Questions? +1 (202) 540-8337 Login
Trusted News Since 1995
A service for food industry professionals · Saturday, October 20, 2018 · 465,658,162 Articles · 3+ Million Readers

iFresh, Inc. Reports Fiscal 2018 Third Quarter Financial Results

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.

/EIN News/ -- 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

Net Sales

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

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/.

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.

 
 
 
iFRESH INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
 
    December 31,
2017
    March 31,
2017
 
ASSETS            
Current assets:            
Cash and cash equivalents   $ 902,823     $ 2,508,362  
Accounts receivable, net     4,898,740       2,272,011  
Inventories, net     11,519,616       9,796,984  
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  
Security deposits     1,232,506       912,346  
Deferred income taxes     389,435       86,799  
Total assets   $ 49,009,898     $ 42,000,277  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable   $ 16,470,850       12,364,071  
Deferred revenue     139,029       206,737  
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  
Accrued expenses     875,943       730,392  
Taxes payable     1,395,717       1,769,398  
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  
Deferred rent     6,286,568       5,424,134  
Other payables - non-current     67,800       34,800  
Total liabilities     43,714,643       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,
14,220,548 and 14,103,033 shares issued and outstanding as of
December 31, 2017 and March 31, 2017, respectively
    1,422       1,410  
Additional paid-in capital     8,602,729       9,075,025  
Accumulated deficit     (3,308,896 )     (2,784,546 )
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
(UNAUDITED)
 
    For the three
months ended
    For the nine
months ended
 
    December 31,
2017
    December 31,
2016
      December 31,
2017
    December 31,
2016
 
                         
Net sales   $ 33,702,943     $ 32,327,248     $ 94,595,598     $ 90,874,879  
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  
Occupancy costs     1,834,247       1,791,325       5,670,852       5,396,778  
Gross profit     7,521,383       7,404,112       21,132,505       20,134,909  
                                 
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 )
Other income     133,526       249,834       1,352,941       758,274  
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:                                
Basic   $ (0.02 )   $ 0.05     $ (0.04 )   $ 0.09  
Diluted   $ (0.02 )   $ 0.05     $ (0.04 )   $ 0.09  
Weighted average shares outstanding:                                
Basic     14,219,132       12,000,000       14,167,599       12,000,000  
Diluted     14,219,132       12,000,000       14,167,599       12,000,000  
                                 


 
 
iFRESH INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
 
    For the Nine months Ended  
    December 31,
2017
    December 31,
2016
 
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:                
Depreciation expense     1,277,863       1,165,643  
Amortization expense     236,874       99,999  
Share based compensation     297,536       -  
Deferred income taxes     (302,636 )     312,360  
Changes in operating assets and liabilities:                
Accounts receivable     (2,626,729 )     (741,643 )
Inventories     (1,722,632 )     (1,321,821 )
Prepaid expenses and other current assets     (1,548,863 )     (142,192 )
Security deposits     (140,744 )     159,240  
Accounts payable     4,053,328       4,194,650  
Deferred revenue     (67,708 )     55,040  
Accrued expenses     145,551       (28,263 )
Taxes payable     (373,681 )     (461,390 )
Deferred rent     522,546       403,644  
Other liabilities     136,883       635  
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  
                 

Contact:
Dragon Gate Investment Partners LLC
Tel: +1(646)-801-2803
Email: ifmk@dgipl.com

Primary Logo

Powered by EIN News