandemic.
Although the global economy has been filled with uncertainties, we
are satisfied with the accomplishments achieved in our key
strategic initiatives, including the completion of our initial
public offering in January 2022 and the expansion of our market
coverage with new stores and wholesale customers. We continued to
invest in extending the online marketplace to seize the
opportunities of the increasing popularity of online shopping. As
we look to the next fiscal year, we remain focused on expanding our
global footprint, optimizing our international warehouse operations
in North America, diversifying our products, and growing our
customer base. We believe that we are capable of mitigating the
near-term turbulence and expect to continue to build strong
momentum with our flexible and resilient business model. We are
confident that our strategic initiatives will drive Yoshitsu to
achieve long-term growth and generate more value for our
shareholders.”
Mr. Youichiro Haga, Principal Accounting and
Financial Officer of Yoshitsu, stated, “While the uncertain market
conditions disrupted our business during fiscal year 2022, our
business fundamentals remained strong and the market demand for our
products continued to grow. During fiscal year 2022, we generated
record revenue of $228.4 million, demonstrating our efforts and
reflecting the successful execution of our strategic development
plan. We remain committed to delivering high-quality products,
improving customer experience, and expanding our market share.
Looking forward, we will continue to monitor the potential impact
of the COVID-19 pandemic on our business activities. In the
meantime, we will focus on leveraging the strengths of our market
position and improving operating efficiency. We expect to achieve
solid financial and operating results and continue to expand our
business to align with our strategic growth initiatives.”
Fiscal Year 2022 Financial and
Operational Highlights
| |
|
For the Fiscal Years Ended March 31, |
| ($ millions, except per share
data) |
|
2022 |
|
|
2021 |
|
|
% Change |
| Revenue |
|
228.4 |
|
|
221.5 |
|
|
3.1 |
% |
| Directly-operated physical
stores |
|
10.8 |
|
|
29.5 |
|
|
(63.3 |
)% |
| Online stores |
|
121.2 |
|
|
111.4 |
|
|
8.7 |
% |
| Franchise stores and wholesale
customers |
|
96.4 |
|
|
80.6 |
|
|
19.7 |
% |
| Gross Profit |
|
39.1 |
|
|
40.0 |
|
|
(2.3 |
)% |
| Gross Margin |
|
17.1 |
% |
|
18.0 |
% |
|
(0.9) |
pp* |
| Income from Operations |
|
6.4 |
|
|
10.7 |
|
|
(40.1 |
)% |
| Net Income |
|
3.3 |
|
|
5.5 |
|
|
(40.7 |
)% |
| Earnings per Share |
|
0.10 |
|
|
0.21 |
|
|
(52.4 |
)% |
* Notes: pp represents percentage points
- Revenue was $228.4 million, an
increase of 3.1% from $221.5 million for fiscal year
2021.
- Gross profit was $39.1
million, a slight decrease of 2.3% from $40.0 million for fiscal
year 2021.
- Gross margin was 17.1%, compared
with 18.0% for fiscal year 2021.
- Net income was $3.3 million, a
decrease of 40.7% from $5.5 million for fiscal year 2021.
- Basic and diluted earnings per
share were $0.10, compared with $0.21 for the same period of
last year.
- As of August 15, 2022, the
Company’s distribution channels consisted of (i) 11
directly-operated physical stores in Japan and five
directly-operated physical stores in Hong Kong, (ii) 25 online
stores through the Company’s websites and various e-commerce
marketplaces in Japan, China, and Korea, and (iii) eight franchise
stores in the U.S., four franchise stores in Canada, one franchise
store in the U.K., and approximately 151 wholesale customers in
Japan and other countries, including China, the U.S., and
Canada.
Fiscal Year 2022 Financial
Results
Revenue
Revenue increased by $6.9 million, or 3.1%, to
$228.4 million for fiscal year 2022, from $221.5 million for fiscal
year 2021. The increase in revenue was primarily due to increased
revenue from online stores, franchise stores, and wholesale
customers, which was partially offset by a decrease in revenue from
directly-operated physical stores.
