Chanson International Holding Announces Fiscal Year 2023 Financial Results
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Fiscal Year 2023 Financial Highlights
- Total revenue was
$17.3 million , an increase of 30.0% from$13.3 million in fiscal year 2022. - Gross profit was
$8.1 million , an increase of 33.5% from$6.1 million in fiscal year 2022. - Gross margin was 47.2%, increased from 46.0% in fiscal year 2022.
- Net income was
$0.03 million , compared to net loss of$1.3 million in fiscal year 2022. - Basic and diluted earnings per share were
$0.003 , compared to basic and diluted loss per share of$0.14 in fiscal year 2022.
Fiscal Year 2023 Financial Results
Revenue
Total revenue increased by 30.0% to
China Stores
- Revenue from China Stores increased by 50.8% to
$14.3 million in fiscal year 2023 from$9.5 million in fiscal year 2022. The increase was mainly due to the increased revenue from bakery products as well as from other products. - Revenue from bakery products increased by 44.0% to
$12.5 million in fiscal year 2023 from$8.7 million in fiscal year 2022. The increase was mainly because business operations of the China Stores fully recovered from the COVID-19 pandemic during the year endedDecember 31, 2023 . - Revenue from other products increased by 126.7% to
$1.8 million in fiscal year 2023 from$0.8 million in fiscal year 2022, due to increased revenue from seasonal products and beverage products. Revenue from seasonal products increased by 89.1% to$1.3 million in fiscal year 2023, from$0.7 million in fiscal year 2022, mainly due to increased customer orders of seasonal products. As China Stores upgraded packaging for seasonal products, seasonal products were more appealing to customers. Revenue from beverage products significantly increased by 400.4% to$0.5 million in fiscal year 2023, from$0.1 million in fiscal year 2022, mainly due to increased revenue from freshly brewed coffee products, as China Stores are focusing on expanding the coffee beverages business.
United States Stores
- Revenue from United States Stores decreased by 22.3% to
$2.9 million in fiscal year 2023 from$3.8 million in fiscal year 2022. The decrease was mainly due to decreased revenue from beverage products, bakery products, and eat-in services. - Revenue from bakery products decreased by 27.4% to
$0.4 million in fiscal year 2023 from$0.6 million in fiscal year 2022. The decrease was primarily due to increased competition from rivals operating in the same area. After the COVID-19 pandemic, many famous bakery brands opened new stores inNew York City , offering customers more choices and resulting in revenue from bakery products of Chanson 23rd Street LLC ("Chanson 23rd Street ") and Chanson 355 Greenwich LLC ("Chanson Greenwich") being adversely affected. With the increased competition, Chanson Greenwich closed its business operation and in the second half of fiscal year 2023, which resulted in a decrease in revenue from bakery products. The decrease was partially offset by increased revenue from bakery products of approximately$140,000 , generated by Chanson 1293 3rd Ave LLC ("Chanson 3rd Ave ") and Chanson 2040 Broadway LLC ("ChansonBroadway "), the new stores opened inMarch 2023 andJuly 2023 , respectively. - Revenue from beverage products decreased by 16.9% to
$1.7 million in fiscal year 2023, from$2.0 million in fiscal year 2022. After the cocktail bars of the United States Stores launched several new types of cocktail products with new flavors and styles, such products became popular among customers and the cocktail bars were often fully booked by reservation. However, during the year endedDecember 31, 2023 , our rivals operating in the same area also launched many types of attractive cocktail products, offering customers more choices and resulting in revenue from beverage products being adversely affected. In addition, the decrease in revenue from beverage products was attributable to the closure of Chanson Greenwich as mentioned above. - Revenue from eat-in services decreased by 29.3% to
$0.8 million in fiscal year 2023, from$1.1 million in fiscal year 2022. The decrease was mainly due to the decreased revenue from Chanson Greenwich of approximately$345,000 as a result of the closure of its business as mentioned above. The decrease in revenue from eat-in services was partially offset by the increased revenue from eat-in services of approximately$41,000 , generated by the two newly opened stores,Chanson 3rd Ave and ChansonBroadway .
