05 July

iFresh Inc. Reports Fiscal Year 2018 Financial Results

NEW YORK, July 05, 2018 (GLOBE NEWSWIRE) -- iFresh, Inc. (“iFresh” or “the Company”) (NASDAQ:IFMK), a leading Asian American grocery supermarket chain and online grocer, today announced its financial results for the year ended March 31, 2018.

Fiscal Year 2018 Financial Highlights

  • iFresh’s net sales were $136.7 million for the year ended March 31, 2018, an increase of $5.8 million, or 4.4%, from $ 130.9 million for the year ended March 31, 2017.
  • Gross profit for the year ended March 31, 2018 increased by 4%, to $29 million, compared to $28 million in the prior year period.

Fiscal Year 2018 and Recent Operational Highlights

  • On July 13, 2017, the Company acquired assets from Mia Supermarket in Orlando FL, a 20,370 square-foot grocery store located at 2415 E. Colonial Drive. iFresh acquired the supermarket for $1,050,000 in cash. The purchase included equipment and inventory. The Company did not assume any liabilities. The supermarket started operating in August 2017.
  • On July 13, 2017, the Company acquired all the shares of iFresh Glen Cove Inc. (“Glen Cove”) from Long Deng, the Company’s Chairman and Chief Executive Officer, for 50,000 shares of the Company’s common stock. Glen Cove is setting up a 22,859 square-foot brand new grocery store in Garden City, New York located at 192 Glen Cove Road. The Company expects  the Glen Cove supermarket to open in the last quarter of 2018.
  • On October 2, 2017, the Company acquired all the shares of New York Mart CT, Inc. (“NYM CT”) from Long Deng, the Company’s Chairman and Chief Executive Officer, for $3,500,000. NYM CT owns a supermarket in Connecticut that is currently under renovation. The Company expects the Connecticut store to open in the last quarter of 2018.
  • On October 2, 2017, the Company acquired all of the shares of New York Mart N. Miami Inc. (“NYM N. Miami”) from Long Deng, the Company’s Chairman and Chief Executive Officer, and Yang Yu Gao for $3,500,000 and 45,000 shares of the Company’s common stock. The Miami supermarket is currently under construction. The Company expects it to open in the last quarter of 2018.
  • iFresh’s online grocery initiative had 19,741 transactions and accumulated sales of approximately $1,585,120.71 from the commencement of the online store NYMart in January 2016 to March 31, 2018.

Mr. Long Deng, Chairman of the board of directors and CEO of iFresh, commented, “In fiscal year 2018, we achieved accelerated growth for both net sales and gross profit. Our vertically integrated structure enables us to supply 31% of the items sold in our retail supermarkets with ten self-owned brands. Also, live seafood and other perishables constituted 64.5% of total retail sales this year.” Mr. Deng added, “Three stores are currently under construction and expected to open in the fourth quarter of 2018. We will keep innovating and providing our customers with the freshest and the most authentic home-style gourmet food as well as vegetables and fruits delivered fresh every day.”

Full Year 2018 Financial Results

Net Sales

For the year ended March 31, 2018, net sales were $136.7 million, an increase of $5.8 million, or 4.4%, from $130.9 million for the year ended March 31, 2017.

Net retail sales to third parties increased by $2.5 million, or 2.3%, from $106.8 million for the year ended March 31, 2017, to $109.3 million for the year ended March 31, 2018. The increase resulted mainly from new stores opened in 2017, which contributed $3.0 million of retail sales, offset by a decrease of sales in our stores in Florida due to Hurricane Irma;

Net wholesale sales increased by $3.3 million from $24.1 million for the year ended March 31, 2017 to $27.4 million for the year ended March 31, 2018, which was attributable to an increase of $0.2 million in sales to related parties due to iFresh focusing on improving its central procurement system through its wholesale facilities and an increase of $3.1 million from its wholesale revenue to third parties due to expansion of the wholesales business.

