Jerash Holdings Reports Record Revenue and Earnings for Fiscal 2022 Second Quarter; Increases Revenue Guidance for Full Fiscal Year

FAIRFIELD, NJ / ACCESSWIRE / November 10, 2021 / Jerash Holdings (US), Inc. ("Jerash") (NASDAQ:JRSH), which manufactures and exports custom, ready-made, sportswear and outerwear for leading global brands, today announced financial results for its fiscal 2022 second quarter, ended September 30, 2021.

Financial Highlights - Fiscal 2022 Second Quarter Versus Fiscal 2021 Second Quarter

  • Revenue of $45.7 million, an increase of 68.8 percent, reflecting higher shipments
  • Gross profit of $10.1 million, an increase of 71.8 percent, due to higher revenue and gross margin
  • Gross margin of 22.1 percent versus 21.7 percent, reflecting improved product mix and higher sales volumes
  • Comprehensive income attributable to Jerash's common stockholders of $4.4 million, or $0.39 per share, vs. $2.6 million, or $0.23 per share

Fiscal 2022 Guidance

  • Fiscal 2022 revenue expected to be in the range of $125 million to $130 million versus $90.2 million in fiscal 2021
  • Revenue in fiscal 2022 expected to be at record levels
  • Fiscal 2022 third quarter revenue expected to be in the range of $31 million to $33 million

Sam Choi, chairman and chief executive officer, said, "Our fiscal 2022 second quarter results demonstrated continued strong progress, with robust performance in revenue and margin. Revenue and gross profit were at record levels for the second quarter, reflecting an increase in shipments to our largest customers as a result of strong demand and expanded capacity, as well as an improved mix of products sold.

"We continue to advance our plans to increase capacity and secure additional space to meet our customers' needs," Choi said. "We anticipate the momentum to continue into fiscal 2023. All of our existing factories in Jordan are fully booked through May 2022, with orders from existing top global brand-name customers. As a result, we have increased our fiscal 2022 revenue outlook to reflect the robust momentum and expanded capacity."

Fiscal 2022 Second Quarter Results

Fiscal 2022 second quarter revenue rose 68.8 percent to a record $45.7 million from $27.1 million in the same period last year, primarily due to higher shipments to the company's largest customers as a result of stronger demand and expanded capacity.

Gross profit increased to $10.1 million in the fiscal 2022 second quarter, from $5.9 million in the same period last year, primarily due to higher revenue and gross margin. Gross margin expanded 40 basis points to 22.1 percent in the fiscal 2022 second quarter, from 21.7 percent in the same period last year, reflecting an improved product mix and higher sales volumes.

Operating expenses totaled $4.5 million in the fiscal 2022 second quarter, versus $2.9 million in the same period last year. The increase was primarily due to higher headcount to support the company's growth, an increase in shipping costs, stock-based compensation, and expenses related to COVID-19 measures and recruitment for new migrant workers.

Operating income rose to $5.6 million in the fiscal 2022 second quarter, from $3.0 million in the same period last year. Net income advanced to $4.4 million in the fiscal 2022 second quarter, from $2.6 million in the same period last year. Comprehensive income attributable to Jerash's common stockholders increased to $4.4 million, or $0.39 per share, in the fiscal 2022 second quarter, from $2.6 million, or $0.23 per share, in the same period last year.

Gilbert Lee, chief financial officer, said, "Our updated outlook for the remainder of this fiscal year reflects our expectation for continued strong customer demand and increased capacity with orders reflective of typical customer patterns. However, it is important to note that potential risks from supply chain issues that some of our customers are facing could affect the timing of shipments in the near term."

Cash and restricted cash totaled $26.3 million, and net working capital was $54.3 million at September 30, 2021. Net cash provided by operating activities was $21.7 million in the fiscal 2022 second quarter, compared with $9.3 million in the same period last year. The increase was primarily due to changes in working capital.

On November 2, 2021, Jerash approved a regular quarterly dividend of $0.05 per share on its common stock, payable on November 29, 2021, to stockholders of record as of November 22, 2021.

