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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

 

Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934

 

Date of Report (Date of earliest event reported): June 23, 2022

 

Jerash Holdings (US), Inc.

(Exact name of registrant as specified in its charter)

 

Delaware   001-38474   81-4701719
(State or other jurisdiction
of incorporation)
  (Commission File Number)   (IRS Employer
Identification No.)

 

277 Fairfield Road, Suite 338, Fairfield, NJ   07004
(Address of principal executive offices)   (Zip Code)

 

Registrant’s telephone number, including area code: (214) 906-0065

 

(Former name or former address, if changed since last report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Securities registered pursuant to Section 12(b) of the Act:

 

Title of each class   Trading Symbol(s)   Name of each exchange on which registered
Common stock, par value $0.001 per share   JRSH   The NASDAQ Stock Market LLC

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b–2 of the Securities Exchange Act of 1934 (§ 240.12b–2 of this chapter).

 

Emerging growth company ☒

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☒ On June 23, 2022, Jerash Holdings (US), Inc. issued a press release to announce financial results for its fiscal 2022 fourth quarter and full year, ended March 31, 2022. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.

 

 

 

 


 

Item 2.02 Results of Operations and Financial Condition.

 

 

Item 9.01 Financial Statements and Exhibits.

 

(d) Exhibits.

 

Exhibit
Number
  Exhibit
99.1   Press Release dated June 23, 2022
104   Cover Page Interactive Data File (embedded within the Inline XBRL document)

 

1


 

SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

  JERASH HOLDINGS (US), INC.
     
June 23, 2022 By: /s/ Choi Lin Hung
    Choi Lin Hung
   

Chairman of the Board of Directors,

Chief Executive Officer, President, and Treasurer

 

 

2

 

 

EX-99.1 2 ea161927ex99-1_jerash.htm PRESS RELEASE DATED JUNE 23, 2022

Exhibit 99.1

 

 

Jerash Holdings Reports Financial Results for Fiscal 2022 and Fourth Quarter

 

--Company achieves record results for full year;

fourth quarter margin impacted by product mix shift--

 

FAIRFIELD, N.J., June 23, 2022 – Jerash Holdings (US), Inc. (NASDAQ: JRSH) (the “Company” or “Jerash”), which manufactures and exports custom, ready-made, sportswear and outerwear for leading global brands, today announced financial results for its fiscal 2022 fourth quarter and full year, ended March 31, 2022.

 

Full Year Fiscal 2022 Highlights

 

§ Revenue increased by 58.9 percent to $143.4 million
     
§ Gross margin of 19.1 percent, up 133 basis points, driven by a larger proportion of higher-margin products during the first three quarters
     
§ Operating income increased 94.7 percent to $10.5 million
     
§ Net income increased by 90.8 percent to $7.9 million, or $0.67 per share

 

Fourth Quarter Fiscal 2022 Highlights

 

§ Revenue increased by 30.1 percent to $30.9 million
     
§ Gross margin of 15.1 percent, down 445 basis points, impacted by fewer than expected jacket orders, which carry higher margins, and higher freight and shipping costs
     
§ Operating income of $275,000
     
§ Income tax expense of $405,000, due to higher provision for annualized consolidated global tax rates
     
§ Net loss of $130,000, after $312,000 of stock-based compensation expenses, or $0.01 per share

 

Fiscal 2023 First Quarter Outlook

 

§ Revenue for fiscal 2023 first quarter: $33 million to $35 million, up from $29.9 million in the fiscal 2022 first quarter
     
§ Gross margin for fiscal 2023 first quarter: around 18 percent, including expected impact due to recent China shutdown and customer orders with lower margin products

 

“Revenue for the full year and fourth quarter increased sharply, demonstrating our company’s underlying foundational strength and the attractiveness of our manufacturing capabilities to global brands,” said Sam Choi, Jerash’s chairman and chief executive officer. “However, margins during the fourth quarter were impacted by a shift in product mix, most notably, fewer than expected orders of higher-margin jackets.

 

“As U.S. retailers currently face the strains of a weaker economic environment due, in part, to inflation, we are focused on expanding our customer base among high-profile global brands. We are pleased that we have already received new orders from our first European-based high-fashion brand, and other new customers are in the pipeline. Our factories are fully booked through December,” Choi added.

 

Gilbert Lee, chief financial officer of Jerash, said, “While revenue continues to grow at a healthy pace, we anticipate margin pressures will continue in our new fiscal year, due partially to the expansion of our customer base and production of new items, as well as the general economic impact on our existing customers and their order flow. Our balance sheet and cash position remain strong, with $25.2 million in cash and working capital of $55.7 million at the end of the year, and essentially no debt.”