Gross Profit

For the retail segment, gross profit was $21.8 and $22.5 million for the years ended March 31, 2018 and 2017, respectively. Gross margin was 20.0% and 21.1% for the years ended March 31, 2018 and 2017, respectively. Gross profit decreased due to the increase in occupancy cost, as well as the increased cost of sales discussed above.

For the wholesale segment, gross profit increased by $1.8 million, or 33.5%, from $5.4 million in 2017 to $7.2 million in 2018. Gross margin increased by 4.0%, from 22.4% to 26.4%. The increase was due to the relative proportion of related party sales to the total wholesale revenue, compared to 2017. Related party wholesale had relative lower gross profit.

Selling, General and Administrative Expenses

Selling, general, and administrative expenses was $30.7 million for the year ended March 31, 2018, compared to $26.1 million for the year ended March 31, 2017, which was mainly attributable to an increase of $1.3 million in payroll and related insurance and taxes, and an increase of $1.9 million of selling, general, and administrative expenses from the acquired entities in this year, compared to 0.3 million in 2017, an increase of $0.5 million of rental and utility expenses, an increase of $0.2 million of depreciation expense due to the increase of property and equipment, and an increase of $0.5 million of bad debt expense. The remaining $0.5 million increase was from other general expense which was due to the expansion of our wholesales business.

Net Income (loss)

Net loss was $0.8 million for the year ended March 31, 2018, a decrease of $2.0 million, or 166%, from $1.2 million of net income for the year ended March 31, 2017, mainly attributable to the increase of selling, general, and administrative expenses as described above as well as damage to inventory from Hurricane Irma.

Cash, Liquidity and Financial Position

As of March 31, 2018, the Company had cash and cash equivalents of approximately $0.6 million, compared to $2.5 million as of March 31, 2017. The Company had negative working capital of $2.6 million and $5.3 million as of March 31, 2018 and 2017, respectively.

For the fiscal year ended March 31, 2018, net cash used in operating activities was approximately $ 2.6 million. Net cash used in investing activities was $1.8 million. Net cash provided by financing activities was $2.5 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
CONSOLIDATED BALANCE SHEETS

    March 31,
2018
    March 31,
2017
 
ASSETS            
Current assets:            
Cash and cash equivalents   $ 640,915     $ 2,550,819  
Accounts receivable, net     4,903,340       2,272,011  
Inventories, net     10,905,484       9,796,984  
Prepaid expenses and other current assets     1,925,893       1,404,631  
Total current assets     18,375,632       16,024,445  
Advances to related parties     10,019,688       12,044,154  
Property and equipment, net     17,818,805       15,467,802  
Intangible assets, net     1,166,669       1,300,001  
Security deposits     1,247,106       1,091,763  
Deferred income taxes     313,832       86,799  
Total assets   $ 48,941,732     $ 46,014,964  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Current liabilities:                
Accounts payable   $ 15,561,956       12,364,071  
Deferred revenue     326,459       206,737  
Borrowings against lines of credit, current, net     1,303,753       1,144,568  
Notes payable, current     135,203       262,578  
Capital lease obligations, current     55,634       56,847  
Accrued expenses     873,949       730,392  
Taxes payable     1,606,504       1,769,398  
Other payables, current     1,172,360       4,829,113  
Total current liabilities     21,035,818       21,363,704  
Borrowings against lines of credit & term loan-non-current, net     15,740,733       12,779,838  
Notes payable, non-current     231,095       379,376  
Capital lease obligations, non-current     70,724       77,694  
Deferred rent     6,319,386       5,475,362  
Other payables, non-current     78,500       34,801  
Total liabilities     43,476,256       40,110,775  
                 