Gross Profit and Gross Margin
Gross profit increased by 33.5%, to
Operating Expenses
Operating expenses were
- Selling expenses increased by 32.0%, to
$4.9 million in fiscal year 2023, from$3.7 million in fiscal year 2022. The increase was primarily due to the increase in selling expenses of$1.3 million from China Stores, partially offset by the decrease of$0.15 million from the United States Stores. The increase in selling expenses from China Stores was mainly because the business operations inChina fully recovered from the negative impact of the COVID-19 pandemic. The increase was also due to the opening of new China Stores in the year endedDecember 31, 2023 . The decrease in selling expenses from the United States Stores was mainly attributable to the increased lease concession of$0.13 million received byChanson 23rd Street and Chanson Greenwich in the year endedDecember 31, 2023 . - General and administrative expenses increased by 0.8%, to
$3.9 million in fiscal year 2023 from$3.8 million in fiscal year 2022. The increase was primarily due to the increase in general and administrative expenses of$0.4 million incurred by China Stores. The increase in general and administrative expenses from China Stores was primarily because the business operations inChina fully recovered from the negative impact of COVID-19 pandemic. The increase was also due to the increased salaries related costs, as more employees were hired for the newly opened stores. The increase was also attributable to the increased consulting and professional service fee as we became a public company upon the completion of initial public offering in the year endedDecember 31, 2023 . The increase was partially offset by the decreased general and administrative expenses of$0.3 million incurred by the United States Stores. The decrease in general and administrative expenses from the United States Stores was primarily due to decreased salary and social security expenses, mainly resulting from optimization of management team of the United States Stores. In addition, the decrease was due to the decreased general and administrative expenses incurred by Chanson Greenwich, as Chanson Greenwich was closed in the second half of fiscal year 2023.
Net Income (Loss)
Net income in fiscal year 2023 was
Basic and Diluted Earnings (Loss) per Share
Basic and diluted earnings per share in fiscal year 2023 was
Balance Sheet
As of
Cash Flow
Net cash used in operating activities was
Net cash used in investing activities was
Net cash provided by financing activities was
About Chanson International Holding
Founded in 2009, Chanson International Holding is a provider of bakery, seasonal, and beverage products through its chain stores in
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 identify these forward-looking statements by words or phrases 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: [email protected]
Ascent Investors Relations LLC
Phone: +1-646-932-7242
Email: [email protected]
CHANSON INTERNATIONAL HOLDING AND SUBSIDIARIES | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
2023 | 2022 | |||||||
ASSETS | ||||||||
CURRENT ASSETS: | ||||||||
Cash and cash equivalents | $ | 1,481,302 | $ | 2,915,470 | ||||
Accounts receivable | 1,995,067 | 1,260,453 | ||||||
Inventories | 723,905 | 693,506 | ||||||
Deferred offering costs | - | 763,611 | ||||||
Prepaid expenses and other current assets | 5,134,173 | 833,238 | ||||||
9,334,447 | 6,466,278 | |||||||
NON-CURRENT ASSETS: | ||||||||
Operating lease right-of-use assets | 13,059,561 | 13,921,825 | ||||||
Property and equipment, net | 5,462,063 | 5,871,775 | ||||||
Intangible assets, net | 150,000 | - | ||||||
Long term security deposits | 894,715 | 958,320 | ||||||
