FAIRFIELD, NJ / ACCESSWIRE / November 13, 2023 / Jerash Holdings (US), Inc. ('Jerash' or the 'Company') (NASDAQ:JRSH), which manufactures and exports custom, ready-made, sportswear and outerwear for leading global brands, today announced financial results for its fiscal year 2024 second quarter, ended September 30, 2023.

'Our second quarter performance again demonstrated Jerash's ability to attract new customers and prove our resiliency in a challenging apparel environment,' said Sam Choi, Jerash's chairman and chief executive officer. 'Retail market conditions for global brands in the U.S. and Europe have been slow to recover, which, in turn, is impacting our business compared with the prior year, with a product mix shift to lower priced items, which carry lower margins. Nevertheless, our revenue and gross margin remained largely stable.

'Good progress was made during the quarter with our Busana partner. Thus far, five premium customers have committed to placing orders. Current projections from the joint venture over the next twelve months call for about $8 to $9 million in new orders, starting in a meaningful way in our fiscal fourth quarter.

'Additionally, Jerash's initiative to diversify its own customer base is proving effective. We are continuing to receive inquiries from high-profile global brands, with new garment sampling and costing underway.

We also are enthusiastic about the opportunity created by our recently established joint venture with Newtech Textile (HK) Limited, a subsidiary of Newtech Textile Technology Development (Shanghai) Co. Limited, a textile innovation and solutions company. We are aiming to utilize technology that is expected to reduce water usage by approximately 90%, energy consumption by approximately 65%, and carbon footprint by over 50% in comparison with traditional textile dyeing processes. To achieve this, we plan to build a fabric facility in Jordan, with construction to begin in 2024, and Jerash is emerging as Jordan's leader in ESG textile manufacturing, which is in keeping with our longstanding commitment to sustainability and responsible growth,' Choi added.

Fiscal Year 2024 Second Quarter Results

Revenue for the fiscal year 2024 second quarter was $33.4 million, compared with $37.8 million in the same quarter last year. The decrease was primarily due to fewer shipments being delivered to some of the major customers in the U.S., partially offset by shipments to other new geographic locations, including Hong Kong and Germany.

Gross profit for the fiscal year 2024 second quarter was $5.4 million, compared with $6.9 million in the same quarter last year. Gross margin was 16.1 percent in the fiscal year 2024 second quarter, compared with 18.3 percent in the same quarter last year. The decrease in gross margin was primarily driven by a shift in customer mix with lower profit margin orders.

Operating expenses totaled $4.5 million in the fiscal year 2024 second quarter, compared with $4.3 million in the same quarter last year. Selling, general and administrative expenses were $4.2 million in the fiscal year 2024 second quarter, slightly lower than the same quarter last year. Stock-based compensation expenses for the fiscal year 2024 second quarter were $243,000, compared with none in the same quarter last year.

Operating income totaled $888,000 in the fiscal year 2024 second quarter, versus $2.6 million in the same quarter last year.

Total other expenses were $167,000 in the fiscal year 2024 second quarter, compared with $106,000 in the same quarter last year. The increase was primarily due to higher interest expenses arisen from participating in supply chain financing programs of certain customers, partially offset by income from fixed deposits in banks.

Net income was $369,000 in the fiscal year 2024 second quarter, or $0.03 per diluted share, versus $1.8 million, or $0.14 per diluted share, in the same quarter last year.

Comprehensive income attributable to Jerash's common stockholders totaled $306,000 in the fiscal year 2024 second quarter, which included a foreign currency translation loss of $60,000, compared with $1.6 million in the same quarter last year, which included a foreign currency translation loss of $216,000.

Balance Sheet, Cash Flow and Dividends

Cash totaled $21.2 million, and net working capital was $40.5 million as of September 30, 2023.

On November 3, 2023, Jerash approved a regular quarterly dividend of $0.05 per share on its common stock, payable on November 28, 2023, to stockholders of record as of November 14, 2023.

Six-Month Fiscal Year 2024 Results

Revenue for the first six months of fiscal year 2024 was $68.1 million, compared with $71.3 million in the same period last year.

Gross profit was $10.9 million for the first six months of fiscal year 2024, compared with $13.5 million for the same period last year. Gross margin for the first six months of fiscal year 2024 was 16.1 percent, compared with 19.0 percent in the same period last year.

Operating expenses for the first six months of fiscal year 2024 were $9.0 million, compared with $8.6 million for the same period last year. Operating income was $2.0 million for the first six months of fiscal year 2024, compared with $4.9 million for the same period last year.

Net income for the first six months of fiscal year 2024 was $864,000, or $0.07 per diluted share, compared with $3.5 million, or $0.28 per diluted share, in the same period last year.

Comprehensive income attributable to Jerash's common stockholders was $710,000 in the first six months of fiscal year 2024, which included a foreign currency translation loss of $155,000, compared with $3.2 million in the same period last year, which included a foreign currency translation loss of $334,000.

Middle East Situation

Since the inception of the turmoil in the Middle East, Jerash has been closely monitoring the situation and keeping its customers informed. Currently, production is ongoing as usual, with no changes to customer orders or commitments, and both ports that the Company uses for import and export, in Aqaba and Haifa, are operating normally. However, in the event of any potential impact on the ports, Jerash has prepared a contingency plan, approved by its major customers, to temporarily relocate production to alternate regions.

Outlook

• Revenue for the full fiscal year 2024 is expected to be down approximately 3 to 5 percent from last fiscal year, reflecting product mix shift to lower priced items.
• Gross margin goal for the full fiscal year 2024 is expected to be approximately 15 to 16 percent.

Conference Call

Jerash will host an investor conference call to discuss its fiscal year 2024 second quarter results today, November 13, 2023, at 9:00 a.m. Eastern Time.

Phone: 877-545-0523 (domestic); 973-528-0016 (international)

Conference ID: 272995

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 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. 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
[email protected]

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SOURCE: Jerash Holdings (US), Inc.