NEW YORK, Feb. 14, 2018 (GLOBE NEWSWIRE) -- 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
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 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/.
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 SUBSIDIARIES|
CONDENSED CONSOLIDATED BALANCE SHEETS
|Cash and cash equivalents||$||902,823||$||2,508,362|
|Accounts receivable, net||4,898,740||2,272,011|
|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|
|Deferred income taxes||389,435||86,799|
|LIABILITIES AND SHAREHOLDERS’ EQUITY|
|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|
|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|
|Other payables - non-current||67,800||34,800|
|Commitments and contingencies|
|Preferred shares, $.0001 par value, 1,000,000 shares authorized; none issued.||-||-|
|Common stock, $0.0001 par value; 100,000,000 shares authorized,|
14,220,548 and 14,103,033 shares issued and outstanding as of
December 31, 2017 and March 31, 2017, respectively
|Additional paid-in capital||8,602,729||9,075,025|
|Total shareholders’ equity||5,295,255||6,291,889|
|Total liabilities and shareholders’ equity||$||49,009,898||42,000,277|
|iFRESH INC AND SUBSIDIARIES|
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|For the three |
|For the nine |
|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|
|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||)|
|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:|
|Weighted average shares outstanding:|
|iFRESH INC AND SUBSIDIARIES|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|For the Nine months Ended|
|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:|
|Share based compensation||297,536||-|
|Deferred income taxes||(302,636||)||312,360|
|Changes in operating assets and liabilities:|
|Prepaid expenses and other current assets||(1,548,863||)||(142,192||)|
|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|
Dragon Gate Investment Partners LLC