Singapore-based JE Cleantech, a cleantech company focused on the manufacturing of precision cleaning systems and provision of centralized dishwashing, announced its H1 2025 results todayOverall Group revenue declined 39.5 per cent compared to the corresponding period last year (H1 2024), caused by the rescheduling of delivery and commissioning of major orders of precision cleaning systems to a later period this yearThe Group maintains a healthy order book value for its cleaning systems and other equipment o ...

Core Insights - JE Cleantech Holdings Ltd reported a revenue of S$19.3 million for the financial year ended December 31, 2024, with a net income of S$0.03 million and adjusted EBITDA of S$2.2 million, reflecting an increase from S$18.0 million in revenue in the previous year [1][2] Financial Performance - The revenue from the sale of cleaning systems and other equipment was S$12.0 million in 2024, up from S$11.0 million in 2023, indicating a growth in this segment [3] - The centralized dishware washing and cleaning services segment generated S$7.3 million in revenue, compared to S$7.0 million in the previous year, showing a year-on-year increase [4] - Gross profit for the Group was S$5.2 million with a gross margin of 26.9%, an improvement from S$4.4 million and 24.2% in the prior year [4] Sales and Orders - The Group secured recurring orders worth over S$7.8 million for precision cleaning systems from a key customer in Singapore during 2024 [3] - There was an increase in sales of S$1 million for precision cleaning systems and S$0.3 million for centralized dishwashing and ancillary services in Singapore [8]

PART I [Key Information](index=4&type=section&id=Item%203.%20Key%20Information) This section outlines principal business and securities risks, including customer concentration, management reliance, stock volatility, and governance as a controlled foreign private issuer [Risk Factors](index=5&type=section&id=D.%20Risk%20Factors) The company faces risks from customer concentration, key management reliance, raw material costs, stock volatility, and governance exemptions - The company has a significant customer concentration risk. In fiscal year 2024, the top five customer groups accounted for approximately **70.1%** of total revenue, with the largest customer group representing **40.4%** of revenue[26](index=26&type=chunk)[28](index=28&type=chunk) - The business is highly dependent on its key management team, especially Ms. Hong Bee Yin, the Chairman, Executive Director, and CEO. The loss of her services could materially and adversely affect the company's business and future plans[38](index=38&type=chunk)[39](index=39&type=chunk) - The company has previously faced delisting risk from Nasdaq for failing to meet the **$1.00** minimum bid price requirement. Although compliance was regained as of August 2024, future non-compliance remains a risk[82](index=82&type=chunk)[83](index=83&type=chunk)[85](index=85&type=chunk) - As a 'controlled company' with CEO Ms. Hong Bee Yin beneficially owning approximately **66.5%** of shares, the company is exempt from certain Nasdaq corporate governance requirements, such as having a majority of independent directors[105](index=105&type=chunk)[106](index=106&type=chunk) - The company is a 'foreign private issuer' and an 'emerging growth company', which allows it to follow home country (Cayman Islands) governance practices and take advantage of reduced reporting requirements, potentially providing less information and protection to investors compared to U.S. domestic issuers[108](index=108&type=chunk)[117](index=117&type=chunk)[119](index=119&type=chunk) [Information on the Company](index=23&type=section&id=Item%204.%20Information%20on%20the%20Company) JE Cleantech operates in industrial cleaning systems and dishwashing services, facing high customer concentration and extensive Singaporean regulations [History and Development of the Company](index=23&type=section&id=History%20and%20Development%20of%20the%20Company) Founded in 1999, the company expanded into cleaning systems and dishwashing, with key milestones including its 2022 Nasdaq IPO and 2023 share consolidation - The company completed its Initial Public Offering on April 22, 2022, raising gross proceeds of approximately **$12 million**[128](index=128&type=chunk) - A **1-for-3** share consolidation was effected on October 13, 2023, to regain compliance with Nasdaq's minimum bid price requirement, reducing outstanding shares from **15,020,000** to **5,006,666**[132](index=132&type=chunk)[133](index=133&type=chunk) - A stock repurchase program of up to **$1,000,000** was authorized on September 6, 2023. As of the report date, **46,406** shares have been repurchased for a total of **US$47,334.12**[136](index=136&type=chunk) [Business Overview](index=26&type=section&id=Business%20Overview) The company operates in cleaning systems (62.1% of FY2024 revenue) and dishwashing services, characterized by high customer concentration and reliance on existing relationships Revenue by Business Segment (FY2022-2024) | Business Segment | 2022 Revenue (SGD thousands) | 2023 Revenue (SGD thousands) | 2024 Revenue (SGD thousands) | % of Total 2024 Revenue | | :--- | :--- | :--- | :--- | :--- | | Sale of cleaning systems and other equipment | 11,400 | 11,000 | 12,000 | 62.1% | | Provision of centralized dishwashing and ancillary services | 7,800 | 7,000 | 7,300 | 37.9% | Top 5 Customer Concentration (% of Total Revenue) | Year | Top 5 Customers' % of Revenue | Largest Customer's % of Revenue | | :--- | :--- | :--- | | 2022 | 68.1% | 22.0% | | 2023 | 66.1% | 24.2% | | 2024 | 75.9% | 40.4% | - The company's business strategy includes expanding its product portfolio with automated and robotic cleaning solutions, such as an autonomous robot floor scrubber, to align with Industry 4.0 trends[235](index=235&type=chunk)[236](index=236&type=chunk)[237](index=237&type=chunk) - All revenue from the sale of cleaning systems and equipment for the fiscal years 2022, 2023, and 2024 was generated from existing customers, highlighting a strong reliance on repeat business[262](index=262&type=chunk)[266](index=266&type=chunk) [Laws And Regulations Relating To Our Business In Singapore](index=48&type=section&id=Laws%20And%20Regulations%20Relating%20To%20Our%20Business%20In%20Singapore) The company's Singapore operations are subject to extensive regulations, including environmental, workplace safety, foreign manpower, and radiation protection laws - The company must hold a cleaning business license under the Environmental Public Health Act (EPHA), which requires meeting specific track record, training, and progressive wage plan requirements for its cleaners[276](index=276&type=chunk)[277](index=277&type=chunk)[278](index=278&type=chunk) - Under the Workplace Safety and Health Act (WSHA), the company has a duty to ensure the safety of its employees and the safe design of the machinery it manufactures, with significant penalties for non-compliance[289](index=289&type=chunk)[290](index=290&type=chunk)[291](index=291&type=chunk) - The employment of foreign workers is regulated by the Employment of Foreign Manpower Act (EFMA), which requires valid work passes and adherence to sector-specific quotas and levies[307](index=307&type=chunk)[308](index=308&type=chunk)[311](index=311&type=chunk) - The company holds a license under the Radiation Protection Act (RPA) for the possession and use of industrial ultrasound apparatus and high-powered lasers in its manufacturing process[285](index=285&type=chunk)[288](index=288&type=chunk) [Operating and Financial Review and Prospects](index=58&type=section&id=Item%205.%20Operating%20and%20Financial%20Review%20and%20Prospects) FY2024 revenue grew 6.9% to SGD 19.3 million, but net income sharply declined due to a 54% surge in G&A expenses, despite improved gross margin and positive operating cash flow [Results of Operations](index=60&type=section&id=Results%20of%20Operations) FY2024 revenue increased 6.9% to SGD 19.3 million, but net income plummeted to SGD 32,000 due to a 54.5% surge in G&A expenses, despite gross profit margin improvement Consolidated Statement of Operations (FY2022-2024, in SGD thousands) | | 2022 (SGD thousands) | 2023 (SGD thousands) | 2024 (SGD thousands) | | :--- | :--- | :--- | :--- | | **Revenues** | **18,631** | **18,032** | **19,279** | | Cost of revenues | (13,503) | (13,666) | (14,085) | | **Gross profit** | **5,128** | **4,366** | **5,194** | | *Gross Profit Margin* | *27.5%* | *24.2%* | *26.9%* | | Total operating expenses | (3,364) | (3,356) | (5,224) | | **Income (loss) from operations** | **1,764** | **1,010** | **(30)** | | **Net income** | **1,192** | **519** | **32** | - Revenue increased by **6.9%** in FY2024, driven by a **SGD 1.8 million** (**26.6%**) increase in sales of precision cleaning systems, particularly to a customer group in Malaysia expanding its production facilities[380](index=380&type=chunk) - General and administrative expenses increased by **SGD 1.8 million** (**54.5%**) in FY2024, primarily due to a revision of the CEO's remuneration package, share-based compensation, and special bonuses for key management[393](index=393&type=chunk)[394](index=394&type=chunk) Adjusted EBITDA (Non-US GAAP, in SGD thousands) | | 2022 (SGD thousands) | 2023 (SGD thousands) | 2024 (SGD thousands) | | :--- | :--- | :--- | :--- | | Net income | 1,192 | 519 | 32 | | Depreciation and amortization | 672 | 702 | 980 | | Interest expense | 336 | 511 | 516 | | Share-based compensation | - | - | 466 | | Income tax expense | 235 | 111 | 250 | | **Adjusted EBITDA** | **2,435** | **1,843** | **2,244** | [Liquidity and Capital Resources](index=75&type=section&id=Liquidity%20and%20Capital%20Resources) As of Dec 2024, the company maintained SGD 15.6 million working capital and SGD 5.7 million cash, with operating cash flow improving to SGD 2.1 million Key Balance Sheet Items (as of Dec 31, in SGD thousands) | | 2023 (SGD thousands) | 2024 (SGD thousands) | | :--- | :--- | :--- | | Cash and cash equivalents | 5,089 | 5,742 | | Accounts receivable, net | 4,775 | 4,488 | | Inventory | 14,073 | 12,644 | | Total current assets | 26,659 | 25,681 | | Total current liabilities | 13,757 | 10,069 | | **Working Capital** | **12,902** | **15,612** | | Total Assets | 35,493 | 35,114 | | Total Liabilities | 18,780 | 18,621 | | Total Shareholders' equity | 16,713 | 16,493 | Consolidated Cash Flows (FY2023-2024, in SGD thousands) | | 2023 (SGD thousands) | 2024 (SGD thousands) | | :--- | :--- | :--- | | Net cash generated from operating activities | 1,375 | 2,053 | | Net cash used in investing activities | (211) | (1,495) | | Net cash (used in)/generated from financing activities | (2,567) | 122 | | **Net change in cash and cash equivalents** | **(1,472)** | **653** | - Average accounts receivable turnover days improved to **87.7 days** in 2024 from **96.7 days** in 2023, while average inventory turnover days remained high at **346.2 days** in 2024, comparable to **346.7 days** in 2023[436](index=436&type=chunk)[442](index=442&type=chunk) [Directors, Senior Management and Employees](index=86&type=section&id=Item%206.