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China Jo-Jo Drugstores Announces Fourth Quarter and Year End Financial Results for Fiscal Year 2015

Q4 Revenue grew 30.1%, EPS jumped to $0.03/share from Losses of $1.01/share
FY 2015 Online Pharmacy Sales Increased 96.8%, Gross Profit up 117.2% and EPS Improved to $0.06 from Losses of $1.83
China Jo-Jo Drugstores
2015-06-29 21:15 3086


HANGZHOU, China, June 29, 2015 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (NASDAQ CM: CJJD) (the "Company" or "China Jo-Jo"), a leading China-based retail and wholesale distributor of pharmaceutical and health care products through its own online and retail pharmacies, today announced financial results for the fourth quarter and fiscal year ended March 31, 2015.

FY 2015 Fourth Quarter Highlights:

  • Revenue increased 30.1% to $20,982,649 for the fourth quarter ended March 31, 2015 as compared to $16,129,575 during the same period last year.
  • Q4 Gross profit increased to $3,341,109 as opposed to a loss of $1,001,170 for the same quarter last year
  • Q4 net income increased by $14,985,454 to $519,423 during the three months ended March 31, 2015, a significant improvement from a net loss of $14,466,031 in the fourth quarter of last year
  • Q4 earning per share (EPS) increased to $0.03/share from EPS of $(1.01) for the same quarter last year

Fiscal Year 2015 Highlights:

  • Total revenue increased by $10,741,145 or 16.2% for the year ended March 31, 2015 as compared to the previous fiscal year
  • Retail drugstores sales increased by $ 8,702,955 or 21.7%, for the year ended March 31, 2015, as compared to the previous fiscal year
  • Online pharmacy sales increased 96.8% over FY 2014, to a record revenue of $14,879,397, which accounts for approximately 19.4% of the company's overall sales
  • Gross profit increased by $6,710,539, or 117.2% year over year, while gross margin essentially doubled from 8.7% of FY 2014 to 16.2% of FY 2015
  • Net income increased to $855,628, and EPS jumped to $0.06/share during FY 2015, from a net loss of $25,356,170 and EPS of ($1.83)/share
  • The company ended the year with cash and restricted cash balance of $13,015,682, $59.5 million in total assets, and $42.3 million in total liabilities

Revenue increase during FY 2015 was mainly due to the expansion of the Company's retail drugstores and online pharmacy business. Retail drugstores sales, which accounted for approximately 63.5% of total revenue, increased by approximately $8.7 million, of which a 21.2% increase in same-store sales contributed approximately $8.0 million while new stores sales contributed approximately $1.1million.

Online pharmacy sales reached $14,879,397, an increase of 96.8% over the previous year, thanks to a series of online marketing efforts, plus China Jo-Jo expanded their presence on e-commerce platforms, like Taobao, JD.com and Amazon.com. The Company also signed a service agreement with Alipay (China) Internet Technology Ltd. ("Alipay") to incorporate Alipay's online payment service ("Alipay Service") into its online stores. This move gave China Jo-Jo access to Alipay's 300 million registered users. Furthermore, the Company reached an agreement with Shanghai Jianbao Technology Co., Ltd. ("Shanghai Jianbao"), a leader in China's Pharmacy Benefit Management (PBM) sector, to set up a new joint venture that strengthened China Jo-Jo's cooperation with large insurance companies in China.

Mr. Lei Liu, Chairman and CEO of the Company stated, "We are thrilled to close out fiscal year 2015 with a stellar fourth quarter performance.  Our official online pharmacy, www.dada360.com, experienced more than 3 times revenue growth year over year thanks to our strategic partnership with China's leading Pharmacy Benefit Management (PBM) provider and insurance companies. After almost two years of company's restructure of which our management has shifted focuses and resources to higher growth and high margin market segment, we believe FY 2015 was a major turning point for China Jo-Jo.  We not only achieved probability from last two years' of major losses, but also regained the trust of our loyal customers and shareholders.

"As we accelerate our growth into 2016 and beyond, we believe our e-commerce sales will one day surpass the sales from our traditional offline pharmacy business. By leveraging our online presence, China Jo-Jo aims to become a nationally recognized pharmacy chain and a leading player in the online drugstore marketspace in China."

 

CHINA JO-JO DRUGSTORES, INC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS








March 31,

March 31,


2015

2014

A S S E T S










CURRENT ASSETS




Cash

$

4,023,581

$

4,445,276

Restricted cash

8,992,101


3,114,543

Financial assets available for sale

1,307,200



Notes receivable

138,952


-

Trade accounts receivable, net

9,237,743


6,734,536

Inventories

10,538,591


7,047,397

Other receivables, net

1,130,264


149,546

Advances to suppliers, net

4,717,352


4,577,194

Other current assets

2,200,838


1,663,102

Total current assets

42,286,622


27,731,594








PROPERTY AND EQUIPMENT, net

7,056,781


9,412,688








OTHER ASSETS






Farmland assets

1,704,359


1,371,735

Long term deposits

2,584,025


2,786,437

Other noncurrent assets

2,734,798


3,036,930

Intangible assets, net

3,142,003


1,569,443

Total other assets

10,165,185


8,764,545








Total assets

$

59,508,588

$

45,908,827








L I A B I L I T I E S  A N D  S T O C K H O L D E R S'  E Q U I T Y














CURRENT LIABILITIES






Short-term loan payable

$

32,680

$

162,300

Accounts payable, trade

15,915,915


14,554,726

Notes payable

15,752,969


7,820,718

Other payables

2,931,869


1,282,211

Other payables - related parties

2,729,740


2,384,294

Loan from third parties

-


294,042

Customer deposits

3,759,050


3,185,885

Taxes payable

328,111


373,501

Accrued liabilities

509,537


1,208,242

Total current liabilities

41,959,871


31,265,919








Purchase option and warrant liability

315,327


278,916

Total liabilities

42,275,198


31,544,835








COMMITMENTS AND CONTINGENCIES














STOCKHOLDERS' EQUITY






Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and outstanding as of March 31, 2015 and 2014

-


-

Common stock; $0.001 par value; 250,000,000 shares authorized; 15,650,504 and 14,416,022 shares issued and outstanding as of March 31, 2015 and 2014

15,651


14,416

Additional paid-in capital

19,301,233


17,355,555

Statutory reserves

1,309,109


1,309,109

Accumulated deficit

(7,404,210)


(8,260,767)

Accumulated other comprehensive income

3,972,543


3,905,136

Total stockholders' equity

17,194,326


14,323,449








Noncontrolling interests

39,064


40,543

Total equity

17,233,390


14,363,992








Total liabilities and stockholders' equity

$

59,508,588

$

45,908,827

 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)





For the years ended
March 31,


2015

2014

REVENUES, NET

$

76,895,732

$

66,154,587








COST OF GOODS SOLD

64,457,707


60,427,101








GROSS PROFIT

12,438,025


5,727,486








SELLING EXPENSES

10,416,451


13,688,771

GENERAL AND ADMINISTRATIVE EXPENSES

313,390


11,268,857

TOTAL OPERATING EXPENSES

10,729,841


24,957,628








INCOME (LOSS) FROM OPERATIONS

1,708,184


(19,230,142)








OTHER (EXPENSE) INCOME, NET

295,018


(8,412)

IMPAIRMENT OF GOODWILL

-


-

IMPAIRMENT OF LONG-LIVED ASSETS

(1,053,765)


(4,995,012)

IMPAIRMENT OF AGRICULTURAL INVENTORY





(820,637)

CHANGE IN FAIR VALUE OF PURCHASE OPTION AND WARRANTS LIABILITY

(36,411)


(257,097)








INCOME (LOSS) BEFORE INCOME TAXES

913,026


(25,311,300)








PROVISION FOR INCOME TAXES

57,398


44,870








NET INCOME (LOSS)

855,628


(25,356,170)








ADD: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST

929


34








NET INCOME (LOSS) ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC.

$

856,557

$

(25,356,136)








NET INCOME (LOSS)

$

855,628

$

(25,356,170)








OTHER COMPREHENSIVE INCOME






Foreign currency translation adjustments

66,857


784,184








COMPREHENSIVE INCOME (LOSS)

922,485


(24,571,986)








Less: Comprehensive income (loss) attributable to noncontrolling interest

(1,479)


(668)








COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC.

$

921,006

$

(24,572,654)








WEIGHTED AVERAGE NUMBER OF SHARES:






Basic

14,960,522


13,880,190

Diluted

15,156,423


13,880,190








EARNINGS (LOSS) PER SHARES:






Basic

$

0.06

$

(1.83)

Diluted

$

0.06

$

(1.83)

 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES


CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY



















Accumulated







Common Stock




Retained Earnings

other







Number of




Paid-in

Statutory




comprehensive

Noncontrolling




shares

Amount

capital

reserves

Unrestricted

income/(loss)

interest

Total

BALANCE, March 31, 2013

13,609,002


13,609


16,609,747


1,309,109


17,095,369


3,121,654


(1,879)

$

38,147,609

Stock based
compensation

807,020


807


746,621


















747,428

Net loss

















(25,356,136)






(34)


(25,356,170)

Start-up of
Shouantang Health

























39,837


39,837

Closing of
Shanghai Zhongxin









(813)














1,917


1,104

Foreign currency
translation gain





















783,482


702


784,184

BALANCE, March 31, 2014

14,416,022

$

14,416


17,355,555


1,309,109


(8,260,767)


3,905,136


40,543

$

14,363,992
































Stock based
compensation

615,000


615


1,003,872


















1,004,487

Net income

















856,557






(929)


855,628

Issuance of common stocks in exchange of debts

619,482


620


941,806










-






942,426

Foreign currency translation gain (loss)





















67,407


(550)


66,857

BALANCE, March 31, 2015.

