Sat, 31 Jul 2021

FAIRFIELD, NJ / ACCESSWIRE / June 22, 2021 / Jerash Holdings (US), Inc. (NASDAQ:JRSH), a producer of high-quality textile goods for leading global brands, today announced financial results for its fiscal 2021 fourth quarter and full year, ended March 31, 2021.

Fourth Quarter Highlights - Fiscal 2021 Versus Fiscal 2020

  • Revenue of $23.8 million, an increase of 65 percent, reflecting higher shipments and the addition of new customers
  • Gross profit of $4.7 million, an increase of 271 percent, due to higher revenue and gross margin
  • Gross margin of 19.6 percent, reflecting improved product mix
  • Net income of $680,000 vs. a net loss of $742,000
  • Comprehensive income attributable to Jerash Holdings (US), Inc. common stockholders of $656,000, or $0.06 per share, vs. a loss of $740,000, or $0.07 per share

Full Year Highlights - Fiscal 2021 Versus Fiscal 2020

  • Revenue of $90.2 million, a decrease of 3 percent, primarily due to pandemic-related effects earlier in the fiscal year
  • Gross profit of $16.0 million, a decrease of 11 percent, also primarily due to the pandemic
  • Gross margin of 17.7 percent, impacted by higher proportion of local orders at lower margins and effects of the pandemic
  • Net income of $4.1 million vs. $6.5 million
  • Comprehensive income attributable to Jerash Holdings (US), Inc. common stockholders of $4.1 million, or $0.37 per share, vs. $6.5 million or $0.57 per share
  • Ended fiscal 2021 with cash of $21.1 million and net working capital of $50.1 million

Fiscal 2022 Outlook

  • Fiscal 2022 revenue expected to be in the range of $100 million to $102 million
  • Fiscal 2022 first three quarters revenue expected to be at or near record levels

Sam Choi, chairman and chief executive officer, said, 'Our fourth quarter results represent a strong recovery in a U.S. economy that is emerging from challenges related to the COVID-19 pandemic. Revenue and gross margin were ahead of expectations, reflecting robust shipments and improved product mix. Order momentum has continued thus far into fiscal 2022.

'We continue to anticipate that fiscal 2022 will reflect more typical customer patterns, with record revenue for the year, based on current ordering patterns. Our factories are fully booked until January 2022, with orders from our existing top global brand-name customers alone. Demand continues to indicate that we could produce revenue at or near record levels for the first three quarters of fiscal 2022.'

Choi added, 'Investments we made to expand capacity benefited fiscal 2021, enabling us to add new customers and product lines. We are actively seeking to secure new facilities through a combination of construction, leasing and acquisition strategies. As previously announced, we anticipate starting construction of an additional facility on a 133,000 square-foot parcel that we purchased in 2019, with two-thirds of the land allocated for our fifth manufacturing plant and one-third for housing.

Fiscal 2021 Fourth Quarter Results

Fiscal 2021 fourth quarter revenue rose 64.5 percent to $23.8 million from $14.4 million in the same period last year, primarily due to higher shipments and pandemic-related effects in the prior year period. As previously announced, shipment of several orders in the fiscal 2021 third quarter was delayed into the fourth quarter due to a shift in customer timing related to the COVID-19 pandemic. In addition, the pandemic led to a cessation of shipments late in the fourth quarter of last year, which reduced revenue in the period.

Gross profit increased significantly to $4.7 million in the fiscal 2021 fourth quarter, from $1.3 million in the same period last year, reflecting higher revenue and gross margin. Gross margin expanded to 19.6 percent in the fiscal 2021 fourth quarter, from 8.7 percent in the same period last year, reflecting an improved product mix.

Operating expenses totaled $3.5 million in the fiscal 2021 fourth quarter, versus $2.0 million in the same period last year. The increase was primarily due to higher headcount to support the company's growth, repair and maintenance work on facilities and dormitory to prepare for expansion, increased logistics costs that stemmed from the pandemic, and a special company-wide bonus to reward employees for their extra efforts during the pandemic.

Operating income totaled $1.1 million in the fiscal 2021 fourth quarter, versus an operating loss of $735,000 in the same period last year. Net income advanced to $680,000 in the fiscal 2021 fourth quarter, versus a net loss of $742,000 in the same period last year. Comprehensive income attributable to Jerash Holdings (US), Inc's common stockholders totaled $656,000, or $0.06 per share, in the fiscal 2021 fourth quarter, versus a loss of $740,000, or $0.07 per share, in the same period last year.

Gilbert Lee, chief financial officer, said, 'Fiscal 2021 fourth quarter revenue and gross margin came in ahead of our guidance, a reflection of strong order momentum and an improving mix of products. Our factories are fully booked through January 2022, and orders continue to reflect increased diversification from new customers secured over the last two years. Order mix for pre-bookings in the June and September quarters remains heavily weighted to global brand-name outerwear products, which generate higher average selling prices and favorable gross margin mix.'

Fiscal 2021 Full Year Results

Fiscal 2021 revenue totaled $90.2 million, compared with $93.0 million in fiscal 2020. The decline was primarily due to a loss in productivity in the resumption of manufacturing in April 2020 after the pandemic-driven national lockdown in Jordan, a restriction in overtime work and strengthened hygienic precautions.

Gross profit in fiscal 2021 totaled $16.0 million, a decrease of 11.0 percent compared with $18.0 million in fiscal 2020, primarily reflecting lower revenue and a decline in gross margin. Gross margin was 17.7 percent in fiscal 2021 compared with 19.3 percent in fiscal 2020. The lower gross margin in fiscal 2021 was primarily due to a higher proportion of local orders that typically carry lower gross margins, and the loss in productivity in April 2020 during the gradual resumption in production after the national lockdown in Jordan.

Operating expenses in fiscal 2021 were $10.6 million, compared with $10.3 million in fiscal 2020.The increase was primarily due to higher expenses for pandemic precaution and an increase in headcount to support sales growth in the second half of fiscal 2021.

Operating income was $5.4 million in fiscal 2021, compared with $7.7 million in fiscal 2020. Net income was $4.1 million in fiscal 2021, compared with $6.5 million in fiscal 2020. Comprehensive income attributable to Jerash Holdings (US), Inc's common stockholders in fiscal 2021 was $4.1 million, or $0.37 per share, compared with $6.5 million, or $0.57 per share, in fiscal 2020.

Balance Sheet, Cash Flow and Dividends

Cash and restricted assets totaled $22.9 million, and net working capital was $50.1 million at March 31, 2021.

Jerash paid a regular quarterly dividend of $0.05 per share on its common stock on June 2, 2021, to stockholders of record as of May 25, 2021.

Conference Call

Jerash Holdings will host an investor conference call to discuss its fiscal 2021 fourth quarter and full year results today, June 22, 2021, at 9:00 a.m. Eastern Time.

Phone: 877-407-9210 (domestic); 201-689-8049 (international)

Conference ID:13720440

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, sports 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, JanSport). Jerash's existing production facilities comprise four factory units, one workshop, and four warehouses, and Jerash currently employs approximately 4,300 people. The total annual capacity at its facilities was approximately 12.0 million pieces as of March 31, 2021. 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 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

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(tables below)

JERASH HOLDINGS (US), INC., SUBSIDIARIES AND AFFILIATE
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE- AND TWELVE-MONTHS ENDED MARCH 31, 2021 AND 2020

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

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

SOURCE: Jerash Holdings



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