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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 27, 2024
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: (201) 285-7973
(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. ☐
Item 2.02 Results of Operations and Financial Condition.
On June 27, 2024, Jerash Holdings (US), Inc. issued a press release to announce financial results for its fiscal year 2024 fourth quarter and full year, ended March 31, 2024. The press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
| Exhibit
Number |
Exhibit | |
| 99.1 | Press Release dated June 27, 2024 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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 27, 2024 | By: | /s/ Choi Lin Hung |
| Choi Lin Hung | ||
|
Chairman of the Board of Directors, Chief Executive Officer, President, and Treasurer |
||
2
Exhibit 99.1
Jerash Holdings Reports Financial Results
for Fiscal 2024 Fourth Quarter and Full Year
--Fourth Quarter Results Impacted by Production Delays Due to Red Sea Logistics Disruptions--
--Outlook for First Quarter and Fiscal 2025 Improves--
FAIRFIELD, N.J., June 27, 2024 – 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 2024 fourth quarter and full year, ended March 31, 2024.
“Continuing attacks on ships in the Red Sea, where approximately 12 percent of the world’s trade passes, again caused supply chain disruptions throughout the region,” said Sam Choi, Jerash’s chairman and chief executive officer. “Shipments of raw materials to Jerash were delayed, which impacted the Company’s production for its global customers and, in turn, Jerash’s financial performance for the fiscal fourth quarter and full year. Certain orders that could not be completed during the fourth quarter were shipped in the fiscal 2025 first quarter.
“Gross margin was substantially down for the fiscal fourth quarter due to significantly higher ocean freight and transportation costs from Asia to Jordan. However, we have identified and are now aggressively increasing our sourcing of raw materials from Turkey and Egypt to circumvent shipping routes and related logistics costs. During the fourth quarter, we were able to keep our factories busy by obtaining local orders, albeit with much lower margin, keeping our workforce employed and allowing us to be ready for growth in the new fiscal year.
“On a positive note, we are experiencing a tangible increase in purchase orders from long-term customers. As well, we are receiving an influx of business from new, high-profile global brands, both directly, and through our joint venture with Busana. Our manufacturing facilities currently are fully booked into the second fiscal quarter, which gives us renewed confidence as we enter the new fiscal year,” Choi added.
Outlook
| ● | Revenue for the fiscal 2025 first quarter is expected to increase by 14-15 percent from the same quarter last year; full year revenue is expected to increase by 15-18 percent. |
| ● | Gross margin goal for fiscal 2025 year is currently expected to be around 13-15 percent, subject to logistics and shipping charges and final product mix of shipments. |
Fiscal 2024 Fourth Quarter Results
Fiscal 2024 fourth quarter revenue was $21.6 million, down 9.3 percent from $23.8 million in the same quarter last year, primarily due to reduced shipments to our major customers in the U.S. caused by inadequate materials for production due to logistical disruptions and extended supply chain lead times in the Middle East. Revenue was negatively impacted by approximately $3 to $4 million of orders, with shipments delayed to the fiscal 2025 first quarter to customers in the U.S.
Gross profit was $1.5 million for the fiscal 2024 fourth quarter, compared with $2.5 million in the same quarter last year. Gross margin for fiscal 2024 fourth quarter decreased to 7.0 percent, from 10.3 percent in the same period last year. The decrease in gross margin was primarily driven by higher ocean freight and transportation costs, as well as manufacturing lower margin orders from local customers, to offset the decrease in shipments to major customers in the U.S.
Operating expenses totaled $4.5 million in the fiscal 2024 fourth quarter, compared with $4.3 million in the same quarter last year.
Operating loss was $3.0 million for the fiscal 2024 fourth quarter, compared with operating loss of $1.8 million for the same quarter last year.
Total other expenses in the fiscal 2024 fourth quarter were $134,000, compared with $86,000 for the same quarter last year.
Net loss was $3.1 million, or $0.25 per share, for the fiscal 2024 fourth quarter, compared with net loss of $2.0 million, or $0.16 per share, in the same period last year.
Comprehensive loss attributable to Jerash’s common stockholders totaled $3.4 million in the fiscal 2024 fourth quarter, compared with comprehensive loss totaled $1.9 million in the same quarter last year.
Balance Sheet, Cash Flow and Dividends
Cash and restricted cash totaled $14.0 million, and net working capital was $36.1 million as of March 31, 2024. Net cash provided by operating activities was approximately $2.5 million for fiscal 2024, compared with $10.8 million in fiscal 2023.
