Maison Solutions Reports Full Year 2024 Financial Results
MONTEREY PARK, CA, August 13, 2024 (Newswire.com) - Maison Solutions Inc. ("Maison Solutions" or the "Company"), (NASDAQ:MSS), a U.S.-based specialty grocery retailer offering traditional Asian and international food and merchandise, today announced financial results for full year ended April 30, 2024.
Management Commentary
"Following the successful IPO last October, we have made significant strides in expanding our footprint and enhancing our operational capabilities," said John Xu, President, Chairman and Chief Executive Officer of Maison Solutions. "The accretive acquisition of Lee Lee this past April was a pivotal step in fueling our growth strategy, allowing us to extend the Maison brand beyond the California border and into the state of Arizona. The three acquired stores have seamlessly merged under the Maison umbrella and are expected to more than double our current top-line figures while maintaining their profitability. We believe this acquisition will serve as the cornerstone of our growth in the coming year, as we look forward to reaping the financial benefits while exploring synergistic opportunities between our HK Good Fortune stores in California and the Lee Lee stores."
"We also remain committed to the organic growth of our HK Good Fortune stores, specifically the renovation and digital transformation initiatives starting with our El Monte store, which is scheduled to be completed by the end of 2024. We are very confident in the outlook of our business and importantly, maximizing shareholder value."
Full Year 2024 and Recent Operational Highlights
Held a post-acquisition webinar detailing the Lee Lee International Supermarkets ("Lee Lee") acquisition
Acquired Lee Lee, a three-store supermarket chain operating in the greater Phoenix and Tucson, Arizona metro areas
Launched a Store Renovation Program that integrated a new software program and included exterior and interior upgrades to the HK Good Fortune supermarket in El Monte, California
Presented at the Emerging Growth Conference
Completed a $10 million IPO on the Nasdaq Capital Market
Full Fiscal Year 2024 Financial Results
Total net revenues for fiscal year 2024 increased 4.8% to $58.0 million compared to $55.4 million last fiscal year. The increase was primarily driven by the inclusion of revenues from the newly acquired subsidiary, Lee Lee, of $4.6 million and increased sales of Maison Monterey Park supermarket by $4.4 million.
Perishable goods revenues for fiscal year 2024 increased 0.2% to $31.4 million compared to $31.3 million last fiscal year. Non-perishable goods revenues for fiscal year 2024 increased 10.7% to $26.7 million compared to $24.1 million last fiscal year.
Total cost of revenues for fiscal year 2024 was $46.4 million compared to $42.9 million last fiscal year. The increase was primarily due to a corresponding increase in revenue, an increase in write-off inventory from the Lee Lee acquisition, and increased occupancy costs of existing supermarkets and Lee Lee.
Gross profit for fiscal year 2024 was $11.6 million, while gross margin was 20.0%. Gross profit for fiscal year 2023 was $12.5 million, while gross margin was 22.5%. The decrease was primarily due to an increase in write-off inventory from the Lee Lee acquisition, and increased occupancy costs of existing supermarkets and Lee Lee.
Net loss for fiscal year 2024 was approximately $3.3 million, compared to net income of approximately $1.3 million last fiscal year. The net loss was primarily due to a decrease in gross profit and other income, and an increase in investment loss from equity method investment, operating expenses, and income tax expense.
Fiscal Year 2025 Guidance
The Company is reiterating the following guidance for fiscal year 2025:
Revenues between $120 million and $125 million
Net income positive
About Maison Solutions Inc.
Maison Solutions Inc. is a U.S.-based specialty grocery retailer offering traditional Asian food and merchandise, particularly to members of Asian-American communities. The Company is committed to providing Asian fresh produce, meat, seafood, and other daily necessities in a manner that caters to traditional Asian-American family values and cultural norms, while also accounting for the new and faster-paced lifestyle of younger generations and the diverse makeup of the communities in which the Company operates. Since its formation in 2019, the Company has acquired equity interests in four traditional Asian supermarkets in the Los Angeles, California area, operating under the brand name HK Good Fortune, and three supermarkets in the Phoenix and Tucson, Arizona metro areas, operating under the brand name Lee Lee International Supermarket. To learn more about Maison Solutions, please visit the Company's website at www.maisonsolutionsinc.com. Follow us on LinkedIn and X.
Cautionary Note Concerning Forward-Looking Statements
This press release contains "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. We caution readers that forward-looking statements are predictions based on our current expectations about future events. These forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and assumptions that are difficult to predict. Our actual results, performance, or achievements could differ materially from those expressed or implied by the forward-looking statements as a result of a number of factors, including the risks discussed under the heading "Risk Factors" discussed under the caption "Item 1A. Risk Factors" in Part I of our most recent Annual Report on Form 10-K or any updates discussed under the caption "Item 1A. Risk Factors" in Part II of our Quarterly Reports on Form 10-Q and in our other filings with the SEC, copies of which are available on the SEC's website at www.sec.gov. Maison Solutions undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise that occur after the date of this release, except as required by law.