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 March 31, 2018 and March 31, 2017, respectively     1,422       1,410  
Additional paid-in capital     9,428,093       9,075,525  
Accumulated deficit     (3,964,039 )     (3,172,746 )
Total shareholders’ equity     5,465,476       5,904,189  
Total liabilities and shareholders’ equity   $ 48,941,732       46,014,964  

iFRESH INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME

    For the Year ended  
    March 31 2018     March 31 2017  
             
Net sales   $ 126,874,761     $ 121,826,207  
Net sales-related parties     9,813,766       9,050,553  
Total net sales     136,688,527       130,876,760  
Cost of sales     91,241,612       87,610,152  
Cost of sales-related parties     8,877,854       8,162,545  
Retail occupancy costs     7,575,478       7,219,860  
Gross profit     28,993,583       27,884,203  
                 
Selling, general and administrative expenses     30,738,330       26,087,868  
Income (Loss) from operations     (1,744,747 )     1,796,335  
Interest expense, net     (817,227 )     (303,894 )
Other income     1,668,496       1,360,616  
Income (Loss) before income taxes     (893,478 )     2,853,057  
Income tax provision (benefit)     (102,185 )     1,656,334  
Net income (Loss)   $ (791,293 )   $ 1,196,723  
                 
Net income (loss) per share:                
Basic   $ (0.06 )   $ 0.10  
Diluted   $ (0.06 )   $ 0.10  
Weighted average shares outstanding:                
Basic     14,141,840       12,282,325  
Diluted     14,141,840       12,282,325  

iFRESH INC AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

    For the Year Ended  
    March 31 2018     March 31 2017  
Cash flows from operating activities            
Net income (loss)   $ (791,293 )   $ 1,196,723  
Adjustments to reconcile net income (loss) to net cash provided by operating activities:                
Depreciation expense     1,729,852       1,562,043  
Amortization expense     315,832       178,957  
Share based compensation     297,536       -  
Deferred income taxes     (227,033 )     (166,221 )
Changes in operating assets and liabilities:                
Accounts receivable     (2,631,329 )     (457,478 )
Inventories     (1,108,500 )     (1,596,427 )
Prepaid expenses and other current assets     (521,262 )     (931,019 )
Security deposits     (155,344 )     (166,285 )
Accounts payable     3,197,888       1,746,949  
Deferred revenue     119,722       61,240  
Accrued expenses     143,557       (296,479 )
Taxes payable     (162,894 )     75,526  
Deferred rent     844,024       545,208  
Other liabilities     (3,613,056 )     4,171,936  
Net cash provided by (used in) operating activities     (2,562,300 )     5,924,673  
Cash flows from investing activities                
Repayment from (advances made to) related parties     2,079,511       (7,155,484 )
Acquisition of property and equipment     (3,879,602 )     (6,745,407 )
Cash proceeds from acquisition of Ecompass     -       240  
Net cash used in investing activities     (1,800,091 )     (13,900,651 )
Cash flows from financing activities                
Borrowings against Term loan     1,050,000       15,000,000  
Borrowings against lines of credit     3,200,000       200,000  
Repayments on term loan     (1,312,420 )     (3,791,794 )
Repayments on lines of credit borrowings     -       (208,719 )
Repayments on notes payable     (407,345 )     (258,254 )
Payments on capital lease obligations     (77,748 )     (55,198 )
Deferred financing cost     -       (912,500 )
Net cash used in financing activities     2,452,487       9,973,535  
Net increase (decrease) in cash and cash equivalents     (1,909,904 )     1,997,557  
Cash and cash equivalents at beginning of the year     2,550,819       553,262  
Cash and cash equivalents at the end of the year   $ 640,915     $ 2,550,819  
Supplemental disclosure of cash flow information                
Cash paid for interest   $ 763,231     $ 304,483  
Cash paid for income taxes   $ -     $ 1,747,028  
                 
Supplemental disclosure of non-cash investing and financing activities                
Capital expenditures funded by capital lease obligations and notes payable   $ 213,435     $ 345,567  

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

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Source: iFresh Inc.