On May 21, 2024, the board of directors of Jerash approved a regular quarterly dividend of $0.05 per share on the Company’s common stock. The dividend was paid on June 7, 2024, to stockholders of record as of May 31, 2024.
Fiscal 2024 Full Year Results
Fiscal 2024 revenue decreased to $117.2 million, from $138.1 million in fiscal 2023. The decrease in revenue was primarily due to reduced shipments to the Company’s two major customers in the U.S., as well as the supply chain logistics disruptions with the Red Sea crisis.
Gross profit in fiscal 2024 totaled $16.9 million, compared with $21.8 million in fiscal 2023. Gross margin was 14.4 percent in fiscal 2024, compared with 15.8 percent in fiscal 2023.
Operating expenses in fiscal 2024 were $17.6 million, compared with $17.4 million in fiscal 2023. Operating loss in fiscal 2024 was $665,000, compared with operating income of $4.4 million in fiscal 2023.
Net loss for fiscal 2024 amounted to $2.0 million, or $0.16 per share, compared with net income of $2.4 million, or $0.19 per share, in fiscal 2023.
Comprehensive loss attributable to Jerash’s common stockholders was $2.4 million in fiscal 2024, compared with comprehensive income of $2.2 million in fiscal 2023.
Conference Call
Jerash Holdings will host an investor conference call to discuss its fiscal 2024 fourth quarter and full year results today, June 27, 2024, at 9:00 a.m. Eastern Time.
| Phone: | 888-506-0062 (domestic); 973-528-0011 (international) |
| Conference ID: | 933383 |
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 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 licenses brands such as Calvin Klein, Tommy Hilfiger, DKNY, and Guess), American Eagle, and Skechers. Jerash’s existing production facilities comprise six factory units and four warehouses, and Jerash currently employs approximately 5,000 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 U.S. 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 U.S. 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 or Roger Pondel
310-279-5980; jlin@pondel.com
# # #
(tables below)
JERASH HOLDINGS (US), INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
FOR THE THREE- AND TWELVE-MONTHS ENDED MARCH 31, 2024 AND 2023
|
For the Three Months Ended March 31, |
For the Fiscal Years Ended March 31, |
|||||||||||||||
| 2024 | 2023 | 2024 | 2023 | |||||||||||||
| (Unaudited) | (Unaudited) | |||||||||||||||
| Revenue, net | $ | 21,574,454 | $ | 23,774,006 | $ | 117,187,340 | $ | 138,063,309 | ||||||||
| Cost of goods sold | 20,073,952 | 21,321,046 | 100,284,991 | 116,273,569 | ||||||||||||
| Gross Profit | 1,500,502 | 2,452,960 | 16,902,349 | 21,789,740 | ||||||||||||
| Selling, general and administrative expenses | 4,262,721 | 4,164,229 | 16,581,256 | 16,960,978 | ||||||||||||
| Stock-based compensation expenses | 258,350 | 119,078 | 986,048 | 413,900 | ||||||||||||
| Total Operating Expenses | 4,521,071 | 4,283,307 | 17,567,304 | 17,374,878 | ||||||||||||
| (Loss) income from Operations | (3,020,569 | ) | (1,830,347 | ) | (664,955 | ) | 4,414,862 | |||||||||
| Other (Expense) Income: | ||||||||||||||||
| Interest expenses | (220,440 | ) | (267,800 | ) | (1,203,596 | ) | (768,131 | ) | ||||||||
| Other income, net | 86,493 | 181,521 | 499,120 | 437,002 | ||||||||||||
| Total other expense, net | (133,947 | ) | (86,279 | ) | (704,476 | ) | (331,129 | ) | ||||||||
| Net (loss) income before provision for income taxes | (3,154,516 | ) | (1,916,626 | ) | (1,369,431 | ) | 4,083,733 | |||||||||
| Income tax (income) expenses | (16,361 | ) | 67,703 | 672,495 | 1,664,110 | |||||||||||
