DAQING, China, April 14, 2016 /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
fourth quarter and full year financial results ended
December 31, 2015.
Mr. Zhuangyi Wang, Chairman and CEO, said, "As QKL expands its
market presence in northeast China, we are uniquely positioned against our
local competitors through our large product offering, strong
supplier relationships, efficient distribution network and
state-of-the-art IT system. We are comfortable with our
opportunities in 2015 and believe we'll see an improvement in
operating expenses and profit growth in coming quarters.
"In 2015, we closed three stores; as of December 31,
2015, we operated 25 supermarkets, 16 hypermarkets, 4
department stores and 5 distribution centers situated in Daqing,
Harbin Changchun and Jiamusi, respectively.
"As we advance into 2015, we
expect to open one new supermarket this year. We maintain
confidence in our strategy of strengthening our store presence in
Tier 4 and 5 cities in northeastern China as well as in our core region of
operation around Daqing where the majority of our older stores are
based."
Fourth Quarter 2015
Financial Results
Revenue in the fourth quarter of 2015 decreased by 17.7% to
$62.4 million from $75.8 million in the fourth quarter of 2014.
Comparable stores are stores that were opened for at least one year
before the beginning of the comparison period, or by
October 1, 2014. Those 40 stores
generated approximately $55.0 million
in sales in the fourth quarter of 2015, representing a decrease of
$10.1 million, or 15.6% compared with
$65.1 million in sales in fiscal
2014. New store sales increased, reflecting the opening of 5 new
stores since October 1, 2014. These
stores generated approximately $7.4
million in sales in the fiscal 2015.
Gross profit decreased by 17.3% year over year to $10.5 million, compared to $12.7 million in the prior year period. Gross
profit as a percentage of revenue for the fourth quarter of 2015
was 16.9%, compared to 16.8% for the fourth quarter of 2014. The
change in gross profit was primarily attributable to net sales
decreased by $13.4 million in fiscal
2015 compared to fiscal 2014.
Operating expenses increased by 24.4% to $30.6 million compared to $24.6 million in the prior year period. The
change in operating expenses was mainly due to the increase in
expenses, including salaries, utility and advertising in fiscal
2015. The increase was also due to a $5.0
million of long-lived asset impairment charges during fiscal
2015.
We had a net loss of $18.3 million
in the fourth quarter of 2015 compared with net loss of
$14.7 million in the fourth quarter
of 2014.
Full Year 2015 Financial
Results
Net sales decreased by $4.5
million, or 1.6%, to $270.1
million for fiscal 2015 from $274.6
million for fiscal 2014. Comparable stores are stores
that were opened for at least one year before the beginning of the
comparison period, or by January 1,
2014. Those 40 stores generated approximately $235.3 million sales in fiscal 2015, a decrease
of $11.4 million, or 4.6% compared
with $246.7 million sales in fiscal
2014. New store sales increased, reflecting the opening of 5 new
stores since January 1, 2014. These
stores generated approximately $31.8
million in sales in the fiscal 2015. The number of stores
including supermarkets/hypermarkets and department stores at fiscal
2015 was 45 versus 48 at fiscal 2014.
Gross profit, or total revenue minus cost of sales,
was decreased by $0.7 million,
or 1.7%, to $45.7 million, or 16.9%
of net sales, in fiscal 2015 from $46.4
million, or 16.9% of net sales, in fiscal 2014. The change
in gross profit was primarily attributable to net sales
decreasing by $4.5 million in fiscal 2015 compared to fiscal
2014.
Operating expenses increased by $2.8
million, or 4.8%, to $61.6
million, or 22.8% of net sales, in fiscal 2015 from
$58.7 million, or 21.4% of net sales,
in fiscal 2014. The change in operating expenses was mainly due to
the increase in expenses, including salaries, utility and
advertising in fiscal 2015. The increase was also due to $5.0
million of long-lived asset impairment charges during fiscal
2015.
We had a net loss of $31.2 million
in fiscal 2015 compared with net loss of $27.0 million in fiscal 2014. The number of
shares used in the computation of diluted EPS was 1,522,326 shares
in fiscal 2015 and 2014.