On October 4, 2021, Jerash completed a public offering of 1.4 million shares of common stock at a price of $7.00 per share, which included 1.0 million shares issued and sold by the company and 400,000 shares sold by a selling shareholder. Jerash received net proceeds of approximately $6.25 million from the offering, after deducting the underwriting discount and estimated offering expenses payable by the company.

On October 11, 2021, Jerash completed the acquisition of Mustafa and Kamal Ashraf Trading Company (Jordan) for Manufacture of Ready-Made Clothes LLC ("MK Garments"), which operates a 71,000 square-foot apparel manufacturing facility. Jerash assumed production at the MK Garments facility and retained its 500 employees in August 2021.

Conference Call

Jerash will host an investor conference call to discuss its fiscal 2022 second quarter results tomorrow, November 11, 2021, at 9:00 a.m. Eastern Time.

Phone: 888-506-0062 (domestic); 973-528-0011 (international)
Conference ID: 470920

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, sportwear and outerwear for leading global brands and retailers, including Walmart, Costco, New Balance, G-III (which owns brands such as Calvin Klein, Tommy Hilfiger, DKNY, and Guess), American Eagle, and VF Corporation (which owns brands such as The North Face, Timberland, and JanSport). Jerash's existing production facilities comprise six factory units and four warehouses. Jerash currently employs approximately 5,100 people, and the total annual capacity at its facilities is approximately 15 million pieces. 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, 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 new variants thereof, 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)

JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)

For the Three Months Ended
September 30,
For the Six Months Ended
September 30,

2021 2020 2021 2020
Revenue, net
$45,711,166 $27,086,318 $75,599,858 $45,793,073
Cost of goods sold
35,606,587 21,203,568 59,864,337 36,858,753
Gross Profit
10,104,579 5,882,750 15,735,521 8,934,320
Selling, general and administrative expenses
4,223,671 2,853,679 7,537,902 4,704,506
Stock-based compensation expenses
315,296 - 315,813 42,151
Total Operating Expenses
4,538,967 2,853,679 7,853,715 4,746,657
Income from Operations
5,565,612 3,029,071 7,881,806 4,187,663
Other (Expense) Income:
Other (expense) income, net
(74,557) 62,917 (38,276) 60,178
Total other (expense) income, net
(74,557) 62,917 (38,276) 60,178
Net income before provision for income taxes
5,491,055 3,091,988 7,843,530 4,247,841
Income tax expense
1,050,330 531,896 1,468,139 873,896
Net Income
4,440,725 2,560,092 6,375,391 3,373,945
Net loss attributable to noncontrolling interest
705 8 722 14
Net income attributable to Jerash Holdings (US), Inc.'s Common Stockholders
$4,441,430 $2,560,100 $6,376,113 $3,373,959
Net Income
$4,440,725 $2,560,092 $6,375,391 $3,373,945
Other Comprehensive Income:
Foreign currency translation (loss) gain
(263) 712 79,725 159
Total Comprehensive Income
4,440,462 2,560,804 6,455,116 3,374,104
Comprehensive income attributable to noncontrolling interest
- - - -
Comprehensive Income Attributable to Jerash Holdings (US), Inc.'s Common Stockholders
$4,440,462 $2,560,804 $6,455,116 $3,374,104
Earnings Per Share Attributable to Common Stockholders:
Basic and diluted
$0.39 $0.23 $0.56 $0.30
Weighted Average Number of Shares
Basic
11,334,318 11,325,000 11,333,907 11,325,000
Diluted
11,512,533 11,329,953 11,403,931 11,330,081
Dividend per share
$0.05 $0.05 $0.10 $0.10

JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE
CONSOLIDATED BALANCE SHEETS