| |
|
For the Fiscal Years
Ended March
31, |
| |
|
2022 |
|
|
2021 |
|
| ($ millions) |
|
Revenue |
|
Cost ofRevenue |
|
GrossMargin |
|
Revenue |
|
Cost ofRevenue |
|
GrossMargin |
| Directly-operated physical
stores |
|
10.8 |
|
9.6 |
|
11.4 |
% |
|
29.5 |
|
24.6 |
|
16.6 |
% |
| Online stores |
|
121.2 |
|
98.3 |
|
18.8 |
% |
|
111.4 |
|
88.9 |
|
20.2 |
% |
| Franchise stores and wholesale
customers |
|
96.4 |
|
81.5 |
|
15.5 |
% |
|
80.6 |
|
68.1 |
|
15.5 |
% |
| Total |
|
228.4 |
|
189.4 |
|
17.1 |
% |
|
221.5 |
|
181.6 |
|
18.0 |
% |
Revenue from directly-operated physical stores
decreased by $18.7 million, or 63.3%, to $10.8 million for fiscal
year 2022, from $29.5 million for fiscal year 2021. 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 three hours every
day. However, due to the restriction imposed by the local
government and a lack of international tourists, the Company’s
business was still negatively affected. Hence, revenue from
directly-operated physical stores decreased significantly during
the fiscal year ended March 31, 2022.
Revenue from online stores increased by $9.7
million, or 8.7%, to $121.2 million for fiscal year 2022, from
$111.4 million for fiscal year 2021. 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. Revenue from overseas online sales
increased during the first three quarters of the fiscal year ended
March 31, 2022; however, it deceased during the last quarter of the
fiscal year ended March 31, 2022, due to the resurgence of COVID-19
in China. During the last quarter of the fiscal year 2022,
shipments and customer clearance for overseas exports and imports
were delayed due to a shipping container shortage and the stricter
border control protocols, and the Company’s online sales in China
were significantly constrained due to the inability to deliver the
products to its customers as a consequence of mobility restrictions
and lockdowns imposed in many provinces across China. Therefore,
revenue from overseas online sales increased by $11.7 million
during the fiscal year ended March 31, 2022, as compared to the
same period last year. The increase was partially offset by the
decreased revenue from Japanese domestic online sales of $2.0
million, which was mainly due to the closing of three unprofitable
domestic online stores. Hence, revenue from online stores only
increased by 8.7% during the fiscal year ended March 31, 2022, as
compared to last year.
Revenue from franchise stores and wholesale
customers increased by $15.9 million, or 19.7%, to $96.4 million
for fiscal year 2022, from $80.6 million for fiscal year 2021. With
the improvement of the Company’s supply chain and storage and
logistic capacity, it added five new franchise stores and increased
its sales to overseas wholesale customers on a per customer basis
during the fiscal year ended March 31, 2022. Although the Company’s
overseas franchise stores and wholesale customers sales during the
last quarter of the fiscal year ended March 31, 2022 declined due
to the shipping container shortage caused by the COVID-19 pandemic
and soaring shipping charges, its sales to overseas franchise
stores and wholesale customers during the fiscal year ended March
31, 2022 increased by $16.2 million as compared to last year. The
increase was partially offset by a slight decrease of $0.3 million
in the Company’s Japanese domestic wholesale.
Gross Profit and Gross Margin
Total cost of revenue increased by $7.8 million,
or 4.3%, to $189.4 million for fiscal year 2022, from $181.6
million for fiscal year 2021.
Gross profit decreased slightly by $0.9 million,
or 2.3%, to $39.1 million for fiscal year 2022, from $40.0 million
for fiscal year 2021. Overall gross margin decreased slightly by
0.9 percentage points to 17.1% for fiscal year 2022, from 18.0% for
fiscal year 2021.
Gross margin for directly-operated physical
stores, online stores, and franchise stores and wholesale customers
was 11.4%, 18.8%, and 15.5%, respectively, for fiscal year 2022,
compared to 16.6%, 20.2%, and 15.5%, respectively, for fiscal year
2021.
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 $3.4 million, or
11.5%, to $32.7 million for fiscal year 2022, from $29.3 million
for fiscal year 2021. 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, payroll, employee benefit expenses, and bonus
expenses.
Interest Expenses, net
Interest expenses, net include interest expenses
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 expenses, net increased
by $0.7 million, or 37.8%, to $2.7 million for fiscal year 2022,
from $2.0 million for fiscal year 2021.
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 increased by $0.4 million, or 101.7%, to
$0.7 million for fiscal year 2022, from $0.4 million for fiscal
year 2021. The increase was mainly due to an increase in other
income, such as increased receipt of government subsidies as the
financial support during the COVID-19 pandemic, as well as an
increase in royalty fees collected from the Company’s franchisees
during the fiscal year ended March 31, 2022.