Investor Relations and Media Contact:
Gateway Group, Inc.
+1-949-574-3860
MSS@gateway-grp.com
MAISON SOLUTIONS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
Years Ended April 30, | ||||||||
2024 | 2023 | |||||||
Revenue | $ | 58,043,161 | $ | 55,399,112 | ||||
Cost of goods sold | 46,422,064 | 42,947,952 | ||||||
Gross profit | 11,621,097 | 12,451,160 | ||||||
Operating expenses: | ||||||||
Selling expenses | 10,155,828 | 8,479,578 | ||||||
General and administrative expenses | 4,169,275 | 3,887,935 | ||||||
Total operating expenses | 14,325,103 | 12,367,513 | ||||||
Income (loss) from operations | (2,704,006 | ) | 83,647 | |||||
Non-operating income (expenses): | ||||||||
Interest income (expense), net | (124,260 | ) | 42,606 | |||||
Investment loss from equity method investment | (538,542 | ) | ||||||
Other income, net | 420,341 | 1,849,534 | ||||||
Non-operating income (expenses), net | (242,461 | ) | 1,892,140 | |||||
Income (loss) before income tax | (2,946,467 | ) | 1,975,787 | |||||
Income tax provisions | 440,562 | 336,486 | ||||||
Net income (loss) before noncontrolling interest | (3,387,029 | ) | 1,639,301 | |||||
Net income (loss) attributable to noncontrolling interest | (46,823 | ) | 387,498 | |||||
Net income (loss) attributable to Maison Solutions Inc. | $ | (3,340,206 | ) | $ | 1,251,803 | |||
Net income (Loss) per share attributable to Maison Solutions, Inc. | ||||||||
- basic and diluted | $ | (0.19 | ) | $ | 0.08 | |||
Weighted average number of common stock outstanding - basic and diluted | 17,913,869 | 16,000,000 | ||||||
MAISON SOLUTIONS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
April 30, | April 30, | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | - | $ | 2,569,766 | ||||
Accounts receivable | 111,874 | 315,356 | ||||||
Accounts receivable - related parties | 459,647 | 289,615 | ||||||
Inventories, net | 6,802,255 | 2,978,986 | ||||||
Prepayments | 3,263,711 | 1,547,243 | ||||||
Other receivables and other current assets | 1,240,786 | 550,836 | ||||||
Other receivable - related parties | 33,995 | 33,995 | ||||||
Total current assets | 11,912,268 | 8,285,797 | ||||||
Non-current assets: | ||||||||
Restricted cash | 1,101 | 1,101 | ||||||
Property and equipment, net | 2,334,963 | 671,463 | ||||||
Intangible assets, net | 7,978,911 | 197,329 | ||||||
Security deposits | 946,208 | 457,491 | ||||||
Investment under cost method | 75,000 | - | ||||||
Investment under cost method - related parties | 203,440 | 203,440 | ||||||
Investment in equity securities | 1,261,458 | - | ||||||
Operating lease right-of-use assets, net | 40,726,647 | 22,545,190 | ||||||
Goodwill | 16,957,147 | 2,222,211 | ||||||
Total non-current assets | 70,484,875 | 26,298,225 | ||||||
Total assets | $ | 82,397,143 | $ | 34,584,022 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
Current liabilities: | ||||||||
Bank overdraft | $ | 97,445 | $ | - | ||||
Accounts payable | 5,394,423 | 3,105,592 | ||||||
Accounts payable - related parties | 470,605 | 465,310 | ||||||
Accrued expenses and other payables | 1,627,082 | 867,796 | ||||||
Other payables - related parties | 491,586 | 241,585 | ||||||
Income tax payable | 442,518 | 961,034 | ||||||
Contract liabilities | 965,696 | 449,334 | ||||||
Operating lease liabilities, current | 4,088,678 | 1,761,182 | ||||||
Loan payables, current | 65,098 | 370,828 | ||||||
Notes payable, current | 15,126,065 | 150,000 | ||||||
Total current liabilities | 28,769,196 | 8,372,661 | ||||||
Non-current liabilities: | ||||||||
Long-term loan payables | 2,496,201 | 2,561,299 | ||||||
Security deposit from sub-tenants | 125,114 | 105,637 | ||||||
Operating lease liabilities, non-current | 39,015,252 | 22,711,760 | ||||||
Deferred tax liability, net | 1,272,260 | 40,408 | ||||||
Total non-current liabilities | 42,908,827 | 25,419,104 | ||||||
Total Liabilities | 71,678,023 | 33,791,765 | ||||||
Commitment and contingencies (Note 17) | ||||||||
Stockholders' Equity: | ||||||||
