Business Context and Reporting Period
Company: Jerash Holdings (US), Inc. (Ticker: JRSH)
Filing Type: Form 10-Q (Quarterly Report)
Reporting Period: Three and nine months ended December 31, 2025
Business Overview: The Company is a holding company primarily engaged in the manufacturing and exporting of customized, ready-made sportswear and outerwear from facilities in Jordan. It operates as a single reportable segment.
Key Financial Metrics
| Metric (in thousands) | 3 Months Ended Dec 31, 2025 | 9 Months Ended Dec 31, 2025 |
|---|---|---|
| Revenue, Net | $41,769 | $123,367 |
| Gross Profit | $7,049 | $19,428 |
| Gross Margin | 16.9% | 15.8% |
| Net Income (Loss) | $1,156 | $1,959 |
| Net Income Attributable to Common Stockholders | $1,171 | $1,951 |
| Diluted EPS | $0.09 | $0.15 |
| Cash and Restricted Cash | $13,156 (Total) | $13,156 (Total) |
| Total Debt (Credit Facilities) | $9,340 | $9,340 |
| Working Capital | $36,391 | $36,391 |
Material Changes vs. Prior Period
- Revenue Growth: Revenue increased 18% year-over-year (YoY) for the quarter to $41.8 million and 6% YoY for the nine-month period to $123.4 million. Growth was driven by increased shipments to U.S. customers and the introduction of a new customer in Korea.
- Profitability Improvement: Net income for the quarter surged to $1.2 million from a negligible $6,000 in the prior year. For the nine months, the Company reported a net income of $2.0 million compared to a net loss of $0.7 million in the prior year.
- Margin Expansion: Gross margin improved to 17% for the quarter (from 15% prior year) and 16% for the nine months (from 15% prior year), attributed to economies of scale and product mix changes.
- Expense Management: Stock-based compensation expenses decreased significantly by 52% for both the quarter and nine-month periods compared to the prior year.
- Debt Utilization: Credit facilities outstanding increased to $9.3 million from $4.5 million at the end of the prior fiscal year, reflecting higher utilization of bank facilities and supply chain financing to support business growth.
Guidance, Outlook, and Risks
- Tariff Environment: The Company notes the impact of U.S. tariffs on imports from Jordan. A baseline tariff of 10% was imposed in April 2025, with "reciprocal" tariffs initially set at 20% but modified to 15% as of July 31, 2025. While customers typically pay these tariffs, the Company monitors the impact on demand.
- Geopolitical Risks: Operations in Jordan are subject to regional risks, including conflicts between Israel and Hamas/Iran. The Company maintains contingency plans, including alternative shipping routes via the UAE and potential production relocation.
- Capital Expenditures: Management projects aggregate capital expenditures of approximately $7.8 million for fiscal year 2026, increasing in subsequent years to enhance production capacity. A new property purchase in Jordan was approved in February 2026.
- Joint Ventures: Two joint ventures, J&B and Jerash Newtech, have approved termination/deregistration plans expected to complete in 2027.
- Dividends: The Board declared a quarterly dividend of $0.05 per share in February 2026, consistent with recent quarters.
Investor Verification Checklist
- Tariff Impact: Verify the actual pass-through of the 15% U.S. tariff to customers and its effect on future order volumes.
- Customer Concentration: Note that VF Corporation accounted for 46% of quarterly revenue and 57% of nine-month revenue; monitor dependency on this single client.
- Working Capital Trends: Accounts receivable increased significantly to $7.8 million (from $3.1 million prior year); verify collection timelines and the effectiveness of supply chain financing programs.
- Debt Covenants: Review the terms of the new Bank al Etihad facility ($6.0 million limit) and DBS facility ($5.0 million limit) for compliance with financial covenants.
- Legal Contingencies: Monitor the status of the ongoing appeal regarding the PPE customer dispute, where a $653,000 judgment was issued against the Company in the first instance.