Provision for Income Taxes
Provision for income taxes decreased by $1.1
million, to $2.2 million for fiscal year 2022, from $3.3 million
for fiscal year 2021. The decrease in provision for income taxes
was mainly due to the decreased taxable income for the fiscal year
ended March 31, 2022.
Net Income
Net income was $3.3 million, or $0.10 per basic
and diluted share for fiscal year 2022, compared to $5.5 million,
or $0.21 per basic and diluted share for fiscal year 2021.
Financial Condition
As of March 31, 2022, the Company had cash of
$17.7 million, compared to $16.4 million as of March 31, 2021. As
of March 31, 2022, the Company had accounts receivable balances due
from third parties and related parties of $34.8 million and $6.3
million, respectively, compared to $43.7 million and $3.5 million
as of March 31, 2021. Approximately 52.1% of the balance as of
March 31, 2022 had been subsequently collected and the remaining
balance is expected to be fully collected by September 30, 2022.
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, 2022, the Company had merchandise
inventories of $30.2 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 $12.3
million for fiscal year 2022, mainly derived from net income of
$3.3 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 operating activities was $3.4
million for fiscal year 2021, mainly derived from net income of
$5.5 million for the year, 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
$10.3 million in line with the increase in revenue.
Net cash used in investing activities was $2.9
million for fiscal year 2022, mainly due to the purchases of
property and equipment of $2.8 million. Net cash provided by
investing activities was $1.8 million for fiscal year 2021, mainly
due to the collection of a long-term loan made to a related party
of $3.8 million and repayments from related parties of $0.9
million, partially offset by purchases of property and equipment in
the aggregate amount of $2.9 million.
Net cash provided by financing activities was
$18.3 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 $16.6 million, partially offset by
repayments of short-term borrowings of $302.5 million. Net cash
provided by financing activities was $11.1 million for fiscal year
2021, which primarily consisted of proceeds from short-term
borrowings of $424.2 million, proceeds from long-term borrowings of
$2.8 million, and capital contributions of $1.4 million, partially
offset by repayments of short-term borrowings of $415.8 million and
repayments of long-term borrowings of $1.5 million.
Conference Call Information
The Company will host an earnings conference
call at 8:30 am U.S. Eastern Time (9:30 pm Japan Standard
Time) on August 15, 2022. Dial-in details for the conference call
are as follows:
| Date: |
August 15, 2022 |
|
Time: |
8:30 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 August 22, 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. 2599619.
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/irlibrary/.
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 sundry products and 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), 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. 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. 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.,
LTDCONSOLIDATED BALANCE SHEETS
| |
|
March 31, |
|
|
March 31, |
|
| |
|
2022 |
|
|
2021 |
|
| ASSETS |
|
|
|
|
|
|
| CURRENT
ASSETS: |
|
|
|
|
|
|
|
Cash |
|
$ |
17,671,370 |
|
|
$ |
16,380,363 |
|
|
Accounts receivable, net |
|
|
34,831,521 |
|
|
|
43,683,575 |
|
|
Accounts receivable - related parties, net |
