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      Chanson International Holding Announces First Half of Fiscal Year 2024 Financial Results


      News provided by

      Chanson International Holding

      Sep 27, 2024, 16:05 ET

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      URUMQI, China, Sept. 27, 2024 /PRNewswire/ -- Chanson International Holding (Nasdaq: CHSN) (the "Company" or "Chanson"), a provider of bakery, seasonal, and beverage products through its chain stores in China and the United States, today announced its unaudited financial results for the six months ended June 30, 2024.

      Mr. Gang Li, Chairman of the Board of Directors and Chief Executive Officer of the Company, commented, "In the first half of fiscal year 2024, despite facing various challenges, we have shown resilience and adaptability in a dynamic market. While we experienced a slight decline in revenue, we have successfully maintained our gross margins at above 40%, by enforcing cost control measures and enhancing operating efficiency. Additionally, with an increased cash reserve as of June 30, 2024, we are in a solid position to manage market uncertainties. As we move forward, we remain confident in our long-term growth strategy and execution capabilities. Our expansion initiatives in both the United States and China are expected to remain a key focus of our growth. We aim to drive revenue by attracting new customers and encouraging repeat business from existing ones. Specifically, this is expected to be achieved by strengthening opportunistic purchasing, optimizing inventory management, maintaining strong store conditions, and effectively marketing both current and new product offerings. We believe that with all those efforts in place, we will navigate short-term headwinds and return to long-term growth in the near future." 

      First Half of Fiscal Year 2024 Financial Summary

      • Total revenue was $7.5 million, compared to $8.8 million for the same period of last year.
      • Gross profit was $3.1 million, compared to $4.3 million for the same period of last year.
      • Gross margin was 41.5%, compared to 49.2% for the same period of last year.
      • Net income was $0.02 million, compared to $0.3 million for the same period of last year.
      • Basic and diluted earnings per share were $0.002, compared to $0.027 for the same period of last year.

      First Half of Fiscal Year 2024 Financial Results

      Revenue

      Total revenue was $7.5 million for the six months ended June 30, 2024, which decreased by 14.4%, from $8.8 million for the same period of last year. The decrease in revenue was due to decreased revenue from both the stores in China (the "China Stores") and the stores in the United States (the "United States Stores").

      China Stores

      • Revenue from the China Stores was $6.5 million for the six months ended June 30, 2024, which decreased by or 7.3%, from $7.0 million for the same period of last year. The decrease was mainly due to the decreased revenue from bakery products as well as from other products.
      • Revenue from bakery products was $5.9 million for the six months ended June 30, 2024, which decreased by 7.3%, from $6.4 million for the same period of last year. The post-COVID-19 economy in China has recovered at a slower pace than expected, and the spending behavior of consumers has been affected by various factors, such as the economic downward pressure and lack of consumer confidence. As a result, revenue from bakery products decreased due to the decline in average spending per customer and the consumption downgrade during the six months ended June 30, 2024.
      • Revenue from other products was $0.58 million for the six months ended June 30, 2024, which decreased by 7.0%, from $0.62 million for the same period of last year. The decrease was mainly due to decreased revenue from seasonal products, which was partially offset by increased revenue from beverage products. Revenue from seasonal products was $0.36 million for the six months ended June 30, 2024, which decreased by 16.4% from $0.44 million for the same period of last year. The decrease was due to the consumption downgrade as mentioned above. The average spending per customer declined because customers preferred lower-priced seasonal products during the six months ended June 30, 2024. Revenue from beverage products was $0.22 million for the six months ended June 30, 2024, an increase by 14.8% from $0.19 million for the same period of last year, mainly due to increased revenue from freshly brewed coffee products, as the China Stores are focusing on expanding the business of coffee beverages and more coffee bakery stores were opened in the six months ended June 30, 2024.

