NEW YORK, Nov. 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 second quarter ended September 30, 2017.
Fiscal 2018 Second Quarter Highlights:
- Total net sales increase of 5% to $33.3 million, compared to $31.9 million in the second quarter of fiscal 2017
- Retail segment net sales increase of 3% to $26.8 million, compared to $26 million in the second quarter of fiscal 2017
- Total wholesale segment net sales increase of 12% to $6.6 million, compared to $5.9 million in the second quarter of fiscal 2017
- Gross profit for the second quarter ended September 30, 2017 increased by 5%, to $6.7 million compared to $6.4 million in the prior year period
Mr. Long Deng, Chairman of the board of directors and CEO of iFresh, commented, “We are pleased to report an increase in total net sales and double-digit wholesale segment growth in the quarter ended September 30, 2017. We report decreased net income in the quarter due to the increase of selling, general and administrative expenses, and higher interest expenses.
For the remainder of calendar year 2017, we remain committed to driving sales within existing stores and actively pursuing expansion opportunities in strategic geographies. The Orlando store we acquired in July 2017 has contributed $0.8 million revenue to net retail sales. The operation of our recently acquired stores in North Miami Beach and Milford will be reflected in our financial statement for the quarter ended December 31, 2017. We are also in the process of standardizing the presentation of our storefronts and improving our brand image and recognition.
We are ready to capture the opportunities in our growing market in the coming holiday season and expect to improve our bottom-line performance in the next quarter. We look forward to updating you on our performance in the near future,” concluded Mr. Deng.
Second Quarter 2018 Results
For the three months ended September 30, 2017, net sales were $33.3 million, an increase of $1.5 million, or 5%, from $31.9 million for the three months ended September 30, 2016. This was driven by a retail segment net sales increase of 3%, to $26.8 million, from $26 million in the second quarter of fiscal 2017, and a wholesale segment net sales increase of $0.7 million, to $6.6 million, from $5.9 million for the three months ended September 30, 2016.
Gross profit for the second quarter ended September 30, 2017 increased by 5%, to $6.7 million, compared to $6.4 million in the prior year period. Gross margin was 20.2% and 20.0% for the quarter ended September 30, 2017 and 2016, respectively.
Selling, General and Administrative Expenses
SG&A expense was $7.5 million in the three months ended September 30, 2017, compared to $6.1 million in the same period of the last fiscal year, which was mainly attributable to increased payroll expenses and the additional expenses related to two stores newly acquired on July 13, 2017.
Net income was $25,234 for the three months ended September 30, 2017, a decrease of $0.23 million, or 90%, from $0.26 million of net income for the three months ended September 30, 2016, mainly attributable to the increase in selling, general and administrative expenses and higher interest expenses.
Cash, Liquidity and Financial Position
As of September 30, 2017, the Company had cash and cash equivalents of $1.0 million, compared to $2.5 million as of March 31, 2017. Working capital was $15.7 million as of September 30, 2017 compared to $13.4 million as of March 31, 2017. As of September 30, 2017, the Company had $1.2 million of bank loans due within one year.
For the six months ended September 30, 2017, net cash used in operating activities was $1.0 million. Net cash used in investing activities was $3.2 million. Net cash provided by financing activities was $2.7 million.
About iFresh, Inc.
iFresh Inc., headquartered in New York, New York, is a leading Asian American grocery supermarket chain and online grocer. With nine retail supermarkets along the US eastern seaboard and two in-house wholesale businesses strategically located in cities with a highly concentrated Asian population, the Company aims to satisfy the increasing demands of Asian Americans, whose purchasing power has been growing rapidly, for fresh and culturally unique produce, seafood and other groceries that are not found in mainstream supermarkets. With an in-house proprietary delivery network, online sales channel and strong relations with farms that produce Chinese specialty vegetables and fruits, iFresh is able to offer fresh, high-quality specialty perishables at competitive prices to a growing base of customers. For more information, please visit: http://www.ifreshmarket.com/.
