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Maison Solutions Reports Full Year 2024 Financial Results

Tuesday, 13 August 2024 05:20 PM

Maison Solutions, Inc

Topic:
Earnings

MONTEREY PARK, CA / ACCESSWIRE / August 13, 2024 / 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
[email protected]

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,
2024



April 30,
2023


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

Topic:
Earnings
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