Prepayment for the software, equipment and product development | 790,000 | - | ||||||
Long term debt investment | 6,534,575 | - | ||||||
Long term loan to a third-party | 2,066,822 | - | ||||||
Long term prepaid expenses | 142,113 | 110,988 | ||||||
29,099,849 | 20,862,908 | |||||||
TOTAL ASSETS | $ | 38,434,296 | $ | 27,329,186 | ||||
LIABILITIES | ||||||||
CURRENT LIABILITIES: | ||||||||
Short-term bank loans | $ | 2,683,692 | $ | 434,959 | ||||
Accounts payable | 1,919,189 | 1,424,766 | ||||||
Due to a related party | 48,042 | 1,798,605 | ||||||
Taxes payable | 96,176 | 130,727 | ||||||
Deferred revenue | 7,085,696 | 6,958,160 | ||||||
Operating lease liabilities, current | 2,198,192 | 1,770,398 | ||||||
Other current liabilities | 697,702 | 1,014,452 | ||||||
14,728,689 | 13,532,067 | |||||||
NON-CURRENT LIABILITIES | ||||||||
Operating lease liabilities, non-current | 11,691,251 | 12,620,070 | ||||||
11,691,251 | 12,620,070 | |||||||
TOTAL LIABILITIES | 26,419,940 | 26,152,137 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
SHAREHOLDERS' EQUITY | ||||||||
Ordinary shares, | ||||||||
Class A ordinary share, | 6,485 | 3,060 | ||||||
Class B ordinary share, | 5,940 | 5,940 | ||||||
Additional paid-in capital | 11,800,472 | 869,400 | ||||||
Statutory reserve | 447,231 | 447,231 | ||||||
Accumulated deficit | (150,254) | (183,842) | ||||||
Accumulated other comprehensive (loss) income | (95,518) | 35,260 | ||||||
TOTAL SHAREHOLDERS' EQUITY | 12,014,356 | 1,177,049 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 38,434,296 | $ | 27,329,186 | ||||
CHANSON INTERNATIONAL HOLDING AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) | ||||||||||||
For the Years Ended | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
REVENUE | $ | 17,252,662 | $ | 13,272,075 | $ | 14,690,295 | ||||||
COST OF REVENUE | 9,105,337 | 7,169,404 | 7,759,872 | |||||||||
GROSS PROFIT | 8,147,325 | 6,102,671 | 6,930,423 | |||||||||
OPERATING EXPENSES | ||||||||||||
Selling expenses | 4,882,958 | 3,697,909 | 4,126,126 | |||||||||
General and administrative expenses | 3,874,868 | 3,842,787 | 3,249,181 | |||||||||
Total operating expenses | 8,757,826 | 7,540,696 | 7,375,307 | |||||||||
LOSS FROM OPERATIONS | (610,501) | (1,438,025) | (444,884) | |||||||||
OTHER INCOME (EXPENSE) | ||||||||||||
Interest income (expense), net | 35,505 | (35,457) | (98,033) | |||||||||
Other income, net | 193,425 | 194,824 | 1,065,963 | |||||||||
Interest income from long term debt investment | 534,575 | - | - | |||||||||
Total other income, net | 763,505 | 159,367 | 967,930 | |||||||||
INCOME (LOSS) BEFORE INCOME TAX EXPENSE | 153,004 | (1,278,658) | 523,046 | |||||||||
INCOME TAX EXPENSE | (119,416) | (9,547) | (16,277) | |||||||||
NET INCOME (LOSS) | 33,588 | (1,288,205) | 506,769 | |||||||||
Foreign currency translation (loss) income | (130,778) | (369,705) | 88,952 | |||||||||
TOTAL COMPREHENSIVE INCOME (LOSS) | $ | (97,190) | $ | (1,657,910) | $ | 595,721 | ||||||
Earnings (Loss) per ordinary share - basic and diluted | $ | 0.003 | $ | (0.14) | $ | 0.06 | ||||||
Weighted average shares - basic and diluted | 11,537,373 | 9,000,000 | 9,000,000 | |||||||||
CHANSON INTERNATIONAL HOLDING AND SUBSIDIARIES | ||||||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||||||
For the Years Ended | ||||||||||||
2023 | 2022 | 2021 | ||||||||||
Cash flows from operating activities: | ||||||||||||
Net income (loss) | $ | 33,588 | $ | (1,288,205) | $ | 506,769 | ||||||
Adjustments to reconcile net income to net cash (used in) | ||||||||||||
Amortization of operating lease right-of-use assets | 2,628,985 | 2,533,074 | 2,226,128 | |||||||||
Depreciation | 831,820 | 701,461 | 605,253 | |||||||||
Gain on forgiveness of loan under Paycheck Protection Program | - | - | (502,298) | |||||||||
