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iFresh, Inc. Reports Fiscal 2018 First Quarter Financial Results

NEW YORK, Aug. 15, 2017 (GLOBE NEWSWIRE) -- iFresh, Inc. (“iFresh” or “the Company”) (Nasdaq:IFMK), a leading Asian American grocery supermarket chain and online grocer in the United States, today reported unaudited financial results for the fiscal 2018 first quarter ended June 30, 2017.

Fiscal 2018 First Quarter Highlights:

  • Total net sales increase of 7.4% to $32.5 million, compared to $30.3 million in the first quarter of fiscal 2017
  • Retail segment net sales increase of 2.3% to $26.4 million, compared to $25.8 million in the first quarter of fiscal 2017
  • Total wholesale segment net sales increase of 36.7% to $6.2 million, compared to $4.5 million in the first quarter of fiscal 2017
  • Gross margin increase to 21.2% from 20.9% in the first quarter of fiscal 2017
  • Net loss of $0.3 million, or $0.02 per basic and diluted share, compared to net income of $0.2 million, or $0.01 per diluted shares, in the first quarter of fiscal 2017

Mr. Long Deng, Chairman of the board of directors and CEO of iFresh, commented, “We are pleased to report growth in total net sales, double-digit wholesale segment growth, and continued improvements in gross margin in the quarter ended June 30, 2017. We experienced a net loss in the quarter due to increased headcount, general expenses associated with the expansion of our business and a one-time $0.3 million share issuance expense, but we expect to return to profitability in the next quarter as we continue to centralize procurement and improve cost controls. Our online business enjoyed stable customer orders, and we continued to drive customer traffic to our stores through our quality offerings at competitive prices.

For the next quarter and the remainder of calendar year 2017, we remain committed to driving sales within existing stores and actively pursuing expansion opportunities in strategic geographies. Revenues from our recently announced Orlando store acquisition will be reflected in our financial statement for the quarter ended September 30, 2017. We also look forward to beginning a branding initiative to standardize the presentation of our storefronts and improve our brand image and recognition.

As we move into our customer holiday season, we believe we are well-positioned to capture the opportunities in our niche but growing market. We look forward to updating you on our progress in the weeks and months ahead,” concluded Mr. Deng.

First Quarter ended June 30, 2017

In the first quarter ended June 30, 2017, total net sales were $32.5 million, an increase of 7.4% as compared to $30.3 million in the previous year. This was driven by a retail segment net sales increase of 2.3%, to $26.4 million from $25.8 million compared to the first quarter of fiscal 2017, and a total wholesale segment net sales increase of 36.7%, to $6.2 million from $4.5 million compared to the first quarter of fiscal 2017.

Gross profit for the first quarter ended June 30, 2017 increased by 8.7%, to $6.9 million compared to $6.3 million in the prior year period. Gross margin was 21.2% and 20.9% for the quarter ended June 30, 2017 and 2016, respectively.

SG&A expense was $7.5 million in the first quarter ended June 30, 2017, compared to $6.2 million in the same period of the last fiscal year, driven mainly by an increase in headcount, general expenses due to the expansion of the business and a one-time $0.3 million share issuance expense.

Loss from operations was $0.6 million compared to net income from operations of $0.1 million in the quarter ended June 30, 2016. This was attributed to the increase in SG&A expense.

Net loss was $0.3 million, or $0.02 per basic and diluted share, compared to net income of $0.2 million, or $0.01 per diluted share, in the first quarter of fiscal 2017.

Balance Sheet

As of June 30, 2017, the Company had cash and cash equivalents of $1.2 million compared to $2.5 million as of June 30, 2016. Working capital was $14.2 million as of June 30, 2017 compared to $13.4 million as of June 30, 2016. As of June 30, 2017, the Company had $1.1 million of bank loans due within one year.

For the three months ended June 30, 2017, net cash used in operating activities was $0.9 million. Net cash used in investing activities was $1.0 million. Net cash provided by financing activities was $0.6 million.

About iFresh, Inc.

iFresh Inc., headquartered in New York, New York, is a leading Asian American grocery supermarket chain and online grocer. With nine retail supermarkets along the US eastern seaboard and two in-house wholesale businesses strategically located in cities with a highly concentrated Asian population, the Company 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 perishables 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.