|
|
6,305,927 |
|
|
|
3,499,070 |
|
|
Merchandise inventories, net |
|
|
30,240,130 |
|
|
|
27,122,504 |
|
|
Due from related parties |
|
|
692,995 |
|
|
|
632,380 |
|
|
Prepaid expenses and other current assets, net |
|
|
9,905,486 |
|
|
|
3,926,590 |
|
|
TOTAL CURRENT ASSETS |
|
|
99,647,429 |
|
|
|
95,244,482 |
|
|
|
|
|
|
|
|
|
|
|
|
Property and equipment, net |
|
|
12,734,182 |
|
|
|
10,553,724 |
|
|
Operating lease right-of-use assets |
|
|
2,909,432 |
|
|
|
2,898,551 |
|
|
Long term investment |
|
|
168,509 |
|
|
|
333,357 |
|
|
Long-term prepaid expenses and other non-current assets, net |
|
|
7,366,719 |
|
|
|
3,464,617 |
|
|
Deferred tax assets, net |
|
|
518,909 |
|
|
|
447,124 |
|
|
TOTAL ASSETS |
|
$ |
123,345,180 |
|
|
$ |
112,941,855 |
|
|
|
|
|
|
|
|
|
|
|
|
CURRENT LIABILITIES: |
|
|
|
|
|
|
|
|
|
Short-term borrowings |
|
$ |
40,328,982 |
|
|
$ |
65,084,803 |
|
|
Current portion of long-term borrowings |
|
|
951,045 |
|
|
|
645,570 |
|
|
Accounts payable |
|
|
7,839,741 |
|
|
|
11,625,477 |
|
|
Accounts payable - related parties |
|
|
132,047 |
|
|
|
63,011 |
|
|
Due to related parties |
|
|
53,365 |
|
|
|
235,774 |
|
|
Deferred revenue |
|
|
104,663 |
|
|
|
186,046 |
|
|
Income tax payable |
|
|
723,550 |
|
|
|
2,180,764 |
|
|
Operating lease liabilities, current |
|
|
1,005,460 |
|
|
|
811,299 |
|
|
Finance lease liabilities, current |
|
|
320,555 |
|
|
|
174,904 |
|
|
Representative’s warrants liability |
|
|
181,740 |
|
|
|
- |
|
|
Other payables and other current liabilities |
|
|
2,808,146 |
|
|
|
627,179 |
|
|
TOTAL CURRENT LIABILITIES |
|
|
54,449,294 |
|
|
|
81,634,827 |
|
|
|
|
|
|
|
|
|
|
|
|
Operating lease liabilities, non-current |
|
|
1,877,324 |
|
|
|
1,928,682 |
|
|
Finance lease liabilities, non-current |
|
|
673,612 |
|
|
|
414,428 |
|
|
Long-term borrowings |
|
|
19,627,749 |
|
|
|
6,439,751 |
|
|
Other non-current liabilities |
|
|
2,104,472 |
|
|
|
289,730 |
|
|
TOTAL LIABILITIES |
|
$ |
78,732,451 |
|
|
$ |
90,707,418 |
|
|
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SHAREHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
|
Ordinary shares, 100,000,000 shares authorized; 36,250,054 shares
and 27,327,594 shares issued and outstanding as of March 31, 2022
and 2021, respectively* |
|
|
14,694,327 |
|
|
|
2,416,635 |
|
|
Capital reserve |
|
|
10,308,404 |
|
|
|
- |
|
|
Retained earnings |
|
|
23,493,869 |
|
|
|
20,221,300 |
|
|
Accumulated other comprehensive loss |
|
|
(3,883,871 |
) |
|
|
(403,498 |
) |
|
TOTAL SHAREHOLDERS’ EQUITY |
|
|
44,612,729 |
|
|
|
22,234,437 |
|
|
|
|
|
|
|
|
|
|
|
|
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
$ |
123,345,180 |
|
|
$ |
112,941,855 |
|
| |
* |
Retrospectively restated for effect of a 294-for-1 forward split on
August 18, 2021. |
YOSHITSU CO.,
LTDCONSOLIDATED STATEMENTS OF INCOME AND
COMPREHENSIVE INCOME
(LOSS)
| |
|
For the Years Ended March 31, |
|
| |
|
2022 |
|
|
2021 |
|
|
2020 |
|
| REVENUE |
|
|
|
|
|
|
|
|
|
| Revenue - third parties |
|
$ |
206,307,380 |
|
|
$ |
198,739,410 |
|
|
$ |
135,231,401 |
|
| Revenue - related parties |
|
|
22,129,316 |
|
|
|
22,775,332 |
|
|
|
4,342,557 |
|
|
Total revenue |
|
|
228,436,696 |
|
|
|
221,514,742 |
|
|
|
139,573,958 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| OPERATING
EXPENSES |
|
|
|
|
|
|
|
|
|
|
|
|
| Merchandise costs |
|
|
189,382,124 |
|
|
|
181,559,939 |
|
|
|
112,088,049 |
|
| Selling, general and
administrative expenses |
|
|
32,674,100 |
|
|
|
29,297,682 |
|
|
|
18,076,688 |
|
|
Total operating expenses |
|
|
222,056,224 |
|
|
|
210,857,621 |
|
|
|
