DAQING, China, Nov. 16, 2015 /PRNewswire/ -- QKL Stores Inc.
(the "Company") (Nasdaq: QKLS), a leading regional supermarket
chain in Northeastern China and
Inner Mongolia, today announced its financial results for the third
quarter ended September 30, 2015.
Mr. Zhuangyi Wang, Chairman and CEO, said, "Our third quarter
results generally met our levels of expectation. The variety, value
and freshness of our products continue to resonate with our
customers driving sales higher. This store growth was also driven
by in-store promotional events such as store anniversary
celebrations."
"The environment of retailing business is still challenging
mainly due to the rising costs and the emerging e-commerce channel.
However, we are still confident on the domestic needs because of
the urbanization of the third and fourth tier cities that we will
achieve a fundamental improvement in the consumer purchasing power
during the process."
"We look forward to the upcoming holiday season as we have a
number of exciting marketing initiatives planed. Our balance sheet
is healthy with a strong cash position, low level of debt and
stable flow of cash from operations. We continue to make progress
with our store operations and that can result in greater sales and
profits over time."
Third Quarter 2015 Financial
Results
Revenue in 3rd quarter decreased by $2.5 million, or 4.1%, to $58.6 million for the three months ended
September 30, 2015 from $61.1 million for the three months ended
September 30, 2014. Same store sales
represents sales from stores that were opened for at least one year
before the beginning of the comparison period, or by January 1, 2014. Same store (42 stores) sales
generated approximately $54.8 million
in sales in the third quarter of 2015, a decrease of $4.4 million, or 7.4% compared with $59.2 million in net sales in the third quarter
of 2014. New store sales increased, reflecting the opening of 3 new
stores since January 1, 2014. These
stores generated approximately $3.8
million in sales in the third quarter of 2015. The number of
stores including supermarkets/hypermarkets and department stores at
September 30, 2015 was 45 versus 47
at September 30, 2014.
Gross profit, or total revenue minus cost of sales, decreased by
$0.5 million, or 4.5%, to
$9.8 million, or 16.7% of net sales,
in the third quarter of 2015 from $10.3
million, or 16.8% of net sales, in the third quarter of
2014. The change in gross profit was primarily attributable to a
decrease in net sales of $2.5 million
and a decrease in cost of sales of $2.0
million in the third quarter of 2015 compared to the third
quarter of 2014. The decrease in gross profit relative to net sales
was due to competitions arising from the increasing challenge from
the online shopping that have significant pricing pressure on our
selling of high margin products.
Selling expenses decreased by $2.5
million, or 19.4%, to $10.5
million, or 18.0% of net sales, in the third quarter of
2015, and $13.1 million, or 21.4% of
net sales, in the third quarter of 2014. In specific, labor costs
decreased by $0.3 million or 5.2%, to
$5.5 million in the third quarter of
2015 from $5.8 million in the third
quarter of 2014. Promotion expenses decreased by $0.3 million, or 20.0%, to $1.2 million in the third quarter of 2015 from
$1.5 million in the third quarter of
2014. Utilities decreased by $0.2
million, or 11.8%, to
$1.5 million in the first quarter of
2015 from $1.7 million in the third
quarter of 2014. Preliminary expenses in relation to new store
opening was nil and $1.5 million in
the third quarter of 2015 and 2014 respectively.
General and administrative expenses decreased by $0.1 million, or 4.0%, to $2.0 million, or 3.3% of net sales, in the third
quarter of 2015 from $1.9 million, or
3.3% of net sales, in the third quarter of 2014. There is no significant change to our
general and administrative expense.
For the three months ended September 30,
2014, our net loss for the third quarter of 2015 was
$3.8 million, or $2.53 per diluted share, from net loss of
$5.5 million, or $3.60 per diluted share in the prior year period.
The number of shares used in the computation of diluted EPS was
1,522,326 for the third quarter of
2015 and 2014.
Conference Call
The Company will conduct a conference call to discuss its third
quarter 2015 results on Monday, November 16,
2015 at 8:30 am ET. Listeners
may access the call by dialing #1-719-325-2455. To participate,
please dial one of the local access numbers, listed below. The
conference call identification number is 10046673.
|
Participant Dial In
(Toll Free):
|
1-877-870-4263
|
|
Participant
International:
|
1-412-317-0790
|
|
Canadian Dial In
(Toll Free):
|
1-855-669-9657
|
|
China (N) Toll
Free:
|
4001-201203
|
|
China (S) Toll
Free:
|
4001-201203
|
|
Hong Kong Toll
Free:
|
800-905945
|
About QKL Stores Inc.:
Based in Daqing, China, QKL
Stores, Inc. is a leading regional supermarket chain company
operating in Northeastern China
and Inner Mongolia. QKL Stores sells a broad selection of
merchandise, including groceries, fresh food, and non-food items,
through its retail supermarkets, hypermarkets and department
stores; the company also has its own distribution centers that
service its supermarkets. For more information, please access the
Company's website at: www.qklstoresinc.com.