| Net (loss) income | (3,138,155 | ) | (1,984,329 | ) | (2,041,926 | ) | 2,419,623 | |||||||||
| Net loss attributable to noncontrolling interest | 49,397 | - | 36,024 | - | ||||||||||||
| Net (loss) income attributable to Jerash Holdings (US), Inc’s Common Stockholders | $ | (3,088,758 | ) | $ | (1,984,329 | ) | $ | (2,005,902 | ) | $ | 2,419,623 | |||||
| Net (loss) income | $ | (3,138,155 | ) | $ | (1,984,329 | ) | $ | (2,041,926 | ) | $ | 2,419,623 | |||||
| Other Comprehensive (Loss) Income: | ||||||||||||||||
| Foreign currency translation (loss) gain | (313,761 | ) | 45,692 | (369,090 | ) | (250,374 | ) | |||||||||
| Total Comprehensive (Loss) Income | (3,451,916 | ) | (1,938,637 | ) | (2,411,016 | ) | 2,169,249 | |||||||||
| Comprehensive loss attributable to noncontrolling interest | 49,397 | - | 36,024 | - | ||||||||||||
| Comprehensive (Loss) Income Attributable to Jerash Holdings (US), Inc.'s Common Stockholders | $ | (3,402,519 | ) | $ | (1,938,637 | ) | $ | (2,374,992 | ) | $ | 2,169,249 | |||||
| (Loss) Earnings Per Share Attributable to Common Stockholders: | ||||||||||||||||
| Basic and diluted | $ | (0.25 | ) | $ | (0.16 | ) | $ | (0.16 | ) | $ | 0.19 | |||||
| Weighted Average Number of Shares | ||||||||||||||||
| Basic | 12,294,840 | 12,525,166 | 12,294,840 | 12,635,785 | ||||||||||||
| Diluted | 12,294,840 | 12,525,166 | 12,294,840 | 12,675,351 | ||||||||||||
| Dividend per share | $ | 0.05 | $ | 0.05 | $ | 0.20 | $ | 0.20 | ||||||||
JERASH HOLDINGS (US), INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| March 31, 2024 | March 31, 2023 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 12,428,369 | $ | 17,801,614 | ||||
| Accounts receivable, net | 5,417,513 | 2,240,537 | ||||||
| Bills receivable | - | 87,573 | ||||||
| Inventories | 27,241,573 | 32,656,833 | ||||||
| Prepaid expenses and other current assets | 2,746,068 | 2,964,578 | ||||||
| Advances to suppliers, net | 3,086,137 | 1,533,091 | ||||||
| Total Current Assets | 50,919,660 | 57,284,226 | ||||||
| Restricted cash – non-current | 1,608,498 | 1,609,989 | ||||||
| Long-term deposits | 802,306 | 841,628 | ||||||
| Deferred tax assets, net | 158,329 | 153,873 | ||||||
| Property, plant, and equipment, net | 24,998,096 | 22,355,574 | ||||||
| Goodwill | 499,282 | 499,282 | ||||||
| Operating lease right of use assets | 1,259,395 | 974,761 | ||||||
| Total Assets | $ | 80,245,566 | $ | 83,719,333 | ||||
| LIABILITIES AND EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 6,340,237 | $ | 5,782,570 | ||||
| Accrued expenses | 4,175,843 | 2,930,533 | ||||||
| Income tax payable – current | 1,647,199 | 2,846,201 | ||||||
| Other payables | 2,234,870 | 1,477,243 | ||||||
| Deferred revenue | 10,200 | 928,393 | ||||||
| Operating lease liabilities – current | 370,802 | 481,502 | ||||||
| Total Current Liabilities | 14,779,151 | 14,446,442 | ||||||
| Operating lease liabilities – non-current | 618,302 | 287,247 | ||||||
| Income tax payable – non-current | 417,450 | 751,410 | ||||||
| Total Liabilities | 15,814,903 | 15,485,099 | ||||||
| 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; 12,534,318 shares issued, and 12,294,840 shares outstanding | 12,534 | 12,534 | ||||||
| Additional paid-in capital | 23,917,094 | 22,931,046 | ||||||
| Treasury stock, 239,478 shares | (1,169,046 | ) | (1,169,046 | ) | ||||
| Statutory reserve | 413,821 | 410,847 | ||||||
| Retained earnings | 41,704,238 | 46,172,082 | ||||||
| Accumulated other comprehensive loss | (492,319 | ) | (123,229 | ) | ||||
| Total Jerash Holdings (US), Inc.’ Stockholders’ Equity | 64,386,322 | 68,234,234 | ||||||