      United States Stores

      • Revenue from the U.S. Stores was $1.0 million for the six months ended June 30, 2024, which decreased by 42.2% from $1.8 million for the same period of last year. The decrease was mainly due to decreased revenue from beverage products and eat-in services, which was partially offset by the slightly increased revenue from bakery products.
      • Revenue from bakery products remained relatively stable at $0.24 million for the six months ended June 30, 2024, with a slight increase by 2.6% from $0.23 million for the same period of last year. The increase was due to the increased revenue from bakery products of approximately $0.1 million, generated by Chanson 3rd Ave and Chanson Broadway. The increase in revenue from bakery products was partially offset by the decreased revenue from Chanson Greenwich of approximately $0.09 million. Many famous bakery brands have opened new stores in New York City, customers now have more choices and revenue from bakery products of Chanson 23rd Street and Chanson Greenwich were affected. With the increased competition, Chanson Greenwich closed its business operation in the second half of fiscal year 2023.
      • Revenue from beverage products was $0.6 million for the six months ended June 30, 2024, which decreased by 37.2% from $1.0 million for the same period of last year, primarily due to the closure of Chanson Greenwich as mentioned above. The decrease was also attributable to increased competition from rivals operating in the same area. After the cocktail bars of the United States Stores launched several new types of cocktail products with new flavors and styles, such products became popular among customers and the cocktail bars were often fully booked by reservation. However, the rivals operating in the same area also launched many types of attractive cocktail products, so customers currently have more choices, and revenue from beverage products were adversely affected during the six months ended June 30, 2024.
      • Revenue from eat-in services was $0.2 million for the six months ended June 30, 2024, which decreased by 69.7% from $0.6 million for the same period of last year. The decrease was mainly due to the decreased revenue from Chanson Greenwich of approximately $0.4 million as a result of the closure of its business as mentioned above. Moreover, the decrease was due to the slightly decreased revenue from Chanson 23rd Street of approximately $0.01 million, as Chanson 23rd Street adjusted its menu items and customers were adjusting to the new products. The decrease in revenue from eat-in services was partially offset by increased revenue from eat-in services of approximately $0.02 million, generated by Chanson 3rd Ave and Chanson Broadway.

      Gross Profit and Gross Margin

      Gross profit was $3.1 million for the six months ended June 30, 2024, which decreased by 27.8% from $4.3 million for the same period of last year. Gross margin was 41.5% for the six months ended June 30, 2024, which decreased by 7.7% points from 49.2% for the same period of last year.

      Operating Expenses

      Operating expenses were $3.7 million for the six months ended June 30, 2024, compared to $4.2 million for the same period of last year.

      • Selling expenses were $2.2 million for the six months ended June 30, 2024, which decreased by 8.7%, from $2.4 million for the same period of last year. The decrease was mainly due to decreased selling expenses of approximately $0.2 million incurred by Chanson Greenwich, as Chanson Greenwich was closed in the second half of fiscal year 2023. The decrease in selling expenses was partially offset by increased selling expenses of approximately $0.07 million generated by the Chanson 3rd Ave and Chanson Broadway, the new stores opened in March 2023 and July 2023, respectively.
      • General and administrative expenses were $1.5 million for the six months ended June 30, 2024, which decreased by 17.9% from $1.8 million for the same period of last year. The decrease was primarily due to the closure of Chanson Greenwich as mentioned above.

      Net Income

      Net income was $0.02 million for the six months ended June 30, 2024, compared to $0.28 million for the same period of last year.

      Basic and Diluted Earnings per Share

      Basic and diluted earnings per share were $0.002 for the six months ended June 30, 2024, compared to $0.027 for the same period of last year.

      Balance Sheet

      As of June 30, 2024, the Company had cash of $4.1 million, compared to $1.5 million as of December 31, 2023.

      Cash Flow

      Net cash provided by operating activities was $0.8 million for the six months ended June 30, 2024, compared to $0.6 million for the same period of last year.

      Net cash provided by investing activities was $1.4 million for the six months ended June 30, 2024, compared to net cash used in $11.3 million for the same period of last year.

      Net cash provided by financing activities was $0.4 million for the six months ended June 30, 2024, compared to $9.7 million for the same period of last year.

      About Chanson International Holding

      Founded in 2009, Chanson International Holding is a provider of bakery, seasonal, and beverage products through its chain stores in China and the United States. Headquartered in Urumqi, China, Chanson directly operates stores in Xinjiang, China and New York, United States. Chanson currently manages 46 stores in China, and three stores in New York City while selling on digital platforms and third-party online food ordering platforms. Chanson offers not only packaged bakery products but also made-in-store pastries and eat-in services, serving freshly prepared bakery products and extensive beverage products. Chanson aims to make healthy, nutritious, and ready-to-eat food through advanced facilities based on in-depth industry research, while creating a comfortable and distinguishable store environment for customers. Chanson's dedicated and highly-experienced product development teams constantly create new products that reflect market trends to meet customer demand. For more information, please visit the Company's website: http://ir.chanson-international.net/.