Safe Harbor
Statement
Certain statements in this release and other written or oral
statements made by or on behalf of the Company are "forward looking
statements" within the meaning of the federal securities laws.
Statements regarding future events and developments and our future
performance, as well as management's expectations, beliefs, plans,
estimates or projections relating to the future, are
forward-looking statements within the meaning of these laws. The
forward looking statements are subject to a number of risks and
uncertainties including market acceptance of the Company's services
and projects and the Company's continued access to capital and
other risks and uncertainties. The actual results the Company
achieves may differ materially from those contemplated by any
forward-looking statements due to such risks and uncertainties.
These statements are based on our current expectations and speak
only as of the date of such statements.
Contact Information
|
QKL Stores,
Inc.
In China:
|
|
Mike Li, Investor
Relations
|
|
+86-459-460-7987
|
|
QKL STORES INC.
AND SUBSIDIARIES
|
|
Condensed
Consolidated Balance Sheets
|
|
|
September
30,
2015
|
|
December 31,
2014
|
|
(Unaudited)
|
|
|
|
ASSETS
|
|
|
|
|
|
|
Cash
|
$
|
18,789,468
|
|
$
|
9,013,006
|
|
Restricted
cash
|
|
20,506,868
|
|
|
8,623,748
|
|
Accounts
receivable
|
|
936,843
|
|
|
949,211
|
|
Inventories
|
|
42,851,508
|
|
|
62,605,754
|
|
Other
receivables
|
|
19,565,180
|
|
|
21,375,611
|
|
Prepaid
expenses
|
|
11,232,673
|
|
|
12,114,028
|
|
Advances to
suppliers
|
|
8,524,899
|
|
|
8,653,037
|
|
Deferred income tax
assets -- current portion
|
|
2,828,440
|
|
|
2,839,714
|
|
Total current
assets
|
|
125,235,879
|
|
|
126,174,109
|
|
Property, plant and
equipment, net
|
|
34,335,416
|
|
|
37,843,171
|
|
Land use rights,
net
|
|
637,764
|
|
|
684,375
|
|
Deferred income tax
assets -- non-current portion
|
|
59,570
|
|
|
61,681
|
|
Other assets
|
|
11,886
|
|
|
11,880
|
|
Total assets
|
$
|
160,280,515
|
|
$
|
164,775,216
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
Short-term
loans
|
$
|
70,712,467
|
|
$
|
60,201,757
|
|
Accounts
payable
|
|
35,689,016
|
|
|
37,206,633
|
|
Cash card and coupon
liabilities
|
|
14,489,950
|
|
|
14,539,728
|
|
Customer deposits
received
|
|
1,968,447
|
|
|
2,005,136
|
|
Accrued expenses and
other payables
|
|
22,665,590
|
|
|
23,147,611
|
|
Income taxes
payable
|
|
32,516
|
|
|
241,189
|
|
Total current
liabilities
|
|
145,557,986
|
|
|
137,342,054
|
|
Total
liabilities
|
|
145,557,986
|
|
|
137,342,054
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
Common stock, $0.001
par value per share, authorized 100,000,000 shares, issued and
outstanding 1,522,326 shares at September 30, 2015 and December 31,
2014
|
|
1,522
|
|
|
1,522
|
|
Series A convertible
preferred stock, par value $0.01, authorized 10,000,000 shares,
issued and
outstanding 529,412 shares at September 30, 2015 and December 31,
2014
|
|
5,294
|
|
|
5,294
|
|
Additional paid-in
capital
|
|
93,746,014
|
|
|
93,746,014
|
|
Retained earnings --
appropriated
|
|
8,338,153
|
|
|
8,338,153
|
|
Retained
earnings
|
|
(102,088,725)
|
|
|
(89,116,190)
|
|
Accumulated other
comprehensive income
|
|
14,720,271
|
|
|
14,458,369
|
|
Total shareholders'
equity
|
|
14,722,529
|
|
|
27,433,162
|
|
Total liabilities and
shareholders' equity
|
$
|
160,280,515
|
|
$
|
164,775,216
|
|
QKL STORES INC.