 

-1-


 

Fiscal 2022 Fourth Quarter Results

 

Fiscal 2022 fourth quarter revenue rose by 30.1 percent to $30.9 million, from $23.8 million in the same period last year, primarily due to increased shipments from existing and new customers.

 

Gross profit was $4.7 million for both the fiscal 2022 and 2021 fourth quarters. Gross margin for the most recent fourth quarter decreased to 15.1 percent, from 19.6 percent in the same period last year. Shipments in the fiscal 2021 fourth quarter included several higher-margin customer orders that were pushed back from the third quarter, due the COVID-19 pandemic.

 

Operating expenses totaled $4.4 million in the fiscal 2022 fourth quarter, versus $3.5 million in the same period last year. Stock-based compensation expenses were $312,000 in the fiscal 2022 fourth quarter, compared with $24,000 in the same period last year.

 

Operating income was $275,000 in the fiscal 2022 fourth quarter, versus $1.1 million in the same period last year. Income tax expenses for fiscal fourth quarter were $405,000, compared with $451,000 in the same period last year.

 

Net loss was $130,000, after $312,000 of stock-based compensation expenses, or $0.01 per share, in the fiscal 2022 fourth quarter, versus net income of $681,000, or $0.06 per share, in the same period last year. Comprehensive loss attributable to Jerash’s common stockholders totaled $109,000 in the fiscal 2022 fourth quarter, versus comprehensive income of $657,000 in the same period last year.

 

Fiscal 2022 Full Year Results

 

Fiscal 2022 revenue increased by 58.9 percent to $143.4 million, from $90.2 million in fiscal 2021, reflecting orders from the Company’s major U.S. customers, along with a strong recovery from the pandemic early in the fiscal year.

 

Gross profit in fiscal 2022 totaled $27.3 million, an increase of 70.8 percent, compared with $16.0 million in fiscal 2021. Gross margin rose to 19.1 percent in fiscal 2022 from 17.7 percent in fiscal 2021. The increase in gross profit margin was primarily driven by product mix that included a greater proportion of higher margin products.

 

Operating expenses in fiscal 2022 were $16.8 million, compared with $10.6 million in fiscal 2021. Stock-based compensation expenses were $947,000 in fiscal 2022, compared with $66,000 in fiscal 2021.

 

Operating income nearly doubled to $10.5 million in fiscal 2022, from $5.4 million in fiscal 2021.

 

Net income increased 90.8 percent to $7.9 million, or $0.67 per share, in fiscal 2022, from $4.1 million, or $0.37 per share, in fiscal 2021. Comprehensive income attributable to Jerash’s common stockholders in fiscal 2022 was $8.1 million, compared with $4.1 million in fiscal 2021.

 

Balance Sheet, Cash Flow and Dividends

 

Cash totaled $25.2 million, and net working capital was $55.7 million at March 31, 2022.

 

Jerash paid a regular quarterly dividend of $0.05 per share on its common stock on June 3, 2022, to stockholders of record as of May 27, 2022.

 

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Conference Call

 

Jerash Holdings will host an investor conference call to discuss its fiscal 2022 fourth quarter and full year results today, June 23, 2022, at 9:00 a.m. Eastern Time. 

 

Phone: 888-506-0062 (domestic); 973-528-0011 (international)

Conference ID: 622699

 

A live and archived webcast will be available online in the investor relations section of Jerash’s website at www.jerashholdings.com.  For those who are not able to listen to the live broadcast, the call will be archived for approximately one year on the website. 

 

About Jerash Holdings (US), Inc.

 

Jerash Holdings (US), Inc. manufactures and exports custom, ready-made, sportswear and outerwear for leading global brands and retailers, including VF Corporation (which owns brands such as The North Face, Timberland, and Vans), New Balance, G-III (which owns brands such as Calvin Klein, Tommy Hilfiger, DKNY, and Guess), American Eagle, Walmart and Costco. Jerash’s existing production facilities comprise six factories and four warehouses, and Jerash currently employs approximately 5,700 people. Additional information is available at www.jerashholdings.com.