130,164,737 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| INCOME FROM
OPERATIONS |
|
|
6,380,472 |
|
|
|
10,657,121 |
|
|
|
9,409,221 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| OTHER INCOME
(EXPENSE) |
|
|
|
|
|
|
|
|
|
|
|
|
| Interest expenses, net |
|
|
(2,691,481 |
) |
|
|
(1,953,490 |
) |
|
|
(1,888,018 |
) |
| Other income, net |
|
|
735,359 |
|
|
|
364,656 |
|
|
|
292,103 |
|
| Gain (loss) from foreign
currency exchange |
|
|
804,311 |
|
|
|
(209,396 |
) |
|
|
(266,683 |
) |
| Change in fair value of
representative’s warrants liability |
|
|
369,404 |
|
|
|
- |
|
|
|
- |
|
| Loss from equity method
investment |
|
|
(145,828 |
) |
|
|
(29,242 |
) |
|
|
- |
|
|
Total other expenses, net |
|
|
(928,235 |
) |
|
|
(1,827,472 |
) |
|
|
(1,862,598 |
) |
| |
|
|
|
|
|
|
|
|
|
|
|
|
| INCOME BEFORE INCOME
TAX PROVISION |
|
|
5,452,237 |
|
|
|
8,829,649 |
|
|
|
7,546,623 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| PROVISION FOR INCOME
TAXES |
|
|
2,179,668 |
|
|
|
3,307,048 |
|
|
|
2,655,786 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| NET
INCOME |
|
|
3,272,569 |
|
|
|
5,522,601 |
|
|
|
4,890,837 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| OTHER COMPREHENSIVE
INCOME (LOSS) |
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency translation
gain (loss) |
|
|
(3,480,373 |
) |
|
|
(698,440 |
) |
|
|
300,727 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| TOTAL COMPREHENSIVE
INCOME (LOSS) |
|
$ |
(207,804 |
) |
|
$ |
4,824,161 |
|
|
|
5,191,564 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per ordinary
share - basic and diluted |
|
$ |
0.10 |
|
|
$ |
0.21 |
|
|
|
0.18 |
|
| Weighted average
shares - basic and diluted* |
|
|
32,678,625 |
|
|
|
26,887,006 |
|
|
|
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.,
LTDCONSOLIDATED STATEMENTS OF CASH
FLOWS
| |
|
For the Years Ended March 31, |
|
| |
|
2022 |
|
|
2021 |
|
|
2020 |
|
| Cash flows from
operating activities: |
|
|
|
|
|
|
|
|
|
|
Net Income |
|
$ |
3,272,569 |
|
|
$ |
5,522,601 |
|
|
$ |
4,890,837 |
|
|
Adjustments to reconcile net income to net cash used in
operating activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
1,035,569 |
|
|
|
441,893 |
|
|
|
403,159 |
|
|
Loss (gain) from disposal of property and equipment |
|
|
35,803 |
|
|
|
(35,516 |
) |
|
|
(178,814 |
) |
|
Loss (gain) from unrealized foreign currency translation |
|
|
(662,345 |
) |
|
|
127,208 |
|
|
|
(423,680 |
) |
|
Provision for (reversal of) doubtful accounts |
|
|
(278,642 |
) |
|
|
609,418 |
|
|
|
603,098 |
|
|
Amortization of operating lease right-of-use assets |
|
|
1,071,435 |
|
|
|
1,218,372 |
|
|
|
1,070,912 |
|
|
Deferred tax benefit |
|
|
(122,276 |
) |
|
|
(234,362 |
) |
|
|
(182,140 |
) |
|
Investment loss from equity method investment |
|
|
145,828 |
|
|
|
- |
|
|
|
- |
|
|
Change in fair value of representative’s warrants liability |
|
|
(369,404 |
) |
|
|
- |
|
|
|
- |
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
6,218,036 |
|
|
|
(7,720,713 |
) |
|
|
(9,422,992 |
) |
|
Accounts receivable - related parties |
|
|
(3,393,445 |
) |
|
|
(2,567,062 |
) |
|
|
(1,060,092 |
) |
|
Merchandise inventories |
|
|
(6,074,870 |
) |
|
|
(5,344,367 |
) |
|
|
(1,140,268 |
) |
|
Prepaid expenses and other current assets |
|
|
(6,933,131 |
) |
|
|
(1,116,517 |
) |
|
|
(2,949,689 |
) |
|
Long term prepaid expenses and other non-current assets |
|
|
(4,578,679 |
) |
|
|
(765,668 |
) |
|
|
(264,908 |
) |
|
Accounts payable |
|
|
(2,954,997 |
) |
|
|
7,818,308 |
|
|
|
1,068,687 |
|
|
Accounts payable - related parties |
|
|
81,177 |
|
|
|
26,783 |
|
|
|
- |
|
|
Deferred revenue |
|
|
(69,862 |