| Noncontrolling interest | 44,341 | - | ||||||
| Total Equity | 64,430,663 | 68,234,234 | ||||||
| Total Liabilities and Equity | $ | 80,245,566 | $ | 83,719,333 | ||||
JERASH HOLDINGS (US), INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Fiscal Years Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||
| Net (loss) income | $ | (2,041,926 | ) | $ | 2,419,623 | |||
| Adjustments to reconcile net (loss) income to net cash provided by operating activities: | ||||||||
| Depreciation | 2,539,736 | 2,430,692 | ||||||
| Stock-based compensation expenses | 986,048 | 413,900 | ||||||
| Bad debt recovery | (187,762 | ) | - | |||||
| Amortization of operating lease right-of-use assets | 759,764 | 989,220 | ||||||
| Changes in operating assets: | ||||||||
| Accounts receivable | (2,989,214 | ) | 8,808,532 | |||||
| Bills receivable | 87,573 | (87,573 | ) | |||||
| Inventories | 5,415,260 | (4,401,654 | ) | |||||
| Prepaid expenses and other current assets | 187,140 | 285,782 | ||||||
| Advance to suppliers | (1,553,046 | ) | (248,490 | ) | ||||
| Deferred tax assets | (4,456 | ) | 198,717 | |||||
| Changes in operating liabilities: | ||||||||
| Accounts payable | 557,667 | 942,345 | ||||||
| Accrued expenses | 1,245,310 | (185,421 | ) | |||||
| Other payables | 757,627 | (801,574 | ) | |||||
| Deferred revenue | (918,193 | ) | 928,393 | |||||
| Operating lease liabilities | (824,043 | ) | (977,584 | ) | ||||
| Income tax payable | (1,532,944 | ) | 92,226 | |||||
| Net cash provided by operating activities | 2,484,541 | 10,807,134 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||
| Purchases of property, plant and equipment | (1,241,226 | ) | (722,770 | ) | ||||
| Payments for construction of properties | (3,600,948 | ) | (5,084,044 | ) | ||||
| Acquisition of Ever Winland | - | (5,100,000 | ) | |||||
| Acquisition of Kawkab Venus | - | (2,200,000 | ) | |||||
| Payment for long-term deposits | (300,762 | ) | (668,337 | ) | ||||
| Net cash used in investing activities | (5,142,936 | ) | (13,775,151 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||
| Dividend payments | (2,458,968 | ) | (2,484,127 | ) | ||||
| Investment of noncontrolling interest | 31,365 | - | ||||||
| Share repurchase | - | (1,169,046 | ) | |||||
| Repayment from short-term loan | (7,545,829 | ) | (7,197,995 | ) | ||||
| Repayment to a related party | - | (300,166 | ) | |||||
| Proceeds from short-term loan | 7,545,829 | 7,197,995 | ||||||
| Net cash used in financing activities | (2,427,603 | ) | (3,953,339 | ) | ||||
| EFFECT OF EXCHANGE RATE CHANGES ON CASH AND RESTRICTED CASH | (288,738 | ) | (250,529 | ) | ||||
| NET DECREASE IN CASH AND RESTRICTED CASH | (5,374,736 | ) | (7,171,885 | ) | ||||
| CASH, AND RESTRICTED CASH, BEGINNING OF THE YEAR | 19,411,603 | 26,583,488 | ||||||
| CASH, AND RESTRICTED CASH, END OF THE YEAR | $ | 14,036,867 | $ | 19,411,603 | ||||
| CASH, AND RESTRICTED CASH, END OF THE YEAR | 14,036,867 | 19,411,603 | ||||||
| LESS: NON-CURRENT RESTRICTED CASH | 1,608,498 | 1,609,989 | ||||||
| CASH, END OF THE YEAR | $ | 12,428,369 | $ | 17,801,614 | ||||
| Supplemental disclosure information: | ||||||||
| Cash paid for interest | $ | 1,203,596 | $ | 768,131 | ||||
| Income tax paid, net | $ | 2,253,410 | $ | 1,747,635 | ||||
| Non-cash investing and financing activities | ||||||||
| Equipment obtained by utilizing long-term deposit | $ | 354,917 | $ | 237,412 | ||||
| Acquisition of Kawkab Venus by utilizing long-term deposit | $ | - | $ | 500,000 | ||||
| Operating lease right of use assets obtained in exchange for operating lease obligations | $ | 1,058,820 | $ | 190,654 | ||||
6