%20Directors%2C%20Senior%20Management%20and%20Employees) Led by CEO Ms. Hong Bee Yin, the company's board includes independent directors, with aggregate compensation increasing significantly in 2024 due to CEO remuneration and new committee policies - The company is led by founder Ms. Hong Bee Yin (Chairman, CEO) and Mr. Long Jia Kwang (CFO). The board includes three independent directors: Singh Karmjit, Tay Jingyan, Gerald, and Khoo Su Nee, Joanne[472](index=472&type=chunk) - Total compensation for directors, executive officers, and key employees increased to **SGD 1,490,000** in FY2024 from **SGD 952,000** in FY2023. This was mainly due to a revision in the CEO's remuneration package, share-based compensation, and a special bonus for key management[509](index=509&type=chunk) - The CEO's employment agreement was amended effective January 1, 2024, increasing her total annual remuneration to **SGD 630,000** and revising her performance bonus to a tiered percentage of the Group's profit before tax (PBT)[516](index=516&type=chunk) - The company has established audit, compensation, and nomination committees. Recent charter amendments include adding cybersecurity oversight to the audit committee and a compensation recovery (clawback) policy to the compensation committee charter[495](index=495&type=chunk)[498](index=498&type=chunk)[502](index=502&type=chunk) - As of December 31, 2024, the company had **95** employees, all located in Singapore[526](index=526&type=chunk) [Major Shareholders and Related Party Transactions](index=95&type=section&id=Item%207.%20Major%20Shareholders%20and%20Related%20Party%20Transactions) CEO Ms. Hong Bee Yin controls the company with 66.5% beneficial ownership, influencing major decisions, with significant related party transactions including compensation and dividends Beneficial Ownership (as of Dec 31, 2024) | Name of Beneficial Owner | Ordinary Shares Beneficially Owned | Percent of Class | | :--- | :--- | :--- | | Hong Bee Yin | 3,500,000 | 66.5% | | JE Cleantech Global Limited | 3,200,000 | 60.8% | - Ms. Hong Bee Yin's controlling interest will persist even if the **800,000** shares recently registered for resale are sold, as her ownership would remain at approximately **51.3%**[534](index=534&type=chunk) Related Party Transactions with Controlling Shareholder (FY2024, in SGD thousands) | Transaction Nature | Name | 2024 Amount (SGD thousands) | | :--- | :--- | :--- | | Shares issued as stock-based compensation | Ms. Hong Bee Yin | 466 | | Dividend paid | Ms. Hong Bee Yin | 425 | [Financial Information](index=96&type=section&id=Item%208.%20Financial%20Information) This section directs readers to Item 18 for the company's audited Consolidated Financial Statements - The company's Consolidated Financial Statements are provided under Item 18 of this report[538](index=538&type=chunk) [The Offer and Listing](index=98&type=section&id=Item%209.%20The%20Offer%20and%20Listing) The company's Ordinary Shares began trading on Nasdaq Capital Market under 'JCSE' on April 22, 2022 - The company's Ordinary Shares are listed on the Nasdaq Capital Market under the ticker symbol '**JCSE**'[540](index=540&type=chunk) - The transfer agent for the company's shares is VStock Transfer, LLC[541](index=541&type=chunk) [Additional Information](index=98&type=section&id=Item%2010.%20Additional%20Information) This section details the company's Cayman Islands corporate structure, share rights, and U.S. tax considerations, including PFIC risk and dividend policy - The company is an exempted company incorporated in the Cayman Islands, which provides certain exemptions from standard corporate requirements, such as not having to file an annual return of shareholders with the Registrar[558](index=558&type=chunk)[561](index=561&type=chunk) - The company paid a cash dividend of **US$0.09** per share in December 2024, totaling approximately **SGD 643,000** (**US$471,000**). However, there is no policy for regular future dividend payments[100](index=100&type=chunk)[589](index=589&type=chunk) - The company discusses the risk of being classified as a Passive Foreign Investment Company (PFIC) for U.S. tax purposes. While it does not expect to be a PFIC, it acknowledges that the determination is made annually and is subject to fluctuations in income, assets, and share price[601](index=601&type=chunk)[602](index=602&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=108&type=section&id=Item%2011.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company faces market risks including interest rate, credit (due to customer concentration), liquidity, and foreign exchange risk from USD-SGD fluctuations - The company is exposed to interest rate risk on its short-term bank loans, which are subject to rate changes upon renewal[613](index=613&type=chunk) - Credit risk is a key concern due to the concentration of sales among a few major customers. The company monitors customer creditworthiness to mitigate this risk[614](index=614&type=chunk) - The company faces foreign exchange risk as its reporting currency is the US Dollar, but its operational revenues and costs are primarily in Singapore Dollars (SGD)[616](index=616&type=chunk) PART II [Controls and Procedures](index=109&type=section&id=Item%2015.