Financial statements below:



iFRESH INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
For the three months ended
June 30,
2017
June 30,
2016
Net sales $30,127,855 $28,685,300
Net sales-related parties 2,400,671 1,604,592
Total net sales 32,528,526 30,289,892
Cost of sales 21,702,740 20,778,908
Cost of sales-related parties 1,991,930 1,331,392
Occupancy costs 1,942,842 1,840,067
Gross profit 6,891,014 6,339,525
Selling, general and administrative expenses 7,484,823 6,225,909
Income (Loss) from operations (593,809) 113,616
Interest expenses, net (167,539) (43,574)
Other income 201,905 245,238
Income(Loss) before income taxes (559,443) 315,280
Income tax provision (benefit) (290,910) 137,535
Net income (Loss) $(268,533) $177,745
Net income (loss) per share:
Basic $(0.02) $0.01
Diluted $(0.02) $0.01
Weighted average shares outstanding:
Basic 14,116,589 12,000,000
Diluted 14,116,589 12,000,000



iFRESH INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
June 30,
2017
March 31,
2017
ASSETS
Current assets:
Cash and cash equivalents $1,173,203 $2,508,362
Accounts receivable, net 2,527,238 2,272,011
Inventories, net 11,084,727 9,796,984
Prepaid expenses and other current assets 1,159,666 981,017
Advances to related parties 15,712,108 14,852,083
Total current assets 31,656,942 30,410,457
Property and equipment, net 9,190,075 9,290,674
Intangible assets, net 1,266,668 1,300,001
Security deposits 972,376 912,346
Deferred income taxes 377,554 86,799
Total assets $43,463,615 $42,000,277
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable $12,758,877 12,364,071
Deferred revenue 207,387 206,737
Bank loans, current, net 1,088,024 1,144,568
Notes payable, current 265,828 262,578
Capital lease obligations, current 58,413 51,376
Accrued expenses 812,873 730,392
Taxes payable 1,769,398 1,769,398
Other payables, current 525,797 501,213
Total current liabilities 17,486,597 17,030,333
Bank loans, non-current, net 13,561,017 12,779,838
Notes payable, non-current 406,833 379,376
Capital lease obligations, non-current 81,180 59,907
Deferred rent 5,587,433 5,424,134
Other payables, non-current 49,800 34,800
Total liabilities 37,172,860 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, 14,123,033 and 14,103,033 shares issued and outstanding as of June 30, 2017 and March 31, 2017, respectively 1,412 1,410
Additional paid-in capital 9,342,423 9,075,025
Accumulated deficit (3,053,080) (2,784,546)
Total shareholders’ equity 6,290,755 6,291,889
Total liabilities and shareholders’ equity $43,463,615 42,000,277



iFRESH INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Three months Ended
June 30,
2017
June 30,
2016
Cash flows from operating activities
Net income (Loss) $(268,533) $177,745
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense 403,061 379,557
Amortization expense 78,958 33,333
Deferred income tax expense (benefit) (290,755) 51,848
Stock based compensation 267,400 -
Changes in operating assets and liabilities:
Accounts receivable (255,227) 90,555
Inventories (1,287,743) (1,382,313)
Prepaid expenses and other current assets (178,647) (193,011)
Security deposits (60,031) 168,695
Accounts payable 394,804 1,978,885
Deferred revenue 650 21,987
Accrued expenses 82,481 238,192
Taxes payable - (189,973)
Deferred rent 163,299 155,191
Other liabilities 39,584 (98,529)
Net cash provided by (used in) operating activities (910,699) 1,432,162
Cash flows from investing activities
Advances to related parties (860,025) (1,238,905)
Acquisition of property and equipment (165,018) (436,162)
Net cash used in investing activities (1,025,043) (1,675,067)
Cash flows from financing activities
Borrowings against lines of credit 1,000,000 200,000
Repayments on lines of credit borrowings (320,990) (104,527)
Borrowings on notes payable - 157,820
Repayments on notes payable (65,887) (61,259)
Payments on capital lease obligations (12,540) (13,426)
Net cash provided by financing activities 600,583 178,608
Net decrease in cash and cash equivalents (1,335,159) (64,297)
Cash and cash equivalents at beginning of the period 2,508,362 551,782
Cash and cash equivalents at the end of the period $1,173,203 $487,485
Supplemental disclosure of cash flow information
Cash paid for interest $120,446 $43,634
Cash paid for income taxes $- $280,001
Supplemental disclosure of non-cash investing and financing activities
Capital expenditures funded by capital lease obligations and notes payable $137,443 $157,820


Contact: ICR Inc. Rose Zu rose.zu@icrinc.com Tel: 347-436-8368

Source:iFresh Inc.