8-K
Jerash Holdings (US), Inc. (JRSH)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The SecuritiesExchange Act of 1934
Date of Report (Date of earliest event reported):
November 10, 2021
Jerash Holdings (US), Inc.
(Exact name of registrant as specified in its charter)
| Delaware | 001-38474 | 81-4701719 |
|---|---|---|
| (State or other jurisdiction<br><br>of incorporation) | (Commission File Number) | (IRS Employer<br><br>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. ☒
Item 2.02 Results of Operations and Financial Condition.
On November 10, 2021, Jerash Holdings (US), Inc. issued a press release to announce financial results for its fiscal 2022 second quarter, ended September 30, 2021. 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 November 10, 2021 |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
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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. | ||
|---|---|---|
| November 10, 2021 | By: | /s/ Choi Lin Hung |
| Choi Lin Hung | ||
| Chairman of the Board of Directors,<br><br> <br>Chief Executive Officer, President, and Treasurer |
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Exhibit 99.1
Jerash Holdings Reports Record Revenue and Earningsfor Fiscal 2022 Second Quarter;
Increases Revenue Guidance for Full Fiscal Year
FAIRFIELD, N.J., 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 SecondQuarter 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<br>$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<br>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.
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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)
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JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
| For the Three Months Ended<br><br> September 30, | For the Six Months Ended<br> 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 |
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JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE
CONSOLIDATED BALANCE SHEETS
| March 31,<br> 2021 | ||||
|---|---|---|---|---|
| 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 |
All values are in US Dollars.
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JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
| For the Six Months Ended<br> 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 |
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