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2024, with no material weaknesses - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024[620](index=620&type=chunk) - In its assessment of internal control over financial reporting, management determined that there were no control deficiencies that constituted material weaknesses as of December 31, 2024[621](index=621&type=chunk)[622](index=622&type=chunk) [Corporate Governance and Other Disclosures](index=110&type=section&id=Item%2016.%20Corporate%20Governance%20and%20Other%20Disclosures) This section covers audit committee expertise, audit fees, and the company's cybersecurity risk policy, noting no material breaches in 2024 - The Board of Directors has designated Ms. Khoo as the 'audit committee financial expert'[624](index=624&type=chunk) Principal Accountant Fees (USD) | Fee Type | FY 2023 (USD) | FY 2024 (USD) | | :--- | :--- | :--- | | Audit Fees | $128,000 | $128,000 | | All Other Fees | - | - | | **Total** | **$128,000** | **$128,000** | - The company has adopted a cybersecurity risk policy, with oversight provided by the Audit Committee. No material cybersecurity breaches occurred during the year ended December 31, 2024[632](index=632&type=chunk)[633](index=633&type=chunk)[635](index=635&type=chunk) PART III [Financial Statements](index=112&type=section&id=Item%2018.%20Financial%20Statements) This section presents the audited consolidated financial statements for the three-year period ended December 31, 2024, with an unqualified auditor's opinion Consolidated Balance Sheets (As of Dec 31, in SGD thousands) | | 2023 (SGD thousands) | 2024 (SGD thousands) | | :--- | :--- | :--- | | **Total current assets** | **26,659** | **25,681** | | **Total non-current assets** | **8,834** | **9,433** | | **TOTAL ASSETS** | **35,493** | **35,114** | | **Total current liabilities** | **13,757** | **10,069** | | **Total non-current liabilities** | **5,023** | **8,552** | | **TOTAL LIABILITIES** | **18,780** | **18,621** | | **Total shareholders' equity** | **16,713** | **16,493** | | **TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY** | **35,493** | **35,114** | Consolidated Statements of Operations (For the year ended Dec 31, in SGD thousands) | | 2022 (SGD thousands) | 2023 (SGD thousands) | 2024 (SGD thousands) | | :--- | :--- | :--- | :--- | | Revenues | 18,631 | 18,032 | 19,279 | | Gross profit | 5,128 | 4,366 | 5,194 | | Income (loss) from operations | 1,764 | 1,010 | (30) | | **Net income** | **1,192** | **519** | **32** | | **Basic and diluted EPS (SGD)** | **0.25** | **0.10** | **0.00** | Consolidated Statements of Cash Flows (For the year ended Dec 31, in SGD thousands) | | 2022 (SGD thousands) | 2023 (SGD thousands) | 2024 (SGD thousands) | | :--- | :--- | :--- | :--- | | Cash provided by operating activities | (5,239) | 1,375 | 2,053 | | Cash used in investing activities | (797) | (211) | (1,495) | | Cash provided by/(used in) financing activities | 11,487 | (2,567) | 122 | | **Net change in cash and cash equivalents** | **5,453** | **(1,472)** | **653** | | **Cash and cash equivalents at end of year** | **6,561** | **5,089** | **5,742** | [Exhibits](index=142&type=section&id=Item%2019.%20Exhibits) This section lists all exhibits filed with the annual report, including corporate governance documents and officer certifications - The report includes key corporate governance documents as exhibits, such as the Amended Audit Committee Charter, Amended Compensation Committee Charter (which includes the compensation recovery policy), Code of Ethics, and Insider Trading Policy[756](index=756&type=chunk)

Company Overview - JE Cleantech Holdings Limited is based in Singapore and primarily engaged in the sale of cleaning systems and equipment, as well as providing centralized dishwashing and ancillary services [2] - The company operates through its subsidiary, JCS-Echigo Pte Ltd, which designs, develops, manufactures, and sells cleaning systems for various industrial applications, mainly targeting customers in Singapore and Malaysia [2] - The cleaning systems are designed for precision cleaning, featuring technologies such as particle filtration, ultrasonic rinses, high-pressure drying, and deionized water rinses [2] Recent Transaction - JCS-Echigo Pte Ltd has entered into an option to purchase agreement for the sale of its leasehold industrial property in Singapore for SGD7,393,000 (USD5,480,000), with an expected completion date by June 30, 2025 [1] - An initial deposit of SGD369,650 (USD274,000) has been collected, and the sale is expected to yield a net gain of approximately SGD3.7 million (USD2.7 million) over the net book value upon completion [1] - The completion of the sale is contingent upon obtaining consent from the lessor for the sale and transfer of the property [1] Strategic Insights - The CEO, Ms. Elise Hong, indicated that the property was acquired 11 years ago for a centralized dishwashing facility, which has a remaining leasehold period of 19 years [2] - The decision to sell the property was influenced by a favorable purchase offer, and the company believes that consolidating manufacturing and dishwashing operations will lead to cost savings and operational benefits [2]

Company Overview - JE Cleantech Holdings Limited is based in Singapore and primarily engaged in the sale of cleaning systems and other equipment, as well as the provision of centralized dishwashing and ancillary services [2]. Dividend Announcement - The Board of Directors of JE Cleantech Holdings Limited approved a cash dividend of US$0.09 per ordinary share [1]. - The dividend is payable to shareholders of record at the close of business on December 10, 2024, with the expected payment date around December 20, 2024 [1].

