Chanson International Holding Announces First Half of Fiscal Year 2024 Financial Results
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URUMQI, China, Sept. 28, 2024 /PRNewswire/ -- Chanson International Holding (Nasdaq: CHSN) (the "Company" or "Chanson"), a provider of bakery, seasonal, and beverage products through its chain stores in China and the United States, today announced its unaudited financial results for the six months ended June 30, 2024.
Mr. Gang Li, Chairman of the Board of Directors and Chief Executive Officer of the Company, commented, "In the first half of fiscal year 2024, despite facing various challenges, we have shown resilience and adaptability in a dynamic market. While we experienced a slight decline in revenue, we have successfully maintained our gross margins at above 40%, by enforcing cost control measures and enhancing operating efficiency. Additionally, with an increased cash reserve as of June 30, 2024, we are in a solid position to manage market uncertainties. As we move forward, we remain confident in our long-term growth strategy and execution capabilities. Our expansion initiatives in both the United States and China are expected to remain a key focus of our growth. We aim to drive revenue by attracting new customers and encouraging repeat business from existing ones. Specifically, this is expected to be achieved by strengthening opportunistic purchasing, optimizing inventory management, maintaining strong store conditions, and effectively marketing both current and new product offerings. We believe that with all those efforts in place, we will navigate short-term headwinds and return to long-term growth in the near future."
First Half of Fiscal Year 2024 Financial Summary
First Half of Fiscal Year 2024 Financial Results
Revenue
Total revenue was $7.5 million for the six months ended June 30, 2024, which decreased by 14.4%, from $8.8 million for the same period of last year. The decrease in revenue was due to decreased revenue from both the stores in China (the "China Stores") and the stores in the United States (the "United States Stores").
China Stores
United States Stores
Gross Profit and Gross Margin
Gross profit was $3.1 million for the six months ended June 30, 2024, which decreased by 27.8% from $4.3 million for the same period of last year. Gross margin was 41.5% for the six months ended June 30, 2024, which decreased by 7.7% points from 49.2% for the same period of last year.
Operating Expenses
Operating expenses were $3.7 million for the six months ended June 30, 2024, compared to $4.2 million for the same period of last year.
Net Income
Net income was $0.02 million for the six months ended June 30, 2024, compared to $0.28 million for the same period of last year.
Basic and Diluted Earnings per Share
Basic and diluted earnings per share were $0.002 for the six months ended June 30, 2024, compared to $0.027 for the same period of last year.
Balance Sheet
As of June 30, 2024, the Company had cash of $4.1 million, compared to $1.5 million as of December 31, 2023.
Cash Flow
Net cash provided by operating activities was $0.8 million for the six months ended June 30, 2024, compared to $0.6 million for the same period of last year.
Net cash provided by investing activities was $1.4 million for the six months ended June 30, 2024, compared to net cash used in $11.3 million for the same period of last year.
Net cash provided by financing activities was $0.4 million for the six months ended June 30, 2024, compared to $9.7 million for the same period of last year.
About Chanson International Holding
Founded in 2009, Chanson International Holding is a provider of bakery, seasonal, and beverage products through its chain stores in China and the United States. Headquartered in Urumqi, China, Chanson directly operates stores in Xinjiang, China and New York, United States. Chanson currently manages 46 stores in China, and three stores in New York City while selling on digital platforms and third-party online food ordering platforms. Chanson offers not only packaged bakery products but also made-in-store pastries and eat-in services, serving freshly prepared bakery products and extensive beverage products. Chanson aims to make healthy, nutritious, and ready-to-eat food through advanced facilities based on in-depth industry research, while creating a comfortable and distinguishable store environment for customers. Chanson's dedicated and highly-experienced product development teams constantly create new products that reflect market trends to meet customer demand. For more information, please visit the Company's website: http://ir.chanson-international.net/.
Forward-Looking Statements
Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as "approximates," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the U.S. Securities and Exchange Commission.