      Forward-Looking Statements

      Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company's current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as "approximates," "believes," "hopes," "expects," "anticipates," "estimates," "projects," "intends," "plans," "will," "would," "should," "could," "may" or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company's registration statement and other filings with the U.S. Securities and Exchange Commission.

      For investor and media inquiries, please contact:

      Chanson International Holding
      Investor Relations Department
      Email: [email protected] 

      Ascent Investor Relations LLC
      Tina Xiao
      Phone: +1-646-932-7242
      Email: [email protected] 

      CHANSON INTERNATIONAL HOLDING AND SUBSIDIARIES

      UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS




      June 30,



      December 31,




      2024



      2023 (Audited)


      ASSETS







      CURRENT ASSETS:







      Cash and cash equivalents


      $

      4,107,830



      $

      1,481,302


      Accounts receivable



      2,022,587




      1,995,067


      Inventories



      785,327




      723,905


      Long term loan to a third-party, current



      1,999,507




      -


      Prepaid expenses and other current assets



      4,287,721




      5,134,173





      13,202,972




      9,334,447











      NON-CURRENT ASSETS:









      Operating lease right-of-use assets



      12,922,888




      13,059,561


      Property and equipment, net



      5,006,112




      5,462,063


      Intangible assets, net



      140,625




      150,000


      Long term security deposits



      843,793




      894,715


      Prepayment for the software, equipment and product development



      140,000




      790,000


      Long term debt investment



      6,359,014




      6,534,575


      Long term loan to a third-party



      -




      2,066,822


      Long term prepaid expenses



      108,313




      142,113





      25,520,745




      29,099,849











      TOTAL ASSETS


      $

      38,723,717



      $

      38,434,296











      LIABILITIES









      CURRENT LIABILITIES:









      Short-term bank loans


      $

      3,086,939



      $

      2,683,692


      Accounts payable



      2,120,980




      1,919,189


      Due to a related party



      46,675




      48,042


      Taxes payable



      77,015




      96,176


      Deferred revenue



      7,338,357




      7,085,696


      Operating lease liabilities, current



      2,448,062




      2,198,192


      Other current liabilities



      620,251




      697,702





      15,738,279




      14,728,689











      NON-CURRENT LIABILITIES









      Operating lease liabilities, non-current



      10,931,463




      11,691,251





      10,931,463




      11,691,251











      TOTAL LIABILITIES



      26,669,742




      26,419,940











      COMMITMENTS AND CONTINGENCIES


















      SHAREHOLDERS' EQUITY









      Ordinary shares, $0.001 par value, 50,000,000 shares authorized; 12,425,319 shares
      issued and outstanding as of June 30, 2024 and December 31, 2023, respectively:









      Class A ordinary share, $0.001 par value, 44,000,000 shares authorized; 6,755,319
      shares and 6,485,319 shares issued and outstanding as of June 30, 2024 and
      December 31, 2023, respectively



      6,755




      6,485


      Class B ordinary share, $0.001 par value, 6,000,000 shares authorized; 5,670,000 and
      5,940,000 shares issued and outstanding as of June 30, 2024 and December 31, 2023,
      respectively



      5,670




      5,940


      Additional paid-in capital



      11,800,472




      11,800,472


      Statutory reserve



      447,231




      447,231


      Accumulated deficit



      (126,842)




      (150,254)


      Accumulated other comprehensive loss



      (79,311)




      (95,518)


      TOTAL SHAREHOLDERS' EQUITY



      12,053,975




      12,014,356











      TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY


      $

      38,723,717



      $

      38,434,296


      CHANSON INTERNATIONAL HOLDING AND SUBSIDIARIES

      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND

      COMPREHENSIVE INCOME (LOSS)




      For the Six Months Ended
      June 30,




      2024



      2023


      REVENUE


      $

      7,542,682



      $

      8,811,287


      COST OF REVENUE



      4,415,407




      4,478,716


      GROSS PROFIT



      3,127,275




      4,332,571











      OPERATING EXPENSES









      Selling expenses



      2,230,905




      2,444,292


      General and administrative expenses



      1,456,499




      1,774,419


      Total operating expenses



      3,687,404




      4,218,711











      (LOSS) INCOME FROM OPERATIONS



      (560,129)