 

Forward-Looking Statements

 

This news release contains forward-looking statements that involve risks and uncertainties, which may cause actual results to differ materially from the statements made. When used in this document, the words “may”, “would”, “could”, “will”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, “expect”, “seek”, “potential,” “outlook” and similar expressions are intended to identify forward-looking statements. Such statements, including, but not limited to, Jerash’s current views with respect to future events and its financial forecasts, and expansion of the customer base among high-profile global brands, are subject to such risks and uncertainties. Many factors could cause actual results to differ materially from the statements made, including those risks described from time to time in filings made by Jerash with the Securities and Exchange Commission. In addition, there is uncertainty about the further spread of the COVID-19 virus or the occurrence of another wave of cases and the impact it may have on the Company’s operations, the demand for the Company’s products, global supply chains and economic activity in general. These and other risks and uncertainties are detailed in the Company’s filings with the Securities and Exchange Commission. Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking statements prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated or expected. Statements contained in this news release regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Jerash does not intend and does not assume any obligation to update these forward-looking statements, other than as required by law.

 

Contact:

 

PondelWilkinson Inc.  

Judy Lin Sfetcu or Roger Pondel  

310-279-5980; jsfetcu@pondel.com  

 

#   #   # 

(tables below)

 

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JERASH HOLDINGS (US), INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

FOR THE THREE- AND TWELVE-MONTHS ENDED MARCH 31, 2022 AND 2021

 

   

For the Three Months Ended

March 31,

   

For the Fiscal Years Ended

March 31,

 
    2022     2021     2022     2021  
    (Unaudited)     (Unaudited)              
                         
Revenue, net   $ 30,940,021     $ 23,756,363     $ 143,354,902     $ 90,213,361  
Cost of goods sold     26,254,643       19,102,170       116,023,267       74,213,993  
Gross Profit     4,685,378       4,654,193       27,331,635       15,999,368  
                                 
Selling, general and administrative expenses     4,098,300       3,479,158       15,895,998       10,546,267  
Stock-based compensation expenses     312,165       24,100       947,079       66,251  
Total Operating Expenses     4,410,465       3,503,258       16,843,077       10,612,518  
                                 
Income from Operations     274,913       1,150,935       10,488,558       5,386,850  
                                 
Other (Expense) Income:                                
Other (expense) income, net     436       (18,026 )     (44,683 )     108,509  
Total other (expense) income, net     436       (18,026 )     (44,683 )     108,509  
                                 
Net income before provision for income taxes     275,349       1,132,909       10,443,875       5,495,359  
                                 
Income tax expense     405,229       451,477       2,524,275       1,345,646  
                                 
Net Income (loss)     (129,880 )     681,432       7,919,600       4,149,713  
                                 
Other Comprehensive Income:                                
Foreign currency translation gain (loss)     21,131       (24,479 )     143,046       (7,577 )
Comprehensive Income (Loss) Attributable to Jerash Holdings (US), Inc.’s Common Stockholders   $ (108,749 )   $ 656,953     $ 8,062,646     $ 4,142,136  
                                 
Earnings (Loss) Per Share Attributable to Common Stockholders:                                
Basic and diluted   $ (0.01 )   $ 0.06     $ 0.67     $ 0.37  
                                 
Weighted Average Number of Shares                                
Basic     12,334,318       11,325,620       11,821,779       11,325,131  
Diluted     12,493,778       11,342,880       11,897,717       11,325,311  
                                 
Dividend per share   $ 0.05     $ 0.05     $ 0.20     $ 0.20  

 

-4-


JERASH HOLDINGS (US), INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 

    March 31,
2022
    March 31,
2021
 
             
ASSETS            
Current Assets:            
Cash   $ 25,176,120     $ 21,124,842  
Restricted cash     -       714,844  
Accounts receivable, net     11,049,069       12,033,268  
Tax recoverable     374,377       379,719  
Inventories     28,255,179       25,035,966  
Prepaid expenses and other current assets     3,233,592       2,329,289  
Investment deposits     500,000       -  
Advance to suppliers, net     1,284,601       3,036,693  
Total Current Assets     69,872,938       64,654,621  
                 
Restricted cash - non-current     1,407,368       1,020,777  
Long-term deposits     419,597       128,690  
Deferred tax assets, net     352,590       148,663  
Property, plant and equipment, net     10,933,147       5,699,506  
Goodwill     499,282       -  
Right of use assets     1,826,062       1,596,600  
Total Assets   $ 85,310,984     $ 73,248,857  
                 
LIABILITIES AND STOCKHOLDERS’ EQUITY                
                 
Current Liabilities:                
Credit facilities   $ -     $ 612,703  
Accounts payable     4,840,225       7,922,839  
Accrued expenses     3,115,953       2,331,809  
Income tax payable - current     2,861,272       1,803,175  
Other payables     2,278,816       1,455,208  
Amount due to a related party     300,166       301,930  
Operating lease liabilities - current     739,101       400,043  
Total Current Liabilities     14,135,533       14,827,707  
                 