) |
|
|
(350,790 |
) |
|
|
362,812 |
|
|
Income tax payable |
|
|
(1,365,092 |
) |
|
|
602,387 |
|
|
|
303,680 |
|
|
Other payables and other current liabilities |
|
|
2,429,202 |
|
|
|
(304,243 |
) |
|
|
165,025 |
|
|
Operating lease liabilities |
|
|
(943,998 |
) |
|
|
(1,396,307 |
) |
|
|
(1,039,231 |
) |
|
Other non-current liabilities |
|
|
1,179,459 |
|
|
|
91,750 |
|
|
|
143,883 |
|
|
Net cash used in operating activities |
|
|
(12,277,663 |
) |
|
|
(3,376,825 |
) |
|
|
(7,649,721 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Payment made for a long-term equity method investment |
|
|
- |
|
|
|
(348,118 |
) |
|
|
- |
|
|
Purchase of property and equipment |
|
|
(2,815,184 |
) |
|
|
(2,939,471 |
) |
|
|
(3,414,703 |
) |
|
Proceeds from disposal of property and equipment |
|
|
61,109 |
|
|
|
436,081 |
|
|
|
1,281,736 |
|
|
Collections from (advances made to) related parties |
|
|
(128,535 |
) |
|
|
857,582 |
|
|
|
2,500,610 |
|
|
Payment for long-term loan due from a related party |
|
|
- |
|
|
|
3,773,600 |
|
|
|
(3,680,400 |
) |
|
Net cash provided by (used in) investing
activities |
|
|
(2,882,610 |
) |
|
|
1,779,674 |
|
|
|
(3,312,757 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Capital contribution prior to IPO |
|
|
1,822,416 |
|
|
|
1,446,612 |
|
|
|
- |
|
|
Proceeds from initial public offerings, net of issuance costs |
|
|
22,102,984 |
|
|
|
- |
|
|
|
- |
|
|
Proceeds from short-term borrowings |
|
|
282,176,915 |
|
|
|
424,201,158 |
|
|
|
260,918,369 |
|
|
Repayments of short-term borrowings |
|
|
(302,541,521 |
) |
|
|
(415,796,955 |
) |
|
|
(233,253,603 |
) |
|
Proceeds from long-term borrowings |
|
|
16,568,880 |
|
|
|
2,802,275 |
|
|
|
- |
|
|
Repayments of long-term borrowings |
|
|
(1,221,572 |
) |
|
|
(1,511,354 |
) |
|
|
(11,388,520 |
) |
|
Advances received from related parties |
|
|
(174,570 |
) |
|
|
246,213 |
|
|
|
15,020 |
|
|
Repayment of obligations under finance leases |
|
|
(408,492 |
) |
|
|
(332,643 |
) |
|
|
(140,386 |
) |
|
Net cash provided by financing activities |
|
|
18,325,040 |
|
|
|
11,055,306 |
|
|
|
16,150,880 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange rate fluctuation on cash |
|
|
(1,873,760 |
) |
|
|
(607,011 |
) |
|
|
85,150 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net increase in cash |
|
|
1,291,007 |
|
|
|
8,851,144 |
|
|
|
5,273,552 |
|
|
Cash at beginning of year |
|
|
16,380,363 |
|
|
|
7,529,219 |
|
|
|
2,255,667 |
|
|
Cash at end of year |
|
$ |
17,671,370 |
|
|
$ |
16,380,363 |
|
|
$ |
7,529,219 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental cash flow information |
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for income taxes |
|
$ |
3,718,637 |
|
|
$ |
2,928,603 |
|
|
$ |
2,589,710 |
|
|
Cash paid for interest |
|
$ |
779,291 |
|
|
$ |
665,797 |
|
|
$ |
1,074,757 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental non-cash operating activity |
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of property and equipment financed under long-term
payment |
|
$ |
22,719 |
|
|
$ |
143,888 |
|
|
$ |
- |
|
|
Purchase of property and equipment financed under finance
leases |
|
$ |
(901,561 |
) |
|
$ |
- |
|
|
$ |
527,992 |
|
|
Right of use assets obtained in exchange for operating lease
liabilities |
|
$ |
1,295,850 |
|
|
$ |
351,930 |
|
|
$ |
2,382,547 |
|
|
Deduction of right of use assets and operating lease liabilities in
relation to lease concession |
|
$ |
84,368 |
|
|
$ |
232,189 |
|
|
$ |
- |
|
|
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 |
|
|
$ |
- |
|
|
$ |
- |
|
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