For investor and media inquiries, please contact:
Chanson International Holding
Investor Relations Department
Email: IR@chansoninternational.com
Ascent Investor Relations LLC
Tina Xiao
Phone: +1-646-932-7242
Email: investors@ascent-ir.com
CHANSON INTERNATIONAL HOLDING AND SUBSIDIARIES | ||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
June 30, | December 31, | |||||||
2024 | 2023 (Audited) | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 4,107,830 | $ | 1,481,302 | ||||
Accounts receivable | 2,022,587 | 1,995,067 | ||||||
Inventories | 785,327 | 723,905 | ||||||
Long term loan to a third-party, current | 1,999,507 | - | ||||||
Prepaid expenses and other current assets | 4,287,721 | 5,134,173 | ||||||
13,202,972 | 9,334,447 | |||||||
NON-CURRENT ASSETS: | ||||||||
Operating lease right-of-use assets | 12,922,888 | 13,059,561 | ||||||
Property and equipment, net | 5,006,112 | 5,462,063 | ||||||
Intangible assets, net | 140,625 | 150,000 | ||||||
Long term security deposits | 843,793 | 894,715 | ||||||
Prepayment for the software, equipment and product development | 140,000 | 790,000 | ||||||
Long term debt investment | 6,359,014 | 6,534,575 | ||||||
Long term loan to a third-party | - | 2,066,822 | ||||||
Long term prepaid expenses | 108,313 | 142,113 | ||||||
25,520,745 | 29,099,849 | |||||||
TOTAL ASSETS | $ | 38,723,717 | $ | 38,434,296 | ||||
LIABILITIES | ||||||||
CURRENT LIABILITIES: | ||||||||
Short-term bank loans | $ | 3,086,939 | $ | 2,683,692 | ||||
Accounts payable | 2,120,980 | 1,919,189 | ||||||
Due to a related party | 46,675 | 48,042 | ||||||
Taxes payable | 77,015 | 96,176 | ||||||
Deferred revenue | 7,338,357 | 7,085,696 | ||||||
Operating lease liabilities, current | 2,448,062 | 2,198,192 | ||||||
Other current liabilities | 620,251 | 697,702 | ||||||
15,738,279 | 14,728,689 | |||||||
NON-CURRENT LIABILITIES | ||||||||
Operating lease liabilities, non-current | 10,931,463 | 11,691,251 | ||||||
10,931,463 | 11,691,251 | |||||||
TOTAL LIABILITIES | 26,669,742 | 26,419,940 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS' EQUITY | ||||||||
Ordinary shares, $0.001 par value, 50,000,000 shares authorized; 12,425,319 shares | ||||||||
Class A ordinary share, $0.001 par value, 44,000,000 shares authorized; 6,755,319 | 6,755 | 6,485 | ||||||
Class B ordinary share, $0.001 par value, 6,000,000 shares authorized; 5,670,000 and | 5,670 | 5,940 | ||||||
Additional paid-in capital | 11,800,472 | 11,800,472 | ||||||
Statutory reserve | 447,231 | 447,231 | ||||||
Accumulated deficit | (126,842) | (150,254) | ||||||
Accumulated other comprehensive loss | (79,311) | (95,518) | ||||||
TOTAL SHAREHOLDERS' EQUITY | 12,053,975 | 12,014,356 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 38,723,717 | $ | 38,434,296 |
CHANSON INTERNATIONAL HOLDING AND SUBSIDIARIES | ||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND | ||||||||
COMPREHENSIVE INCOME (LOSS) | ||||||||
For the Six Months Ended | ||||||||
2024 | 2023 | |||||||
REVENUE | $ | 7,542,682 | $ | 8,811,287 | ||||
COST OF REVENUE | 4,415,407 | 4,478,716 | ||||||
GROSS PROFIT | 3,127,275 | 4,332,571 | ||||||
OPERATING EXPENSES | ||||||||
Selling expenses | 2,230,905 | 2,444,292 | ||||||
General and administrative expenses | 1,456,499 | 1,774,419 | ||||||
Total operating expenses | 3,687,404 | 4,218,711 | ||||||
(LOSS) INCOME FROM OPERATIONS | (560,129) | 113,860 | ||||||
OTHER INCOME (EXPENSE) | ||||||||
Interest (expense) income, net | (25,278) | 14,007 | ||||||
Other income (loss), net | 314,670 | (11,843) | ||||||
Interest income from long term debt investment | 359,014 | 171,616 | ||||||
Total other income, net | 648,406 | 173,780 | ||||||
PROFIT BEFORE INCOME TAX EXPENSE | 88,277 | 287,640 | ||||||