15,650,504

$

15,651


19,301,233


1,309,109


(7,404,210)


3,972,543


39,064

$

17,233,390

 

 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS





For the year ended
March 31,


2015

2014

CASH FLOWS FROM OPERATING ACTIVITIES:




Net income (loss)

$

855,628

$

(25,356,170)

Adjustments to reconcile net income (loss) to net cash provided by operating activities:






Bad debt direct write-off and provision

(7,461,802)


4,387,765

Depreciation and amortization

2,820,489


3,234,169

Inventory reserve and write-off

(775,660)


1,776,067

Agricultural inventory impairment

-


820,637

Leasehold improvement and fixed assets impairment

1,053,765


480,771

Impairment of intangible - license and permit

-


1,126,981

Impairment of prepayment of lease use right

-


2,481,792

Impairment of land and road improvement

-


905,468

Leasehold improvement write-off

-


145,040

Stock compensation

1,004,487


748,907

Change in fair value of purchase option derivative liability

36,411


263,307

Change in operating assets:






Accounts receivable, trade

(410,498)


5,211,707

Notes receivable

(138,187)


-

Inventories and biological assets

(2,970,350)


(2,272,013)

Other receivables

(920,961)


289,545

Advances to suppliers

5,266,390


7,863,565

Other current assets

(523,585)


(420,126)

Long term deposit

220,079


24,499

Other noncurrent assets

320,938


16,026

Change in operating liabilities:






Accounts payable, trade

1,255,589


524,778

Other payables and accrued liabilities

929,608


169,752

Customer deposits

548,534


(1,733,448)

Taxes payable

(47,657)


(4,903)

Net cash  provided by operating activities

1,063,218


684,116








CASH FLOWS FROM INVESTING ACTIVITIES:






Increase in financial assets available for sale

(1,307,200)


-

Acquisition of equipment

(1,283,997)


(322,624)

Acquisition of land use right

-


(1,585,139)

Increase in intangible assets-acquisition of Sanhao Pharmacy

(1,585,118)


-

Additions to leasehold improvements

(189,135)


(205,278)

Net cash (used in) investing activities

(4,365,450)


(2,113,041)








CASH FLOWS FROM FINANCING ACTIVITIES:






Proceeds from short-term bank loan

32,500


162,600

Repayment of short-term bank loan

(162,500)


-

Repayment of (Proceeds from) third parties loan

(294,405)


294,586

Change in restricted cash

(5,824,192)


(914,044)

Proceeds from notes payable

28,169,765


8,209,154

Repayment of notes payable

(20,333,918)


(7,704,703)

Changes in other payables-related parties

1,280,997


1,159,909

Net cash provided by financing activities

2,868,247


1,207,502








EFFECT OF EXCHANGE RATE ON CASH

12,290


142,605








(DECREASE) IN CASH

(421,695)


(78,818)








CASH, beginning of year

4,445,276


4,524,094








CASH, end of year

$

4,023,581

$

4,445,276








SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:






Cash paid for interest

$

56,366

$

8,764

Cash paid for income taxes

$

65,567

$

39,754

Issuance of common stocks in exchange of debts

$

941,613

$

-

Non-cash financing activities






Transfer from construction-in-progress to leasehold improvement

$

-

$

111,890

Goods receipts against accounts receivables and offset

$

-

$

5,394,919

About China Jo-Jo Drugstores, Inc.

China Jo-Jo Drugstores, Inc., through its own retail drugstores, wholesale distributor and online pharmacy, is a leading retailer and wholesale distributor of pharmaceutical and healthcare products in China. As of March 31, 2015, the Company had 59 retail pharmacies in Hangzhou. The Company's wholesale subsidiary not only supplies its retail stores, but also distributes drug and other healthcare products to other drugstores and drug vendors. The Company routinely posts important information on its corporate websites at www.jiuzhou-drugstore.com (Chinese) and www.chinajojodrugstores.com (English).

Forward Looking Statement

Statements in this press release regarding the Company that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking statements, including, but not limited to, financial guidance, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," "anticipate," the negatives thereof, or comparable terminology. Such statements typically involve risks and uncertainties and may include financial projections or information regarding the progress of new product development. It is routine for the Company's internal projections and expectations to change as the quarter and year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which the Company bases its expectations may change. Although these expectations may change, the Company is under no obligation to inform you if they do. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of numerous factors, including the risks associated with the effect of changing economic conditions in the People's Republic of China, variations in cash flow, reliance on collaborative retail partners and on new product development, variations in new product development, risks associated with rapid technological change, and the potential of introduced or undetected flaws and defects in products. Readers are referred to the reports and documents filed from time to time by the Company with the Securities and Exchange Commission for a discussion of these and other important risk factors that could cause actual results to differ from those discussed in forward-looking statements.

Contact:

China Jo-Jo Drugstores, Inc.
Ming Zhao, Chief Financial Officer
561-372-5555
frank.zhao@jojodrugstores.com

Source: China Jo-Jo Drugstores
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