This announcement contains forward-looking statements. Forward-looking statements provide our current expectations or forecasts of future events. Forward-looking statements include statements about our expectations, beliefs, plans, objectives, intentions, assumptions and other statements that are not historical facts. Words or phrases such as “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “may,” “ongoing,” “plan,” “potential,” “predict,” “project,” “will” or similar words or phrases, or the negatives of those words or phrases, may identify forward-looking statements, but the absence of these words does not necessarily mean that a statement is not forward-looking. Examples of forward-looking statements in this announcement include, but are not limited to, statements regarding our disclosure concerning the Company’s operations, cash flows, financial position and dividend policy.
|iFRESH INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
|September 30,||March 31,|
|Cash and cash equivalents||$||1,016,352||$||2,508,362|
|Accounts receivable, net||3,345,880||2,272,011|
|Prepaid expenses and other current assets||1,874,874||981,017|
|Advances to related parties||16,665,703||14,852,083|
|Total current assets||34,225,591||30,410,457|
|Property and equipment, net||10,008,894||9,290,674|
|Intangible assets, net||1,233,335||1,300,001|
|Deferred income taxes||350,373||86,799|
|LIABILITIES AND SHAREHOLDERS’ EQUITY|
|Borrowings against term loan -current, net||1,167,764||1,144,568|
|Notes payable, current||241,434||262,578|
|Capital lease obligations, current||48,581||51,376|
|Other payables, current||481,653||501,213|
|Total current liabilities||18,552,998||17,030,333|
|Borrowings against lines of credit & term loan-non-current, net||15,745,693||12,779,838|
|Notes payable, non-current||380,784||379,376|
|Capital lease obligations, non-current||82,013||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, $0.0001 par value; 100,000,000 shares authorized, 14,173,033 and 14,103,033 shares issued and outstanding as of September 30, 2017 and March 31, 2017, respectively||1,417||1,410|
|Additional paid-in capital||9,211,426||9,075,025|
|Total shareholders’ equity||6,184,998||6,291,889|
|Total liabilities and shareholders’ equity||$||46,907,970||42,000,277|
|iFRESH INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|For the three months ended|
|September 30,||September 30,|
|Net sales-related parties||2,575,092||2,024,569|
|Total net sales||33,339,892||31,886,900|
|Cost of sales||22,765,456||22,376,055|
|Cost of sales-related parties||1,960,566||1,354,187|
|Selling, general and administrative expenses||7,476,204||6,130,117|
|Income (Loss) from operations||(756,096||)||261,155|
|Interest expense, net||(208,844||)||(46,718||)|
|Income(Loss) before income taxes||52,570||477,640|
|Income tax provision (benefit)||27,336||219,279|
|Net income (Loss)||$||25,234||$||258,361|
|Net income (loss) per share:|
|Weighted average shares outstanding:|
|iFRESH INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|For the Six months ended|
|September 30,||September 30,|
|Cash flows from operating activities|
|Net income (loss)||$||(243,299||)||$||436,106|
|Adjustments to reconcile net income (loss) to net cash provided by operating activities:|
|Share based compensation||267,400||–|
|Deferred income tax expense (benefit)||(263,574||)||130,396|
|Changes in operating assets and liabilities:|
|Prepaid expenses and other current assets||(893,856||)||(103,643||)|
|Net cash provided by (used in) operating activities||(993,367||)||2,917,448|
|Cash flows from investing activities|
|Advances made to related parties||(1,943,197||)||(2,445,980||)|
|Acquisition of property and equipment||(1,241,261||)||(607,533||)|
|Cash proceeds received from acquisition of Glen Cove||5,631||–|
|Net cash used in investing activities||(3,178,827||)||(3,053,513||)|
|Cash flows from financing activities|
|Proceeds from borrowings against lines of credit||2,500,000||200,000|
|Proceeds from borrowings against term loan||1,050,000||–|
|Repayments on lines of credit borrowings||(652,199||)||(82,000||)|
|Proceeds from borrowings on notes payable||–||288,129|
|Repayments on notes payable||(187,401||)||(116,857||)|
|Payments on capital lease obligations||(30,216||)||(26,345||)|
|Net cash provided by financing activities||2,680,184||262,927|
|Net increase (decrease) in cash and cash equivalents||(1,492,010||)||126,862|
|Cash and cash equivalents at beginning of the period||2,508,362||551,782|
|Cash and cash equivalents at the end of the period||$||1,016,352||$||678,644|
|Supplemental disclosure of cash flow information|
|Cash paid for interest||$||327,900||$||90,649|
|Cash paid for income taxes||$||296,067||$||592,325|
|Supplemental disclosure of non-cash investing and financing activities|
|Capital expenditures funded by capital lease obligations and notes payable||$||217,193||$||288,129|
|Stock issued for Glen Cove Acquisition||$||645,500||$||–|
Dragon Gate Investment Partners LLC