September 30,
2021
March 31,
2021
(Unaudited)
ASSETS
Current Assets:
Cash
$25,042,220 $21,126,090
Restricted cash
- 714,844
Accounts receivable, net
13,416,125 12,033,268
Tax recoverable
1,079 379,719
Inventories
20,560,272 25,035,966
Prepaid expenses and other current assets
2,833,962 2,329,289
Investment deposits
3,200,000 -
Advance to suppliers, net
1,886,856 3,036,693
Total Current Assets
66,940,514 64,655,869
Restricted cash - non-current
1,301,588 1,020,777
Long-term deposits
268,255 128,690
Deferred tax assets, net
148,663 148,663
Property, plant and equipment, net
6,554,481 5,699,506
Right of use assets
1,601,671 1,596,600
Total Assets
$76,815,172 $73,250,105
LIABILITIES AND EQUITY
Current Liabilities:
Credit facilities
$- $612,703
Accounts payable
4,535,255 7,922,839
Accrued expenses
3,460,886 2,332,867
Income tax payable - current
1,519,978 1,803,175
Other payables
1,076,251 1,455,208
Receipt in advance from a customer
1,474,932 -
Operating lease liabilities - current
550,099 400,043
Total Current Liabilities
12,617,401 14,526,835
Operating lease liabilities - non-current
905,710 935,773
Income tax payable - non-current
961,048 1,094,048
Total Liabilities
14,484,159 16,556,656
Commitments and Contingencies
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; 11,334,318 and 11,332,974 shares issued and outstanding respectively
11,334 11,333
Additional paid-in capital
15,617,080 15,301,268
Statutory reserve
346,315 346,315
Retained earnings
45,991,062 40,748,314
Accumulated other comprehensive gain (loss)
63,824 (15,901)
Total Jerash Holdings (US), Inc.'s Stockholder's Equity
62,029,615 56,391,329
Noncontrolling interest
301,398 302,120
Total Equity
62,331,013 56,693,449
Total Liabilities and Equity
$76,815,172 $73,250,105

JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

For the Six Months Ended
September 30,
2021 2020
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income
$6,375,391 $3,373,945
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization
880,135 829,285
Stock-based compensation expenses
315,813 42,151
Bad debt expense
- 58,563
Amortization of operating lease right-of-use assets
356,030 365,478
Changes in operating assets:
Accounts receivable
(1,382,857) (14,588,644)
Inventories
4,475,694 12,328,893
Prepaid expenses and other current assets
(504,673) 659,257
Advance to suppliers
1,149,836 (677,415)
Changes in operating liabilities:
Accounts payable
(3,387,584) (1,423,796)
Accrued expenses
1,128,019 240,129
Other payables
(378,957) 212,586
Receipt in advance from a customer
1,474,932 -
Operating lease liabilities
(241,107) (257,577)
Income tax payable
(37,442) 550,033
Net cash provided by operating activities
10,223,230 1,712,888
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of property, plant and equipment
(1,606,419) (428,280)
Acquisition deposit
(3,200,000) -
Payment for long-term deposits
(268,255) -
Receipt of long-term deposits
- 119,687
Net cash used in investing activities
(5,074,674) (308,593)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend payment
(1,133,365) (1,132,500)
Repayment from short-term loan
(612,703) (235)
Proceeds from short-term loan
- 932,152
Net cash used in financing activities
(1,746,068) (200,583)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
79,609 (30)
NET INCREASE IN CASH
3,482,097 1,203,682
CASH, AND RESTRICTED CASH, BEGINNING OF THE PERIOD
22,861,711 26,916,709
CASH, AND RESTRICTED CASH, END OF THE PERIOD
$26,343,808 $28,120,391
CASH AND RESTRICTED CASH, END OF PERIOD
26,343,808 28,120,391
LESS: NON-CURRENT RESTRICTED CASH
1,301,588 786,298
CASH, END OF PERIOD
$25,042,220 $27,334,093
-
Supplemental disclosure information:
Cash paid for interest
$74,401 $-
Income tax paid
$1,512,215 $347,689
Non-cash financing activities
Right of use assets obtained in exchange for operating lease obligations
$353,611 $172,413

SOURCE: Jerash Holdings (US), Inc.



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