Core Viewpoint - JE Cleantech Holdings Limited reported significant growth in revenue and net income for H1 2024 compared to H1 2023, indicating a successful strategy in maintaining and expanding its customer base in the precision cleaning systems and centralized dishwashing business [1][2][3]. Financial Performance - Revenue for H1 2024 increased by 21.9% to S$10.7 million (US$7.9 million) compared to H1 2023 [3]. - Net income rose by 114.3% to S$0.6 million (US$0.4 million) in H1 2024, up from S$0.3 million (US$0.2 million) in H1 2023 [3]. Business Segments - The growth in revenue was driven by a 28.7% increase in sales of cleaning systems and other equipment, alongside an 11.0% increase in the provision of centralized dishwashing and ancillary services [3]. - The company has been focusing on precision cleaning systems, which include advanced features for effective contaminant removal [5]. Strategic Focus - The company aims to continue its trajectory of success by enhancing customer relationships, adapting to market changes, and closely monitoring cost dynamics [4]. - JE Cleantech remains committed to Singapore as a priority market while exploring opportunities in overseas markets [4].

[Overview](index=3&type=section&id=Overview) [Company and Financial Overview](index=3&type=section&id=Overview) The company saw significant growth in H1 2024, with revenue rising to SGD 10.7 million and net income doubling - The Group is principally engaged in the sale of cleaning systems and the provision of centralized dishwashing services in Singapore and Malaysia[5](index=5&type=chunk) Financial Highlights for the Six-Month Periods Ended June 30 | Metric | 2023 (SGD) | 2024 (SGD) | Change | | :--- | :--- | :--- | :--- | | Revenue | 8.8 million | 10.7 million | +21.9% | | Net Income | 0.3 million | 0.6 million | +100% | Statement of Operations Data (Six-Month Periods Ended June 30) | | 2023 (SGD'000) | 2024 (SGD'000) | | :--- | :--- | :--- | | **Revenues** | **8,814** | **10,742** | | Gross profit | 2,098 | 2,834 | | Income from operations | 192 | 567 | | **Net income** | **279** | **598** | [Key Factors Affecting Operations](index=4&type=section&id=Key%20Factors%20Affecting%20the%20Results%20of%20Our%20Group's%20Operations) [Risk Factors and Business Dependencies](index=4&type=section&id=Key%20Factors%20Affecting%20the%20Results%20of%20Our%20Group's%20Operations) Financial performance is influenced by customer concentration, non-recurring revenue, and raw material cost volatility - Dependence on major customers increased, with the **top five customers accounting for 75.9% of revenue** in H1 2024, up from 63.3% in H1 2023[9](index=9&type=chunk) - The sale of cleaning systems is **non-recurring and project-based**, introducing uncertainty in future revenue streams[10](index=10&type=chunk) - Profitability is sensitive to raw material cost fluctuations, as fixed-price contracts limit passing on cost increases[11](index=11&type=chunk) [Management's Discussion and Analysis (MD&A)](index=5&type=section&id=Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) [Revenue Analysis](index=5&type=section&id=Revenue) Total revenue grew 21.9% to SGD 10.7 million, driven by precision cleaning system sales, despite a decline in order backlog - The total revenue increase of approximately **SGD 1.9 million (21.9%)** was mainly due to a SGD 1.6 million increase from the sale of cleaning systems[17](index=17&type=chunk) Revenue by Business Sector (Six-month periods ended June 30) | Business Sector | 2023 (SGD'000) | 2024 (SGD'000) | % of Total (2024) | | :--- | :--- | :--- | :--- | | **Sale of cleaning systems** | **5,426** | **6,981** | **65.0%** | | - Sale of precision cleaning systems | 3,183 | 5,403 | 50.3% | | - Sale of other cleaning systems | 2,015 | 1,230 | 11.5% | | **Centralized dishwashing services** | **3,388** | **3,761** | **35.0%** | | **Total Revenue** | **8,814** | **10,742** | **100.0%** | Movement in Orders Backlog (Cleaning Systems) | | Period ended June 30, 2023 (SGD'000) | Period ended June 30, 2024 (SGD'000) | | :--- | :--- | :--- | | Outstanding contract value (start) | 29,050 | 25,280 | | New contract value | 5,986 | 2,686 | | Revenue recognized | (5,198) | (6,981) | | **Outstanding contract value (end)** | **29,838** | **20,985** | [Cost of Revenues](index=7&type=section&id=Cost%20of%20revenues) Cost of revenues rose to SGD 7.9 million in H1 2024, consistent with revenue growth, led by costs for cleaning systems - The main components of cost of revenues include raw materials, labor costs, sub-contracting costs, and production overhead[21](index=21&type=chunk) Cost of Revenues by Business Sector (Six months ended June 30) | Cost Component | 2023 (SGD'000) | 2024 (SGD'000) | % of Total (2024) | | :--- | :--- | :--- | :--- | | Cost of sale of cleaning systems | 3,796 | 4,615 | 58.4% | | Cost of centralized dishwashing | 2,920 | 3,293 | 41.6% | | **Total Cost of Revenues** | **6,716** | **7,908** | **100.0%** | [Gross Profit and Gross Profit Margin](index=7&type=section&id=Gross%20profit%20and%20gross%20profit%20margin) Gross profit increased to SGD 2.8 million and the overall margin improved to 26.4%, led by the precision cleaning systems segment - The increase in total gross profit was mainly due to higher revenue from the **more profitable precision cleaning systems sub-segment**[24](index=24&type=chunk) Gross Profit and Margin by Business Sector (Six months ended June 30) | Business Sector | Gross Profit 2023 (SGD'000) | Gross