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
|
|
Consolidated
Balance Sheets
|
|
|
|
|
|
|
|
December 31, 2015
|
|
December 31, 2014
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Cash
|
|
$
|
9,059,312
|
|
$
|
9,013,006
|
|
Restricted
cash
|
|
|
8,164,524
|
|
|
8,623,748
|
|
Short term
investment
|
|
|
107,830
|
|
|
-
|
|
Accounts
receivable
|
|
|
667,842
|
|
|
949,211
|
|
Inventories
|
|
|
57,911,057
|
|
|
62,605,754
|
|
Other
receivables
|
|
|
19,119,889
|
|
|
21,375,611
|
|
Prepaid
expenses
|
|
|
9,388,381
|
|
|
12,114,028
|
|
Advances to
suppliers
|
|
|
10,959,426
|
|
|
8,653,037
|
|
Deferred income tax
assets – current portion
|
|
|
2,058,207
|
|
|
2,839,714
|
|
|
|
|
|
|
|
|
Total current
assets
|
|
|
117,436,468
|
|
|
126,174,109
|
|
Property, plant
equipment, net
|
|
|
23,658,581
|
|
|
37,843,171
|
|
Land use rights,
net
|
|
|
619,318
|
|
|
684,375
|
|
Deferred income tax
assets – non-current portion
|
|
|
1,253,286
|
|
|
61,681
|
|
Other assets
|
|
|
6,224
|
|
|
11,880
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
142,973,877
|
|
$
|
164,775,216
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Short term bank
loans
|
|
|
69,319,285
|
|
|
60,201,757
|
|
Accounts
payable
|
|
|
41,062,255
|
|
|
37,206,633
|
|
Cash card and coupon
liabilities
|
|
|
13,556,213
|
|
|
14,539,728
|
|
Customer deposits
received
|
|
|
2,866,632
|
|
|
2,005,136
|
|
Accrued expenses and
other payables
|
|
|
21,636,314
|
|
|
23,147,611
|
|
Income taxes
payable
|
|
|
43,364
|
|
|
241,189
|
|
|
|
|
|
|
|
|
Total current
liabilities
|
|
|
148,484,063
|
|
|
137,342,054
|
|
Warrant
liabilities
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
148,484,063
|
|
|
137,342,054
|
|
|
|
|
|
|
|
|
Commitments and
contingencies
|
|
|
-
|
|
|
-
|
|
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
|
|
Common stock, $0.001
par value per share, authorized 100,000,000 shares, issued and
outstanding 1,522,326 and 1,522,326 shares at December 31, 2015 and
December 31, 2014 respectively
|
|
|
1,522
|
|
|
1,522
|
|
Series A convertible
preferred stock, par value $0.01, authorized 10,000,000 shares,
issued and outstanding 529,412 and 529,412 shares at December 31,
2015 and December 31, 2014
|
|
|
5,294
|
|
|
5,294
|
|
Additional paid-in
capital
|
|
|
93,746,014
|
|
|
93,746,014
|
|
Retained earnings –
appropriated
|
|
|
8,342,969
|
|
|
8,338,153
|
|
Retained
earnings
|
|
|
(120,345,590)
|
|
|
(89,116,190)
|
|
Accumulated other
comprehensive income
|
|
|
12,739,605
|
|
|
14,458,369
|
|
|
|
|
|
|
|
|
Total shareholders'
equity
|
|
|
(5,510,186)
|
|
|
27,433,162
|
|
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
|
$
|
142,973,877
|
|
$
|
164,775,216
|
|
QKL STORES INC.
AND SUBSIDIARIES
|
|
Consolidated
Statements of Operations
|
|
|
|
|
|
Years Ended December 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
Net sales
|
|
$
|
270,064,086
|
|
$
|
274,636,920
|
|
Cost of
sales
|
|
|
224,410,425
|
|
|
228,215,577
|
|
Gross profit
|
|
|
45,653,661
|
|
|
46,421,343
|
|
|
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
61,552,981
|
|
|
58,724,799
|
|
General and
administrative expenses
|
|
|
11,933,688
|
|
|
8,879,070
|
|
Total operating
expenses
|
|
|
73,486,669
|
|
|
67,603,869
|
|
|
|
|
|
|
|
|
Loss from
operations
|
|
|
(27,833,008)
|
|
|
(21,182,526)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-operating
income(expense):
|
|
|
|
|
|
|
|
Interest
income
|
|
|
564,320
|
|
|
622,988
|
|
Interest
expense
|
|
|
(4,714,296)
|
|
|
(4,436,526)
|
|
Total non-operating
income
|
|
|
(4,149,976)
|
|
|
(3,813,538)
|
|
|
|
|
|
|
|
|
Loss before income
tax
|
|
|
(31,982,984)
|
|
|
(24,996,064)
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
(758,400)
|
|
|
1,965,765
|
|
|
|
|
|
|
|
|
Net
loss
|
|
$
|
(31,224,584)
|
|
$
|
(26,961,829)
|
|
Comprehensive loss
statement:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net loss
|
|
|
(31,224,584)
|
|
|
(26,961,829)
|
|
Foreign currency
translation adjustment
|
|
|
(1,718,764)
|
|
|
501,580
|
|
|
|
|
|
|
|
|
Comprehensive
loss
|
|
$
|
(32,943,348)
|
|
$
|
(26,460,249)
|
|
*Basic earnings per
share of common stock
|
|
$
|
(20.51)
|
|
$
|
(17.71)
|
|
*Diluted earnings per
share
|
|
$
|
(20.51)
|
|
$
|
(17.71)
|
|
|
|
|
|
|
|
|
*Weighted average
shares used in calculating net income per ordinary share –
basic
|
|
|
1,522,326
|
|
|
1,522,326
|
|
*Weighted average
shares used in calculating net income per ordinary share –
diluted
|
|
|
1,522,326
|
|
|
1,522,326
|
|
QKL STORES INC.