Class A Common stock, $0.0001 par value, 97,000,000 shares authorized; 17,450,476 and 13,760,000 shares issued and outstanding as of April 30, 2024 and 2023, respectively | 1,745 | 1,376 | ||||||
Class B Common stock, $0.0001 par value, 3,000,000 shares authorized; 2,240,000 shares issued and outstanding | 224 | 224 | ||||||
Additional paid in capital | 13,313,523 | - | ||||||
Retained earnings (accumulated deficit) | (2,817,495 | ) | 522,710 | |||||
Total Maison Solutions, Inc. stockholders' equity | 10,497,997 | 524,310 | ||||||
Noncontrolling interests | 221,123 | 267,947 | ||||||
Total stockholders' equity | 10,719,120 | 792,257 | ||||||
Total liabilities and stockholders' equity | $ | 82,397,143 | $ | 34,584,022 | ||||
MAISON SOLUTIONS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended April 30, | ||||||||
2024 | 2023 | |||||||
Cash flows from operating activities | ||||||||
Net income (loss) before noncontrolling interest | $ | (3,387,029 | ) | $ | 1,639,301 | |||
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||||||
Depreciation and amortization expense | 461,868 | 371,696 | ||||||
Inventory impairment | (5,961 | ) | (130,056 | ) | ||||
Bad debt expense | (60,000 | ) | 225,766 | |||||
Investment loss | 538,542 | - | ||||||
Change in deferred taxes | (11,698 | ) | (3,125 | ) | ||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | 203,481 | (258,309 | ) | |||||
Accounts receivable - related parties | (271,461 | ) | 243,881 | |||||
Inventories | 914,356 | 343,513 | ||||||
Prepayments | (1,716,468 | ) | (819,592 | ) | ||||
Other receivables and other current assets | (474,943 | ) | (504,758 | ) | ||||
Security deposits | (488,717 | ) | 5,654 | |||||
Accounts payable | (59,633 | ) | (589,651 | ) | ||||
Accounts payable - related parties | 106,725 | (161,677 | ) | |||||
Accrued expenses and other payables | 342,592 | (503,338 | ) | |||||
Income tax payable | (518,516 | ) | 334,622 | |||||
Contract liabilities | 503,326 | 68,037 | ||||||
Operating lease liabilities | 400,913 | 203,940 | ||||||
Other long-term payables | 19,477 | 18,287 | ||||||
Net cash provided by (used in) operating activities | (3,503,146 | ) | 484,191 | |||||
Cash flows from investing activities | ||||||||
Payments of equipment purchase | (382,132 | ) | (49,388 | ) | ||||
Payments for intangible assets purchase | (2,950,000 | ) | - | |||||
Investment into TMA Liquor Inc. | (75,000 | ) | - | |||||
Investment into HKGF Market of Arcadia, LLC | (1,800,000 | ) | - | |||||
Payment for acquisition of subsidiaries | (7,000,000 | ) | (2,500,000 | ) | ||||
Loans repaid from third parties | - | 4,410,270 | ||||||
Net cash provided by (used in) investing activities | (12,207,132 | ) | 1,860,882 | |||||
Cash flows from financing activities | ||||||||
Bank overdraft | 97,445 | (281,941 | ) | |||||
Repayments (to) borrowings from related parties | 250,000 | (101,965 | ) | |||||
Repayments of loan payables | (370,825 | ) | (362,731 | ) | ||||
Repayment of notes payable | (150,000 | ) | - | |||||
Net proceeds from issuance of common stock | 13,313,892 | - | ||||||
Net cash provided by (used in) financing activities | 13,140,512 | (746,637 | ) | |||||
Net changes in cash and restricted cash | (2,569,766 | ) | 1,598,436 | |||||
Cash and restricted cash at the beginning of the year | 2,570,867 | 972,431 | ||||||
Cash and restricted cash at the end of the year | $ | 1,101 | $ | 2,570,867 | ||||
Supplemental disclosure of cash and restricted cash | ||||||||
Cash | $ | - | $ | 2,569,766 | ||||
Restricted cash | 1,101 | 1,101 | ||||||
Total cash and restricted cash | $ | 1,101 | $ | 2,570,867 | ||||
Supplemental disclosure of cash flow information | ||||||||
Cash paid for interest | $ | 104,451 | $ | 70,795 | ||||
Cash paid for income taxes | $ | 973,656 | $ | 8,481 | ||||
Supplemental disclosure of non-cash investing and financing activities | ||||||||
Increase of right-of-use assets and lease liabilities | $ | 10,196 | $ | 8,454,300 | ||||
SOURCE: Maison Solutions, Inc
Source: Maison Solutions, Inc