Profit Margin 2023 (%) | Gross Profit 2024 (SGD'000) | Gross Profit Margin 2024 (%) | | :--- | :--- | :--- | :--- | :--- | | Sale of precision cleaning systems | 1,083 | 34.0 | 1,943 | 36.0 | | Provision of centralized dishwashing | 468 | 13.8 | 468 | 12.4 | | **Total/Overall** | **2,098** | **23.8** | **2,834** | **26.4** | [Operating Expenses](index=8&type=section&id=Operating%20Expenses) Total operating expenses rose to SGD 2.3 million, driven by higher marketing spend and increased staff costs [Selling and Marketing Expenses](index=8&type=section&id=Selling%20and%20marketing%20expenses) Selling and marketing expenses more than doubled to SGD 86,000 due to increased promotional activities - The increase was primarily attributable to a rise in promotion and marketing activities for the company's products and services[26](index=26&type=chunk) Breakdown of Selling and Marketing Expenses (SGD'000) | Expense Item | H1 2023 | H1 2024 | | :--- | :--- | :--- | | Promotion and marketing expenses | 30 | 70 | | Transportation expenses | 8 | 16 | | **Total** | **38** | **86** | [General and Administrative Expenses](index=8&type=section&id=General%20and%20administrative%20expenses) General and administrative expenses rose to SGD 2.2 million, mainly from higher staff costs due to CEO pay and management bonuses - The increase in staff costs was mainly due to a **revision of the CEO's remuneration package** and a special bonus for key management[29](index=29&type=chunk) Breakdown of General and Administrative Expenses (SGD'000) | Expense Item | H1 2023 | H1 2024 | | :--- | :--- | :--- | | Staff costs | 976 | 1,302 | | Depreciation | 183 | 114 | | Legal and professional fees | 310 | 341 | | **Total** | **1,868** | **2,181** | [Other Income and Expenses](index=9&type=section&id=Other%20income%20(expense)) Net other income increased to SGD 205,000, driven by new interest income and foreign exchange gains - The decrease in government grants was mainly because the Jobs Support Scheme ended, while new income came from fixed deposits and FX gains[36](index=36&type=chunk)[37](index=37&type=chunk) - Interest expense increased slightly due to **higher interest rates on bank loans**[37](index=37&type=chunk) Breakdown of Other Income (SGD'000) | Income Source | H1 2023 | H1 2024 | | :--- | :--- | :--- | | Interest income | - | 107 | | Foreign exchange gain | - | 227 | | Government grants | 307 | 165 | | **Total Other Income** | **463** | **554** | [Income Tax](index=10&type=section&id=Income%20tax) Income tax expense more than doubled to SGD 174,000, in line with the growth in profit and taxable income - The company is subject to income tax in Singapore at a **statutory rate of 17%**, and the tax increase aligned with higher profit[41](index=41&type=chunk)[42](index=42&type=chunk) Breakdown of Income Tax (SGD'000) | Tax Component | H1 2023 | H1 2024 | | :--- | :--- | :--- | | Current tax expense | 74 | 238 | | Deferred tax | - | (64) | | **Total** | **74** | **174** | [Net Income](index=11&type=section&id=Net%20Income%20for%20the%20Period) Net income more than doubled to approximately SGD 0.6 million, driven by strong revenue growth and improved gross margins - Net income increased from approximately **SGD 0.3 million in H1 2023 to SGD 0.6 million in H1 2024**[6](index=6&type=chunk)[43](index=43&type=chunk) [Liquidity and Capital Resources](index=11&type=section&id=Liquidity%20and%20Capital%20Resources) [Cash Flow Analysis](index=11&type=section&id=Cash%20flows) Cash decreased by SGD 0.3 million as operating activities consumed cash, offset by inflows from financing activities - **Net cash used in operating activities was SGD 0.5 million**, a reversal from a SGD 0.7 million inflow in H1 2023, due to working capital changes[48](index=48&type=chunk)[49](index=49&type=chunk) - **Net cash from financing activities was SGD 0.7 million**, mainly from a net drawdown of bank loans[54](index=54&type=chunk)[55](index=55&type=chunk) Summary of Cash Flows (Six months ended June 30, in SGD'000) | Cash Flow Activity | 2023 | 2024 | | :--- | :--- | :--- | | Net cash from/(used in) operating activities | 665 | (527) | | Net cash used in investing activities | (244) | (419) | | Net cash (used in)/from financing activities | (2,045) | 693 | | **Net decrease in cash** | **(1,676)** | **(282)** | | **Cash at end of period** | **4,885** | **4,807** | [Working Capital Management](index=13&type=section&id=Working%20Capital) [Accounts Receivable](index=13&type=section&id=Accounts%20receivable) Net accounts receivable increased slightly to SGD 5.0 million, with improved collection efficiency but higher aged receivables - **Average accounts receivable turnover days decreased from 96.7 to 82.8 days** due to faster customer collections[62](index=62&type=chunk)[63](index=63&type=chunk) Accounts Receivable Ageing Analysis (SGD'000) | Ageing | Dec 31, 2023 | June 30, 2024 | | :--- | :--- | :--- | | Within 30 days | 3,923 | 3,134 | | Between 31 and 60 days | 758 | 1,484 | | More than 90 days | 56 | 307 | | **Total accounts receivable, net** | **4,775** | **4,978** | [Inventory](index=14&type=section&id=Inventory) Inventory levels decreased to SGD 12.9 million, and turnover days improved due to higher sales of precision cleaning systems - **Average inventory turnover days decreased from 346.7 to 311.2 days**, reflecting more efficient inventory management[68](index=68&type=chunk)[69](index=69&type=chunk) Inventory Breakdown (SGD'000) | Category | Dec 31, 2023 | June 30, 2024 | | :--- | :--- | :--- | | Raw materials | 10,136 | 9,795 | | Work-in-progress | 3,062 | 2,259 | | Finished goods | 875 | 844 | | **Total** | **14,073** | **12,898** | [Accounts and Other Payables](index=15&type=section&id=Accounts%20and%20other%20payables) Accounts payable decreased to SGD 1.1 million as the company accelerated payments to suppliers Accounts Payable Turnover | Metric | Dec 31, 2023 | June 30, 2024 | | :--- | :--- | :--- | | Total Accounts Payable (SGD'000) | 1,396 | 1,046 | | Average accounts payable turnover days | 42.4 | 27.1 | [Other Working Capital Items](index=16&type=section&id=Other%20Working%20Capital%20Items) Contract liabilities decreased to SGD 5.1 million, while total bank indebtedness stood at SGD 8.8 million - Contract liabilities decreased to **SGD 5.1 million** as of June 30, 2024, from SGD 7.0 million at year-end 2023[74](index=74&type=chunk) - As of June 30, 2024, **total bank indebtedness was SGD 8.8 million**[75](index=75&type=chunk) - Warranty liabilities remained stable at **SGD 22,000** as of June 30, 2024[76](index=76&type=chunk) [Commitments](index=16&type=section&id=Commitments) [Lease and Capital Commitments](index=16&type=section&id=Commitments) The company has future lease receivables of SGD 250,000 and no capital commitments as of June 30, 2024 - As of June 30, 2024, the Group did not have any capital commitments[80](index=80&type=chunk) Future Minimum Lease Receivables (as Lessor) | Period | Amount (SGD'000) | | :--- | :--- | | Within one year | 193 | | After one but within two years | 57 | | **Total** | **250** | [Capital Expenditures](index=17&type=section&id=Capital%20Expenditures) [Capital Expenditures Analysis](index=17&type=section&id=Capital%20Expenditures) Capital expenditures decreased to SGD 0.1 million in H1 2024, primarily for replacing obsolete equipment - Capital expenditures were approximately **SGD 0.1 million** for H1 2024, down from SGD 0.2 million in the prior-year period[81](index=81&type=chunk) - The expenditures mainly related to the **replacement of obsolete equipment**[81](index=81&type=chunk) [Critical Accounting Policies and Estimates](index=17&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) [Accounting Policies Overview](index=17&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) Financials are prepared under U.S. GAAP, with key estimates in receivables, inventory, and revenue recognition - The company is an "emerging growth company" and has elected to use the **extended transition period for new accounting standards**[83](index=83&type=chunk) - Significant accounting estimates include allowances for receivables, inventory valuation, and asset useful lives[84](index=84&type=chunk) - Revenue is recognized under **ASC Topic 606**, using a five-step model[85](index=85&type=chunk)[86](index=86&type=chunk) [Impact of Inflation](index=18&type=section&id=Impact%20of%20Inflation) [Inflation Impact](index=18&type=section&id=Impact%20of%20Inflation) Moderating inflation in Singapore has not materially affected the company's profitability or operating results to date - The **MAS core inflation moderated to 3.0% y-o-y in Q2 2024**, and has not materially affected the company's results[93](index=93&type=chunk) [Market Risk Disclosures](index=19&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) [Market Risk Factors](index=19&type=section&id=Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is exposed to interest rate, credit, liquidity, and foreign exchange risks, with no hedging in place - The company is exposed to **interest rate risk** on its variable-rate bank loans[94](index=94&type=chunk) - **Credit risk** is managed through credit approvals and monitoring of customer accounts[95](index=95&type=chunk) - **Foreign exchange risk** arises from fluctuations between the SGD and the USD reporting currency, with no hedging transactions[97](index=97&type=chunk) [Financial Statements](index=21&type=section&id=Financial%20Statements) [Unaudited Interim Condensed Consolidated Balance Sheets](index=22&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased slightly to SGD 34.5 million, while lower liabilities led to an increase in shareholders' equity Consolidated Balance Sheet Summary (SGD'000) | | Dec 31, 2023 | June 30, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | **26,659** | **25,711** | | Inventory | 14,073 | 12,898 | | **Total Assets** | **35,493** | **34,538** | | **Total Current Liabilities** | **13,757** | **12,505** | | Contract liabilities | 6,960 | 5,061 | | **Total Liabilities** | **18,780** | **17,256** | | **Total Shareholders' Equity** | **16,713** | **17,282** | [Unaudited Interim Condensed Consolidated Statements of Income](index=24&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statements%20of%20Income%20and%20Comprehensive%20Income) Net income for H1 2024 more than doubled to SGD 598,000, increasing net income per share to SGD 0.12 Consolidated Statement of Income Summary (Six-Month Periods Ended June 30, in SGD'000) | | 2023 | 2024 | | :--- | :--- | :--- | | Revenues | 8,814 | 10,742 | | Gross profit | 2,098 | 2,834 | | Income from operations | 192 | 567 | | **Net income** | **279** | **598** | | **Net income per share (basic and diluted)** | **0.06** | **0.12** | [Unaudited Interim Condensed Consolidated Statements of Changes in Shareholders' Equity](index=25&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Shareholders'%20Equity) Shareholders' equity increased to SGD 17.3 million, driven by net income earned