J-Long Group Limited (“JL” or the “Company”) (NASDAQ: JL), JL conducts its primary operations of apparel trims solution services in Hong Kong, today announced its unaudited financial results for the six months ended September 30, 2023.

Overview:

  • Revenue was approximately US$14.6 million for the six months ended September 30, 2023, representing a decrease of approximately 34.9% from the same period in 2022.
  • Net income was approximately US$1.4 million for the six months ended September 30, 2023 (2022: approximately US$3.4 million).

Six Month Financial Results Ended September 30, 2023

Revenue. Revenue decreased by approximately 34.9% from approximately US$22.4 million for the six months ended September 30, 2022, to approximately US$14.6 million for the six months ended September 30, 2023. During the six months ended September 30, 2023, revenue decreased mainly due to a decrease in the sales of heat transfers of approximately US$11.8 million from the same period in 2022 that was set off by an increase in the sales of the other products of approximately US$4 million.

Selling, general and administrative expenses. Selling, general and administrative expenses increased by approximately 22% from approximately US$2.0 million for the six months ended September 30, 2022 to approximately US$2.4 million for the six months ended September 30, 2023, which was mainly due to (i) an increase in payroll to our staff and fees to our directors; (ii) increase in depreciation of right-of-use due to an increase of rental fee for the warehouses and offices.

Other income, net. Other net income decreased by approximately US$0.1 million from approximately US$0.3 million for the six months ended September 30, 2022 to approximately US$0.2 million for the six months ended September 30, 2023, which was mainly due to the subsidy from the Employment Support Scheme launched by the Hong Kong government received during 30 September 2022.

Income tax expense. Income tax expense decreased to US$0.3 million for the for the six months ended September 30, 2023 (six months ended September 30, 2022: approximately US$0.7 million) which was mainly due to the decrease in net income.

Net income. Net income decreased by approximately US$2.0 million to approximately US$1.4 million, which was mainly due to the decrease in revenue.

Basic and diluted EPS. Basic and diluted EPS were approximately US$0.05 per ordinary share for the six months ended September 30, 2023, as compared to US$0.11 per ordinary share for the six months ended September 30, 2022, respectively.

Liquidity and Capital Resources

As of September 30, 2023, the Company had cash of US$768,159, total current assets of $17,018,359, and total current liabilities of US$6,259,310. Net current assets were US$10,759,049 and working capital ratio was 0.36. As of September 30, 2023, the Company’s total assets and total liabilities amounted to US$20,753,700 and US$7,986,428, respectively. As of September 30, 2023, the Company’s total stockholder’s equity amounted to US$12,767,272 and its gearing ratio (bank loan divided by stockholder’s equity) was 18.3%.

Off-Balance Sheet ArrangementsThe Company does not have any off-balance sheet arrangements, including arrangements that would affect its liquidity, capital resources, market risk support, credit risk support, or other benefits.

About J-Long Group Limited

J-Long Group Limited is an established distributor in Hong Kong of reflective and non-reflective garment trims including, among others, heat transfers, fabrics, woven labels and tapes, sewing badges, piping, zipper pullers and drawcords. The Company offer a wide range of services to cater to customers’ needs in reflective and non-reflective garment trims, including market trend analysis, product design and development and production and quality control. For more information, visit the Company’s website at http://j-long.com.

Safe Harbor Statement

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 “may,” “will,” “expect,” “anticipate,” “aim,” “estimate,” “intend,” “plan,” “believe,” “is/are likely to,” “potential,” “continue” 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 SEC, which are available for review at www.sec.gov.

Hong Kong:

J-Long Group Limited Edwin Wong, CEO and Director ir@j-long.com +852 3693 2110

J-LONG GROUP LIMITED UNAUDITED CONSOLIDATED BALANCE SHEETS
    As of
    March 31, September 30,
    2023   2023
    USD   USD
    (Audited)   (Unaudited)
Assets            
Current assets:            
Cash and cash equivalents   5,959,927     768,159  
Accounts receivable, net   2,085,776     1,905,455  
Accounts receivable, net – related parties   17,562     66,298  
Investment in marketable debt securities   243,284     44,070  
Inventories   5,785,616     6,676,754  
Notes receivable   393,442     -  
Prepaid expenses and other current assets, net   126,208     248,219  
Due from related parties   2,109,768     7,309,404  
Total current assets   16,721,583     17,018,359  
Property, plant and equipment, net   2,367,136     2,313,122  
Right-of-use assets – Operating lease   447,475     262,831  
Deferred cost   989,793     1,079,762  
Deferred tax assets   79,626     79,626  
Total non-current assets   3,884,030     3,735,341  
TOTAL ASSETS   20,605,613     20,753,700  
             
Liabilities            
Current liabilities:            
Bank loans – current   626,657     626,657  
Operating lease liabilities – current   7,151     -  
Operating lease liabilities – current – related parties   359,658     258,322  
Accounts payable, accruals and other current liabilities   3,167,676     3,169,449  
Accounts payable – related parties   2,382,072     1,625,969  
Contract liabilities   231,475     -  
Due to related parties   240,375     158,182  
Income taxes payable   140,236     420,731  
Total current liabilities   7,155,300     6,259,310  
             
Non-current liabilities            
Bank loans – non-current   2,014,375     1,715,472  
Operating lease liabilities – non-current – related parties   88,139     11,646  
Total non-current liabilities   2,102,514     1,727,118  
TOTAL LIABILITIES   9,257,814     7,986,428  
             
Commitments and contingencies   —     —  
             
Shareholders’ equity            
Ordinary shares US$0.0000375 par value each; 1,360,000,000 shares authorized; 30,000,000 shares issued and outstanding   1,125     1,125  
Additional Paid-in Capital   256,410     256,410  
Accumulated other comprehensive income/(loss)   (414 )   (414 )
Retained earnings   11,090,678     12,510,151  
Total shareholders’ equity   11,347,799     12,767,272  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   20,605,613     20,753,700  

J-LONG GROUP LIMITEDUNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
    For the six months ended September 30,
    2022   2023
    USD   USD
    (Unaudited)   (Unaudited)
Revenues   22,384,724     14,571,703  
Cost of sales   16,579,568     10,589,566  
Gross profit   5,805,156     3,982,137  
             
Operating expenses:            
Selling and marketing expenses   1,040,775     1,037,531  
General and administrative expenses   966,350     1,411,237  
Total operating expenses   2,007,125     2,448,768  
             
Income from operations   3,798,031     1,533,369  
             
Other income (expenses):            
Other income (expenses)   183,497     25,816  
Currency exchange gain   124,306     222,203  
Interest (expenses) income, net   (45,255 )   (81,420 )
Total other income (expense)   262,548     166,599  
             
Income before tax expense   4,060,579     1,699,968  
Income tax expense   670,013     280,495  
Net income   3,390,566     1,419,473  
             
Other comprehensive income/(loss)            
Unrealized gain (losses) on investment in marketable debt securities, net of tax   -     -  
Total comprehensive income   3,390,566     1,419,473  
             
Net income per share attributable to ordinary shareholders            
Basic and diluted   0.11     0.05  
Weighted average number of ordinary shares used in computing net income per share            
Basic and diluted   30,000,000     30,000,000  
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