Jerash Holdings — Fiscal 2027 Second Quarter Earnings Summary

Financial Performance:

• Revenue increased 19.8% year-over-year to $50.3 million for the quarter ended September 30, 2026, compared to $42.0 million in the prior-year quarter.
• Gross profit rose 45.4% to $9.1 million from $6.3 million in the prior-year quarter.
• Gross margin expanded 320 basis points to 18.2% from 15.0% in the prior-year quarter.
• Operating income increased nearly three-fold to $3.1 million from $1.1 million in the prior-year quarter.
• Net income advanced to $2.2 million, or $0.16 per diluted share, compared to $479,000, or $0.04 per diluted share, in the prior-year quarter.
• Operating expenses totaled $6.1 million for the quarter, up from $5.2 million in the prior-year quarter, driven by higher sales volume, increased headcount, and related expenses.
• Total other expenses were $506,000 for the quarter, compared to $456,000 in the prior-year quarter, primarily due to higher interest expense on a mortgage loan and increased costs under customer supply chain financing programs.
• Income tax expenses were $402,000 for the quarter, with an effective tax rate of 15.7% compared to 24.3% in the prior-year quarter, attributed to a Jordanian tax concession reducing the corporate income tax rate from 20% to 10% effective October 2025.
• For the six months ended September 30, 2026, revenue increased 23.2% to $100.5 million from $81.6 million, and net income increased to $3.8 million, or $0.29 per diluted share, from $803,000, or $0.06 per diluted share.
• Cash, cash equivalents, and restricted cash totaled $16.9 million as of September 30, 2026, with net working capital of approximately $40.6 million.

Guidance and Future Outlook:

• Fiscal 2027 third-quarter revenue is expected to be approximately $49 million to $51 million, representing a 17-22% increase from the same quarter last year.
• Fiscal 2027 third-quarter gross margin is expected to be approximately 16-17%, accounting for increased transportation costs for raw material imports.
• Production facilities are fully booked through June 2027 with strong order inflow.
• Capacity expansion projects, including renovations at an acquired facility and construction of a third satellite factory supported by the Jordanian government, are expected to be completed by September 2027.
• These capacity expansion projects are anticipated to increase production capacity by approximately 15-20 percent.

Business Segments and Product Lines:

• The company manufactures and exports custom, ready-made, sportswear, and outerwear for leading global brands including VF Corporation (The North Face, Timberland, Vans), New Balance, G-III (Calvin Klein, Tommy Hilfiger, Nautica), Urban Outfitters, American Eagle, and Acushnet Holdings Corp (FootJoy).
• Revenue growth in the second quarter was primarily driven by higher shipments to the company's largest U.S. customer and other customers with orders primarily for the U.S. market.
• Gross margin improvements were driven by higher shipment volumes to U.S. customers that typically generate stronger margins, automation-related efficiency gains, advance purchases of raw materials, and tighter controls on wastage allowances.
• The company operates eight factory units and six warehouses in Jordan, employing approximately 6,600 people.

Market and Competitive Landscape:

• The company leverages duty-free and preferential tariff treatment for qualifying apparel and textile exports to key markets including the United States, Europe, and others.
• The company cites its ability to maintain reliable execution and on-time delivery in a challenging operating environment as a significant competitive advantage.
• The company navigated logistics challenges across the Middle East, including higher import transportation costs driven by regional shipping disruptions and ongoing uncertainty.

Risks and Challenges:

• The company faces risks related to logistics challenges, regional shipping disruptions, and ongoing uncertainty in the Middle East.
• Increased transportation costs for raw material imports are expected to impact gross margins in the third quarter.
• Forward-looking statements regarding future events, financial forecasts, expansion plans, and production capacity increases are subject to risks and uncertainties that could cause actual results to differ materially.

Management Commentary and Tone:

• CEO Sam Choi described the quarter as a "strong quarter of performance" with "meaningful growth in both revenue and profitability."
• Management highlighted that despite headwinds, the company expanded margins through strategic early purchases of raw materials, disciplined cost controls, reduced waste, and enhanced operational efficiencies through automation.
• Management emphasized the strength and resilience of the Jordan-based manufacturing platform and its ability to maintain reliable execution in a challenging environment.

Other Key Points:

• On November 5, 2026, the board of directors approved a regular quarterly dividend of $0.05 per share on common stock, payable on November 23, 2026, to stockholders of record as of November 16, 2026.
• The company hosted an investor conference call on November 10, 2026, at 9:00 a.m. Eastern Time to discuss results.
• Deferred revenue decreased to $86,393 as of September 30, 2026, from $241,357 as of March 31, 2026.
• Accounts receivable decreased to $4.3 million as of September 30, 2026, from $5.7 million as of March 31, 2026.
• Inventories decreased to $23.3 million as of September 30, 2026, from $30.0 million as of March 31, 2026.
• Net cash provided by operating activities for the six months ended September 30, 2026, was $7.5 million, compared to $318,278 in the prior-year period.