INCOME TAX EXPENSE | (64,865) | (2,880) | ||||||
NET INCOME | 23,412 | 284,760 | ||||||
Foreign currency translation gain (loss) | 16,207 | (305,867) | ||||||
TOTAL COMPREHENSIVE INCOME (LOSS) | $ | 39,619 | $ | (21,107) | ||||
Earnings per ordinary share - basic and diluted | $ | 0.002 | $ | 0.027 | ||||
Weighted average shares - basic and diluted | 12,425,319 | 10,666,906 |
CHANSON INTERNATIONAL HOLDING AND SUBSIDIARIES | ||||||||
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
For the Six Months Ended | ||||||||
2024 | 2023 | |||||||
Cash flows from operating activities: | ||||||||
Net income | $ | 23,412 | $ | 284,760 | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Amortization of operating lease right-of-use assets | 1,697,141 | 1,422,155 | ||||||
Depreciation | 445,787 | 402,784 | ||||||
Impairment loss on property and equipment | - | 5,434 | ||||||
Accrued interest income from long term debt investment | (359,014) | (171,616) | ||||||
Interest income from loan to a third-party | (44,877) | (21,452) | ||||||
Changes in operating assets and liabilities: | ||||||||
Accounts receivable | (40,507) | (772,933) | ||||||
Inventories | (65,027) | 88,841 | ||||||
Prepaid expenses and other current assets | 286,121 | 73,944 | ||||||
Long term security deposits | 49,350 | (17,375) | ||||||
Long term prepaid expenses | 32,953 | 21,534 | ||||||
Accounts payable | 213,875 | 216,032 | ||||||
Taxes payable | (19,020) | (109,830) | ||||||
Deferred revenue | 299,816 | 522,418 | ||||||
Other current liabilities | (79,738) | 35,633 | ||||||
Operating lease liabilities | (1,634,128) | (1,370,175) | ||||||
Net cash provided by operating activities | 806,144 | 610,154 | ||||||
Cash flows from investing activities: | ||||||||
Purchase of property and equipment | (34,268) | (152,022) | ||||||
Proceeds from disposal of property and equipment | 34,562 | - | ||||||
Payment made for long term debt investment | - | (6,000,000) | ||||||
Interest income received from long term debt investment | 534,575 | - | ||||||
Advance of loans to third parties | - | (3,900,000) | ||||||
Repayment from loans to third parties | 862,088 | - | ||||||
Prepayment for the software, equipment and product development | - | (1,200,000) | ||||||
Net cash provided by (used in) investing activities | 1,396,957 | (11,252,022) | ||||||
Cash flows from financing activities: | ||||||||
Gross proceeds from initial public offerings | - | 13,560,000 | ||||||
Direct costs disbursed from initial public offerings proceeds | - | (1,529,631) | ||||||
Proceeds from short-term bank loans | 422,095 | - | ||||||
Payments made to a related party | (56,298) | (1,612,215) | ||||||
Payments made for deferred offering costs | - | (312,125) | ||||||
Prepayment for the related service after listing | - | (450,000) | ||||||
Net cash provided by financing activities | 365,797 | 9,656,029 | ||||||
Effect of exchange rate fluctuation on cash and cash equivalents | 57,630 | (457,647) | ||||||
Net increase (decrease) in cash and cash equivalents | 2,626,528 | (1,443,486) | ||||||
Cash and cash equivalents, beginning of period | 1,481,302 | 2,915,470 | ||||||
Cash and cash equivalents, end of period | $ | 4,107,830 | $ | 1,471,984 | ||||
Supplemental cash flow information | ||||||||
Cash paid for income taxes | $ | 40,889 | $ | 9,436 | ||||
Cash paid for interest | $ | 68,450 | $ | 8,364 | ||||
Non-cash operating, investing and financing activities | ||||||||
Reduction of right-of-use assets and operating lease obligations due to early termination | $ | 60,277 | $ | - | ||||
Right of use assets obtained in exchange for operating lease liabilities | $ | 1,697,141 | $ | 1,103,383 | ||||
Deferred IPO cost offset with additional paid-in capital | $ | - | $ | 1,059,521 |