      113,860











      OTHER INCOME (EXPENSE)









      Interest (expense) income, net



      (25,278)




      14,007


      Other income (loss), net



      314,670




      (11,843)


      Interest income from long term debt investment



      359,014




      171,616


      Total other income, net



      648,406




      173,780











      PROFIT BEFORE INCOME TAX EXPENSE



      88,277




      287,640











      INCOME TAX EXPENSE



      (64,865)




      (2,880)


      NET INCOME



      23,412




      284,760


      Foreign currency translation gain (loss)



      16,207




      (305,867)











      TOTAL COMPREHENSIVE INCOME (LOSS)


      $

      39,619



      $

      (21,107)











      Earnings per ordinary share - basic and diluted                                                                


      $

      0.002



      $

      0.027


      Weighted average shares - basic and diluted



      12,425,319




      10,666,906


      CHANSON INTERNATIONAL HOLDING AND SUBSIDIARIES

      UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS




      For the Six Months Ended
      June 30,




      2024



      2023


      Cash flows from operating activities:







      Net income


      $

      23,412



      $

      284,760


      Adjustments to reconcile net income to net cash provided by operating activities:









      Amortization of operating lease right-of-use assets



      1,697,141




      1,422,155


      Depreciation



      445,787




      402,784


      Impairment loss on property and equipment



      -




      5,434


      Accrued interest income from long term debt investment



      (359,014)




      (171,616)


      Interest income from loan to a third-party



      (44,877)




      (21,452)


      Changes in operating assets and liabilities:









      Accounts receivable



      (40,507)




      (772,933)


      Inventories



      (65,027)




      88,841


      Prepaid expenses and other current assets



      286,121




      73,944


      Long term security deposits



      49,350




      (17,375)


      Long term prepaid expenses



      32,953




      21,534


      Accounts payable



      213,875




      216,032


      Taxes payable



      (19,020)




      (109,830)


      Deferred revenue



      299,816




      522,418


      Other current liabilities



      (79,738)




      35,633


      Operating lease liabilities



      (1,634,128)




      (1,370,175)


      Net cash provided by operating activities



      806,144




      610,154











      Cash flows from investing activities:









      Purchase of property and equipment



      (34,268)




      (152,022)


      Proceeds from disposal of property and equipment



      34,562




      -


      Payment made for long term debt investment



      -




      (6,000,000)


      Interest income received from long term debt investment



      534,575




      -


      Advance of loans to third parties



      -




      (3,900,000)


      Repayment from loans to third parties



      862,088




      -


      Prepayment for the software, equipment and product development



      -




      (1,200,000)


      Net cash provided by (used in) investing activities



      1,396,957




      (11,252,022)











      Cash flows from financing activities:









      Gross proceeds from initial public offerings



      -




      13,560,000


      Direct costs disbursed from initial public offerings proceeds



      -




      (1,529,631)


      Proceeds from short-term bank loans



      422,095




      -


      Payments made to a related party



      (56,298)




      (1,612,215)


      Payments made for deferred offering costs



      -




      (312,125)


      Prepayment for the related service after listing



      -




      (450,000)


      Net cash provided by financing activities



      365,797




      9,656,029











      Effect of exchange rate fluctuation on cash and cash equivalents



      57,630




      (457,647)











      Net increase (decrease) in cash and cash equivalents



      2,626,528




      (1,443,486)


      Cash and cash equivalents, beginning of period



      1,481,302




      2,915,470


      Cash and cash equivalents, end of period


      $

      4,107,830



      $

      1,471,984











      Supplemental cash flow information









      Cash paid for income taxes


      $

      40,889



      $

      9,436


      Cash paid for interest


      $

      68,450



      $

      8,364











      Non-cash operating, investing and financing activities









      Reduction of right-of-use assets and operating lease obligations due to early termination
      of lease agreement


      $

      60,277



      $

      -


      Right of use assets obtained in exchange for operating lease liabilities


      $

      1,697,141



      $

      1,103,383


      Deferred IPO cost offset with additional paid-in capital


      $

      -



      $

      1,059,521


      SOURCE Chanson International Holding

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