AND SUBSIDIARIES
|
|
Consolidated
Statements of Cash Flows
|
|
|
|
|
|
Years Ended December 31,
|
|
|
2015
|
|
2014
|
|
|
|
|
|
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
Net loss
|
|
$
|
(31,224,584)
|
|
$
|
(26,961,829)
|
|
Depreciation-property,
plant and equipment
|
|
|
4,079,764
|
|
|
4,942,830
|
|
Amortization
|
|
|
29,820
|
|
|
30,223
|
|
Deferred income
tax
|
|
|
(588,435)
|
|
|
(60,393)
|
|
Loss on disposal of
property, plant and equipment
|
|
|
3,740,273
|
|
|
1,205,657
|
|
Share-based
compensation
|
|
|
-
|
|
|
408,057
|
|
Provision/(reversal) on
PPE, inventory, other receivables and sales return
|
|
|
5,164,943
|
|
|
(378,576)
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
Accounts
receivable
|
|
|
240,563
|
|
|
(394,389)
|
|
Inventories
|
|
|
1,555,062
|
|
|
1,761,003
|
|
Other
receivables
|
|
|
880,704
|
|
|
880,698
|
|
Prepaid
expenses
|
|
|
2,168,357
|
|
|
(2,250,285)
|
|
Advances to
suppliers
|
|
|
(2,883,981)
|
|
|
(871,150)
|
|
Accounts
payable
|
|
|
6,083,334
|
|
|
1,552,356
|
|
Cash card and coupon
liabilities
|
|
|
(218,068)
|
|
|
(3,829,348)
|
|
Customer deposits
received
|
|
|
1,009,143
|
|
|
1,026,003
|
|
Accrued expenses and
other payables
|
|
|
(1,894,818)
|
|
|
5,209,616
|
|
Income taxes
payable
|
|
|
(192,789)
|
|
|
1,972,000
|
|
Net cash used in
operating activities
|
|
|
(12,050,712)
|
|
|
(15,757,527)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
Purchases of short term
investment
|
|
|
(112,381)
|
|
|
-
|
|
Purchases of property,
plant and equipment
|
|
|
(459,504)
|
|
|
(4,230,820)
|
|
Sales proceeds of fixed
assets disposal
|
|
|
322,444
|
|
|
277,290
|
|
Net cash used in
investing activities
|
|
|
(249,441)
|
|
|
(3,953,530)
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
Bank
repayment
|
|
|
(59,401,490)
|
|
|
(40,678,849)
|
|
Bank
borrowings
|
|
|
72,245,055
|
|
|
60,204,696
|
|
Net cash provided by
financing activities
|
|
|
12,843,565
|
|
|
19,525,847
|
|
|
|
|
|
|
|
|
Net increase/(decrease)
in cash
|
|
|
543,412
|
|
|
(185,210)
|
|
|
|
|
|
|
|
|
Effect of foreign
currency translation
|
|
|
(497,106)
|
|
|
(46,996)
|
|
|
|
|
|
|
|
|
Cash at beginning of
period
|
|
|
9,013,006
|
|
|
9,245,212
|
|
Cash at end of
period
|
|
$
|
9,059,312
|
|
$
|
9,013,006
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information:
|
|
|
|
|
|
|
|
Interest
paid
|
|
|
4,714,296
|
|
|
4,436,526
|
|
Income taxes
(received)
|
|
$
|
(27,860)
|
|
$
|
(45,196)
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/qkl-stores-inc-announces-fourth-quarter-and-full-year-2015-financial-results-300251436.html
SOURCE QKL Stores Inc.
