Market Overview

iFresh, Inc. Reports Fiscal 2018 First Quarter Financial Results

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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  
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