AND SUBSIDIARIES
|
|
Condensed
Consolidated Statements of Income
|
|
|
(Unaudited)
|
|
(Unaudited)
|
|
Three Months
Ended September 30,
|
|
Nine Months
Ended September 30,
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Net sales
|
$
|
58,624,419
|
|
$
|
61,121,016
|
|
$
|
207,615,214
|
|
$
|
198,809,303
|
|
Cost of
sales
|
|
48,825,220
|
|
|
50,855,098
|
|
|
173,493,113
|
|
|
165,124,579
|
|
Gross profit
|
|
9,799,199
|
|
|
10,265,918
|
|
|
34,122,101
|
|
|
33,684,724
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
10,523,974
|
|
|
13,062,967
|
|
|
37,361,946
|
|
|
35,800,120
|
|
General and
administrative expenses
|
|
1,940,631
|
|
|
2,022,426
|
|
|
6,492,514
|
|
|
7,219,674
|
|
Total operating
expenses
|
|
12,464,605
|
|
|
15,085,393
|
|
|
43,854,460
|
|
|
43,019,794
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
(2,665,406)
|
|
|
(4,819,475)
|
|
|
(9,732,359)
|
|
|
(9,335,070)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
250,179
|
|
|
241,800
|
|
|
540,008
|
|
|
726,416
|
|
Interest
expense
|
|
(1,432,582)
|
|
|
(891,855)
|
|
|
(3,760,497)
|
|
|
(3,670,486)
|
|
Total non-operating
expense
|
|
(1,182,403)
|
|
|
(650,055)
|
|
|
(3,220,489)
|
|
|
(2,944,070)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss before income
taxes
|
|
(3,847,809)
|
|
|
(5,469,530)
|
|
|
(12,952,848)
|
|
|
(12,279,140)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
656
|
|
|
11,357
|
|
|
19,687
|
|
|
21,096
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
loss
|
$
|
(3,848,465)
|
|
$
|
(5,480,887)
|
|
$
|
(12,972,535)
|
|
$
|
(12,300,236)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
$
|
(3,848,465)
|
|
$
|
(5,480,887)
|
|
$
|
(12,972,535)
|
|
$
|
(12,300,236)
|
|
Foreign currency
translation adjustment
|
|
(335,070)
|
|
|
675,064
|
|
|
261,902
|
|
|
(57,107)
|
|
Comprehensive
loss
|
$
|
(4,183,535)
|
|
$
|
(4,805,823)
|
|
$
|
(12,710,633)
|
|
$
|
(12,357,343
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
1,522,326
|
|
|
1,522,326
|
|
|
1,522,326
|
|
|
1,522,326
|
|
Diluted
|
|
1,522,326
|
|
|
1,522,326
|
|
|
1,522,326
|
|
|
1,522,326
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Losses per
share:
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
(2.53)
|
|
$
|
(3.60)
|
|
$
|
(8.52)
|
|
$
|
(8.08)
|
|
Diluted
|
$
|
(2.53)
|
|
$
|
(3.60)
|
|
$
|
(8.52)
|
|
$
|
(8.08)
|
|
QKL STORES INC.
AND SUBSIDIARIES
|
|
Condensed
Consolidated Statements of Cash Flows
|
|
|
(Unaudited)
|
|
Nine Months Ended
September 30,
|
|
2015
|
|
2014
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
Net loss
|
$
|
(12,972,535)
|
|
$
|
(12,300,236)
|
|
Depreciation
|
|
3,023,678
|
|
|
5,084,837
|
|
Amortization
|
|
23,903
|
|
|
24,173
|
|
Share-based
compensation
|
|
-
|
|
|
306,309
|
|
Deferred income
tax
|
|
(88,564)
|
|
|
(8,770)
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Accounts
receivable
|
|
(20,739)
|
|
|
233,589
|
|
Inventories
|
|
18,546,323
|
|
|
16,845,228
|
|
Other
receivables
|
|
1,111,685
|
|
|
2,599,829
|
|
Prepaid
expenses
|
|
481,141
|
|
|
2,916,696
|
|
Advances to
suppliers
|
|
(173,189)
|
|
|
2,829,497
|
|
Accounts
payable
|
|
(251,754)
|
|
|
(1,606,320)
|
|
Cash card and coupon
liabilities
|
|
461,646
|
|
|
(293,403)
|
|
Customer deposits
received
|
|
32,921
|
|
|
212
|
|
Accrued expenses and
other payables
|
|
319,512
|
|
|
211,765
|
|
Income taxes
payable
|
|
(206,596)
|
|
|
32,248
|
|
Net cash provided by
operating activities
|
|
10,287,432
|
|
|
16,875,654
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Purchases of property,
plant and equipment
|
|
(742,895)
|
|
|
(3,229,057)
|
|
Increase of restricted
cash
|
|
(12,553,657)
|
|
|
-
|
|
Net cash used in
investing activities
|
|
(13,296,552)
|
|
|
(3,229,057)
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Repayment of bank
borrowings
|
|
(71,758,322)
|
|
|
(16,259,555)
|
|
Bank loan
borrowing
|
|
84,716,935
|
|
|
35,771,021
|
|
Net cash provided by
financing activities
|
|
12,958,613
|
|
|
19,511,466
|
|
|
|
|
|
|
|
Effect of foreign
currency translation
|
|
(173,031)
|
|
|
202,404
|
|
|
|
|
|
|
|
Net increase in
cash
|
|
9,949,493
|
|
|
33,360,467
|
|
Cash -- beginning of
period
|
|
9,013,006
|
|
|
9,245,212
|
|
Cash -- end of
period
|
$
|
18,789,468
|
|
$
|
42,605,679
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
Interest
paid
|
$
|
3,760,497
|
|
$
|
3,670,486
|
|
Income taxes
paid
|
$
|
228,360
|
|
$
|
65,184
|
|
|
|
|
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/qkl-stores-inc-announces-third-quarter-2015-financial-results-300178999.html
SOURCE QKL Stores Inc.