Loss on disposal of property and equipment | 4,982 | - | 27,325 | |||||||||
Impairment loss on property and equipment | 272,350 | - | - | |||||||||
Interest income from long term debt investment | (534,575) | - | - | |||||||||
Interest income from loan to a third-party | (66,822) | - | - | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | (766,760) | (215,847) | (397,872) | |||||||||
Inventories | (45,821) | (206,264) | (46,384) | |||||||||
Prepaid expenses and other current assets | (3,573,002) | (430,717) | (175,630) | |||||||||
Long term security deposits | 57,185 | 84,374 | (236,020) | |||||||||
Long term prepaid expenses | (34,010) | (26,504) | 38,476 | |||||||||
Accounts payable | 530,195 | 247,015 | 325,803 | |||||||||
Taxes payable | (31,943) | 103,212 | (26,347) | |||||||||
Deferred revenue | 307,169 | 1,411,004 | 1,252,776 | |||||||||
Other current liabilities | (292,138) | (433,848) | 98,362 | |||||||||
Operating lease liabilities | (2,275,056) | (1,927,407) | (1,918,095) | |||||||||
Net cash (used in) provided by operating activities | (2,953,853) | 551,348 | 1,778,246 | |||||||||
Cash flows from investing activities: | ||||||||||||
Purchase of property and equipment | (773,964) | (860,034) | (2,038,054) | |||||||||
Purchase of intangible assets | (150,000) | - | - | |||||||||
Proceeds from disposal property and equipment | 444 | - | 7,133 | |||||||||
Payment made for long term debt investment | (6,000,000) | - | - | |||||||||
Advance of loans to third parties | (3,900,000) | - | (1,550,628) | |||||||||
Repayment from loans to third parties | 1,150,104 | - | 1,550,628 | |||||||||
Prepayment for the software, equipment and product development | (1,190,000) | - | - | |||||||||
Refund of prepayment for the product development | 400,000 | - | - | |||||||||
Net cash used in investing activities | (10,463,416) | (860,034) | (2,030,921) | |||||||||
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 | 2,685,588 | 445,831 | 1,903,563 | |||||||||
Repayments of short-term bank loans | (424,040) | (1,474,129) | (2,683,814) | |||||||||
Proceeds from long-term bank loan | - | - | 293,007 | |||||||||
Advances received from (payments made to) a related party | (1,892,423) | 1,076,717 | 572,712 | |||||||||
Payments made for deferred offering costs | (340,469) | (38,490) | (263,708) | |||||||||
Net cash provided by (used in) financing activities | 12,059,025 | 9,929 | (178,240) | |||||||||
Effect of exchange rate fluctuation on cash and cash equivalents | (75,924) | (682,585) | 206,659 | |||||||||
Net decrease in cash and cash equivalents | (1,434,168) | (981,342) | (224,256) | |||||||||
Cash and cash equivalents, beginning of year | 2,915,470 | 3,896,812 | 4,121,068 | |||||||||
Cash and cash equivalents, end of year | $ | 1,481,302 | $ | 2,915,470 | $ | 3,896,812 | ||||||
Supplemental cash flow information | ||||||||||||
Cash paid for income taxes | $ | 92,409 | $ | 5,282 | $ | 9,981 | ||||||
Cash paid for interest | $ | 32,444 | $ | 37,277 | $ | 66,688 | ||||||
Non-cash operating, investing and financing activities | ||||||||||||
Payable for purchase of property and equipment | $ | - | $ | 463,556 | $ | 682,618 | ||||||
Right of use assets obtained in exchange for operating lease liabilities | $ | 1,676,362 | $ | 5,160,825 | $ | 2,420,359 | ||||||
PPP loan forgiveness | $ | - | $ | - | $ | 502,298 | ||||||
Deferred IPO cost offset with additional paid-in capital | $ | 1,095,872 | $ | - | $ | - | ||||||
View original content:https://www.prnewswire.com/news-releases/chanson-international-holding-announces-fiscal-year-2023-financial-results-302132124.html
SOURCE Chanson International Holding
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