during the period Changes in Shareholders' Equity (H1 2024, in SGD'000) | | Amount | | :--- | :--- | | Balance as of January 1, 2024 | 16,713 | | Net income | 598 | | Foreign currency translation adjustment | (29) | | **Balance as of June 30, 2024** | **17,282** | [Unaudited Interim Condensed Consolidated Statements of Cash Flows](index=26&type=section&id=Unaudited%20Interim%20Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) The company had a net cash outflow of SGD 282,000, as operating cash use was offset by financing inflows Consolidated Statement of Cash Flows Summary (Six-Month Periods Ended June 30, in SGD'000) | | 2023 | 2024 | | :--- | :--- | :--- | | Cash provided by/(used in) operating activities | 665 | (527) | | Cash used in investing activities | (244) | (419) | | Cash (used in)/provided by financing activities | (2,045) | 693 | | **Net change in cash and cash equivalents** | **(1,676)** | **(282)** | [Notes to Financial Statements](index=27&type=section&id=Notes%20to%20Unaudited%20Interim%20Condensed%20Consolidated%20Financial%20Statements) Notes reveal significant customer concentration and that bank loans are secured by company assets and a director's guarantee - The company has **significant customer concentration**, with one customer accounting for 48% of H1 2024 revenue and 60% of receivables[186](index=186&type=chunk)[187](index=187&type=chunk) - Bank loans are secured by a corporate guarantee, company assets, and a **personal guarantee from a director**[161](index=161&type=chunk) Revenue by Segment (H1 2024, SGD'000) | Segment | Revenue | Gross Profit | | :--- | :--- | :--- | | Cleaning Systems | 6,981 | 2,366 | | Dishware Washing Services | 3,761 | 468 | | **Total** | **10,742** | **2,834** |

Group 1 - The Company held its Annual General Meeting (AGM) on September 20, 2024, in Singapore [1] - The members approved the appointment of six new Board of Directors for the upcoming year [2] - The appointment of WWC, P.C. as the independent registered public accounting firm for the fiscal year ending December 31, 2024, was ratified [3] Group 2 - JE Cleantech Holdings Limited is engaged in the sale of cleaning systems and equipment, as well as providing centralized dishwashing and ancillary services [4] - The Company designs, develops, manufactures, and sells cleaning systems primarily for industrial applications in Singapore and Malaysia [4] - Its cleaning systems feature advanced technologies such as particle filtration, ultrasonic rinses, high-pressure drying, and deionized water rinses to effectively remove contaminants [4] - The Company has been providing centralized dishwashing services since 2013 and general cleaning services since 2015, mainly for food and beverage establishments in Singapore [4]

Company Overview - JE Cleantech Holdings Limited is based in Singapore and primarily engaged in the sale of cleaning systems and equipment, as well as providing centralized dishwashing and ancillary services [4] - The company designs, develops, manufactures, and sells cleaning systems for various industrial applications, mainly targeting customers in Singapore and Malaysia [4] - Its cleaning systems feature advanced technologies such as particle filtration, ultrasonic rinses, high-pressure drying, and deionized water rinses, aimed at effective contaminant removal [4] Stock Repurchase Program - The Board of Directors has authorized a stock repurchase program of up to $1,000,000 for the company's outstanding Ordinary Shares [5] - As of July 19, 2024, the company had repurchased 38,406 shares at an average price of $1.02, totaling approximately $39,175 [5] - The remaining amount available for repurchase is up to $960,825 of the company's Ordinary Shares [5] Management's Perspective - The continuation of the stock repurchase program reflects the Board's and management's confidence in the company's future growth prospects and long-term value [3]

Company Overview - JE Cleantech Holdings Limited is based in Singapore and primarily engaged in the sale of cleaning systems and equipment, as well as providing centralized dishwashing and ancillary services [2] - The company designs, develops, manufactures, and sells cleaning systems for various industrial applications, mainly targeting customers in Singapore and Malaysia [2] - Its cleaning systems feature advanced technologies such as particle filtration, ultrasonic rinses, high-pressure drying, and deionized water rinses, aimed at effective contaminant removal [2] Delisting Announcement - The company received a Determination Letter from Nasdaq indicating that its Ordinary Shares would be delisted effective June 26, 2024, due to non-compliance with Listing Rule 5550(a)(2) [8][9] - The company's bid price had closed below $1 per share for 30 consecutive business days, failing to meet the compliance requirements [8] - The company was given a 180-day period to regain compliance, which ended on June 11, 2024, but it did not meet the necessary criteria [6][8] Appeal Process - The company has submitted a request for an oral hearing to appeal the delisting decision and has paid a hearing fee of $20,000 [9] - Following the submission of the hearing request, the company's Ordinary Shares will continue to trade on Nasdaq until a final determination is made [9] Management's Response - The CEO of JE Cleantech, Ms. HONG Bee Yin, acknowledged the importance of Nasdaq listing for shareholder value and expressed commitment to improving performance to meet listing standards [4]