Operating lease liabilities - non-current     869,313       935,773  
Income tax payable - non-current     1,001,880       1,094,048  
Total Liabilities     16,006,726       16,857,528  
                 
Commitments and Contingencies                
                 
Stockholders’ Equity                
Preferred stock, $0.001 par value; 500,000 shares authorized; none issued and outstanding   $ -     $ -  
Common stock, $0.001 par value; 30,000,000 shares authorized; 12,334,318 and 11,332,974 shares issued and outstanding respectively     12,334       11,333  
Additional paid-in capital     22,517,346       15,301,268  
Statutory reserve     379,323       346,315  
Retained earnings     46,268,110       40,748,314  
Accumulated other comprehensive gain (loss)     127,145       (15,901 )
Total Jerash Holdings (US), Inc.’s Stockholders Equity     69,304,258       56,391,329  
                 
Total Liabilities and Stockholders’ Equity   $ 85,310,984     $ 73,248,857  

 

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JERASH HOLDINGS (US), INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

    For the Fiscal Years Ended
March 31,
 
    2022     2021  
CASH FLOWS FROM OPERATING ACTIVITIES            
Net Income   $ 7,919,600     $ 4,149,713  
Adjustments to reconcile net income to net cash provided by operating activities:                
Depreciation and amortization     2,149,419       1,618,533  
Stock-based compensation expenses     947,079       66,251  
Bad debt expense     221,584       -  
Amortization of operating lease right-of-use assets     803,056       933,959  
Gain from sales of short-term investments     -       (124,889 )
Changes in operating assets:                
Accounts receivable     762,614       (6,697,520 )
Inventories     (3,219,213 )     (2,402,194 )
Prepaid expenses and other current assets     (904,305 )     432,585  
Advance to suppliers     1,752,091       (920,326 )
Deferred tax assets     (203,928 )     (8,768 )
Changes in operating liabilities:                
Accounts payable     (3,082,614 )     1,546,519  
Accrued expenses     783,087       88,170  
Other payables     823,608       525,425  
Operating lease liabilities     (759,919 )     (907,669 )
Income tax payable     971,386       201,566  
Net cash provided by (used in) operating activities     8,963,545       (1,498,645 )
                 
CASH FLOWS FROM INVESTING ACTIVITIES                
Purchases of short-term investment     -       (9,686,091 )
Proceeds of short-term investment     -       9,810,980  
Purchases of property, plant and equipment     (2,955,328 )     (890,462 )
Payments for construction of properties     (2,098,323 )     -  
Acquisition of MK Garments     (2,700,000 )     -  
Acquisition deposit     (500,000 )     -  
Payment for long-term deposits     (419,597 )     (128,690 )
Net cash used in investing activities     (8,673,248 )     (894,263 )
                 
CASH FLOWS FROM FINANCING ACTIVITIES                
Dividend payment     (2,366,796 )     (2,265,000 )
Repayment from short-term loan     (612,703 )     (235 )
Repayment of advance from a related party     (1,763 )     (1,763 )
Proceeds from short-term loan     -       612,703  
Net proceeds from issuance of common stock     6,270,000       -  
Net cash provided by (used in) financing activities     3,288,738       (1,654,295 )
                 
EFFECT OF EXCHANGE RATE CHANGES ON CASH     143,990       (7,763 )
                 
NET INCREASE (DECREASE) IN CASH     3,723,025       (4,054,966 )
                 
CASH, AND RESTRICTED CASH, BEGINNING OF THE YEAR     22,860,463       26,915,429  
                 
CASH, AND RESTRICTED CASH, END OF THE YEAR   $ 26,583,488     $ 22,860,463  
                 
CASH AND RESTRICTED CASH, END OF YEAR     26,583,488       22,860,463  
LESS: RESTRICTED CASH     -       714,844  
NON-CURRENT RESTRICTED CASH     1,407,368       1,020,777  
CASH, END OF YEAR   $ 25,176,120     $ 21,124,842  
                 
Supplemental disclosure information:                
Cash paid for interest   $ 210,576     $ -  
Income tax paid   $ 1,762,254     $ 773,320  
                 
Non-cash financing activities                
Right of use assets obtained in exchange for operating lease obligations   $ 1,022,172     $ 1,352,167  

 

-6-