KBS Fashion Group Limited Announces Full Year 2015 Financial Results
(firmenpresse) - SHISHI, CHINA -- (Marketwired) -- 05/02/16 -- KBS Fashion Group Limited (NASDAQ: KBSF) ("KBS" or the "Company"), a leading fully-integrated casual menswear company in China, today announced its financial results for the fiscal year ended December 31, 2015.
Total revenues increased by 4.3% to $61.3 million primarily due to increased sales from corporate owned stores and OEM.
Gross profit decreased by 23.6% to $14.8 million and gross margin decreased by 8.8 percentage points to 24.2%. The decrease in gross profit and gross margin were results of decreased in unit sales price and reduction in sales discount offered to new sales.
Net income was $1.2 million, or $0.05 per share, compared to $6.9 million, or $0.27 per share, for the same period of last year.
Mr. Keyan Yan, Chairman and Chief Executive Officer of KBS, commented, "Our 2015 financial results were negatively impacted by weakening market conditions of the China economy and the apparel industry as well. Despite these headwinds, we managed to grow our top line by 4.3% as we added distribution channels from wholesales to multi-branded stores, Wechat shops, internationals orders and OEM while closed some of the unprofitable franchised stores and corporate owned stores. Looking ahead, we remain cautious about our outlook amidst macro challenges and will actively seek opportunities to grow our business through development of new distribution channels, geographical expansion, brand promotion, and strategic partnerships."
Revenues
Total revenues increased by $2.5 million, or 4.3%, to $61.3 million for the twelve months ended December 31, 2015 from $58.8 million for the same period of last year. The increase was primarily related to revenues from corporate stores sales and OEM.
Revenues from the Company''s distribution network increased by $0.2 million, or 0.4%, to $40.8 million for the twelve months ended December 31, 2015 from $40.7 million for the same period of last year. The Change reflected increased sales from new wholesale distributors that were partially offset decreased sales from old distributors. Distribution network contributed 66.5% of total revenues for the twelve months ended December 31, 2015, compared to 69.1% for the same period of last year. The Company''s distributor network consisted of 33 distributors in 16 provinces during the year of 2015. Most of these distributors, either directly or through their sub-distributors, operate KBS-branded stores. Some wholesale distributors sold the products to multi-branded stores and online stores. As of December 31, 2015, the Company operated 69 franchised stores operated by 25 third party distributors or their sub-distributors, compared to 84 franchised stores at the end of 2014.
Revenues from corporate stores sales increased by $2.0 million, or 12.1%, to $18.1 million for the twelve months ended December 31, 2015 from $16.1 million for the same period of last year. The increase in corporate stores sales was a result of promotional sales aimed at promoting our brand. Corporate stores accounted for 29.5% of total revenues for the twelve months ended December 31, 2015, compared to 27.4% for the same period of last year. As of December 31, 2015, the Company operated 2 corporate stores, compared to 18 corporate stores at the end of 2014.
Revenues from OEM sales increased by $0.4 million, or 19.2%, to $2.4 million for the twelve months ended December 31, 2015 from $2.0 million for the same period of last year. This increase was due to increase in unit price due to improvement in fabrics quality and workmanship. OEM accounted for 4.0% of total revenues for the twelve months ended December 31, 2015, compared to 3.5% for the same period of last year. The OEM segment is comprised of products that are designed by the customers and manufactured by the Company.
Cost of revenues and gross profit
Total cost of revenues increased by $7.1 million, 18.0%, to $46.5 million for the twelve months ended December 31, 2015 from $39.4 million for the same period of last year. The increase was related to reduction in discounts offered to sales to multi-branded stores, online stores, and wholesaler distributors.
Total gross profit decreased by $4.6 million, or 23.6%, to $14.8 million for the twelve months ended December 31, 2015 from $19.4 million for the same period of last year. Gross profits for distribution network, corporate stores and OEM were $9.7 million, $4.2 million, and $0.9 million, respectively, for the twelve months ended December 31, 2015, compared to $12.4 million, $6.3 million, and $0.7 million, respectively, for the same period of last year.
Overall gross margin was 24.2% for the twelve months ended December 31, 2015, compared to 33.0% for the same period of last year. On a segment basis, gross margins for distribution network, corporate stores and OEM were 23.7%, 23.4%, and 38.3%, respectively, for the twelve months ended December 31, 2015, compared to 30.5%, 39.2%, and 34.5%, respectively, for the same period of last year.
Operating expenses
Selling and distribution expenses decreased by $0.6 million, or 7.9%, to $6.6 million for the twelve months ended December 31, 2015 from $7.2 million for the same period of last year. Administrative expenses decreased by $1.9 million, or 39.8%, to $2.8 million for the twelve months ended December 31, 2015 from $4.6 million for same period of last year. The decrease in selling and distribution expenses and administrative expenses was mainly associated with reduction in staff salary. Other operating expenses, including other income and other gains and loss, totaled $3.6 million for the twelve months ended December 31, 2015, compared to $1.8 million for the same period of last year. The increase in other operating expenses was primarily due to impairment on prepayment for land use rights in Anhui and provision for bad debt related to three clients.
Total operating expense decreased by $0.6 million, or 4.6%, to $13.0 million for the twelve months ended December 31, 2015 from $13.6 million for the same period of last year.
Total income from operations decreased by $4.0 million, or 68.3%, to $1.8 million for the twelve months ended December 31, 2015 from $5.8 million for the same period of last year. Operating margin was 3.0% for the twelve months ended December 31, 2015, compared to 9.8% for the same period of last year.
Net income
Net Income decreased by $5.6 million, or 81.9%, to $1.2 million for the twelve months ended December 31, 2015 from $6.9 million for same period of last year. Basic and diluted earnings per share were $0.05 for the twelve months ended December 31, 2015, compared to $0.27 for the same period of last year.
As of December 31, 2015, the Company had cash and cash equivalents of $21.2 million, working capital of $53.6 million and stockholders'' equity of $100.8 million, compared to $20.6 million, $52.7 million, and $105.6 million at December 31, 2014.
Net cash provided by operating activities was $2.6 million for the twelve months ended December 31, 2015, compared to net cash used in operating activities of $3.3 million for the same period of last year. Net cash used in investing activities was $0.9 million in the twelve months ended December 31, 2015, compared to $17.5 million for the same period of last year. Net cash used in financing activities was nil for the twelve months ended December 31, 2015, compared to $2.0 million for the same period of last year.
Headquartered in Shishi, China, KBS Fashion Group Limited, through its subsidiaries, is engaged in the business of designing, manufacturing, selling and distributing its own casual menswear brand, KBS, through a network of 69 KBS stores and over a number of multi-brand stores. To learn more about the Company, please visit its corporate website at .
This press release may contain certain "forward-looking statements" relating to the business of KBS Fashion Group Limited, and its subsidiary companies. All statements, other than statements of historical fact included herein, are "forward-looking statements" in nature within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involve known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and these expectations may prove to be incorrect. Investors should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company''s actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including those discussed in the Company''s periodic reports that are filed with the Securities and Exchange Commission and available on its website (). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these factors. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.
Mr. Themis Kalapotharakos
Director
T: +306932284718
E:
Ms. Lisa Tu
Chief Financial Officer
T: +86 158-5972-2469
E:
Ms. Tina Xiao
Weitian Group LLC
T: +1 917-609-0333
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Datum: 02.05.2016 - 16:18 Uhr
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