omniture

China Jo-Jo Drugstores Reports Fiscal Year 2015 Third Quarter Financial Results

2015-02-17 22:00 3168

HANGZHOU, China, February 17, 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 earnings results for the quarter ended December 31, 2014.

FY 2015 Third Quarter Highlights:

  • Retail drugstores sales increased by $2.16 million, or 19.5% year over year, to approximately $13.3 million, largely due to a 24.3% increases in same-store sales;
  • Online pharmacy sales jumped 110.6% to approximately $4.4 million during the quarter, as compared to $2.1 million during the same period last year;
  • Gross profit increased by $3,002,949 or 1,676.8% compared to the same period of prior year;
  • Gross margin increased from 1.0% to 14.9% in the three months ended December 31,2014;
  • Net income was $127,525 compared to net loss of $8,735,230 for the same period last year; Diluted EPS was $0.01 compared to loss per share of $0.64 for the comparable quarter of prior year.

Retail drugstores sales increased 19.5% primarily due to the 24.3% increase in same-store sales in the third quarter of 2015. Our retail drugstores sale growth rate is more than twice of the industry average. By acquiring Sanhao Pharmacy during the recent quarter, selecting products catering to local community, and continuing to provide quality in-store service such as doctors' in-store clinics service, we expect to further strengthen our competitive advantage in Hangzhou and Zhejiang Province.

The Company's online pharmacy sales increased dramatically for the three months ended December 31, 2014, more than double the sales as compared to that of the three months ended December 31, 2013. We have expanded cooperation with business-to-consumer online vendors, including Taobao, JD.com and Amazon.com. In addition, we have signed a service agreement with Alipay (China) Internet Technology Ltd. ("Alipay") to launch an online payment service ("Alipay Service") for its customers, which gives us a great opportunity to get access to Alipay's over 300 million registered users. We expect online pharmacy sales will continue to grow fast in the future, especially considering the potential authorization of the online sale of prescription drugs in 2015.

Mr. Lei Liu, Chairman and CEO of the Company stated, "We are glad to see that our company delivered a solid performance as we achieved quarterly profitability as compared to last year's large deficits . What's more exciting is the rapid increase in our e-commerce revenue, which greatly contributed to our total revenue. In the next two to three years, the online pharmacy sales would probably exceed our retail drugstore sales and make the Company one of the leading online pharmacy stores in China. Now it's only a turning point. Going forward, we will continue to focus our efforts on developing e-commerce opportunities, and drive our physical stores network and sales growth."

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 December 31, 2014, the Company had 60 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
+1-561-372-5555
frank.zhao@jojodrugstores.com

See Accompanying Tables

CHINA JO-JO DRUGSTORES, INC., AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)




December 31,



March 31,




2014



2014









ASSETS














CURRENT ASSETS







Cash


$

1,734,392



$

4,445,276


Restricted cash



9,989,227




3,114,543


Notes receivable



108,329




-


Trade accounts receivable, net



7,111,594




6,734,536


Inventories



9,777,878




7,047,397


Other receivables, net



988,640




149,546


Advances to suppliers, net



3,666,492




4,577,194


Other current assets



1,614,095




1,663,102


Total current assets



34,990,647




27,731,594











PROPERTY AND EQUIPMENT, net



9,378,160




9,412,688











OTHER ASSETS









Farmland assets



1,376,806




1,371,735


Long term deposits, landlord



2,576,118




2,786,437


Other noncurrent assets



2,767,155




3,036,930


Intangible assets, net



3,140,358




1,569,443


Total other assets



9,860,437




8,764,545











Total assets


$

54,229,244



$

45,908,827











LIABILITIES AND STOCKHOLDERS' EQUITY










CURRENT LIABILITIES









Short-term loan payable


$

32,580



$

162,300


Accounts payable, trade



13,366,998




14,554,726


Notes payable



14,939,135




7,820,718


Other payables



2,862,395




1,282,211


Other payables - related parties



1,972,931




2,384,294


Loan from third parties



215,843




294,042


Customer deposits



3,693,298




3,185,885


Taxes payable



450,340




373,501


Accrued liabilities



678,751




1,208,242


Total current liabilities



38,212,271




31,265,919











Purchase option and warrant liability



329,990




278,916


Total liabilities



38,542,261




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 December 31, 2014 and March 31, 2014



-




-


Common stock; $0.001 par value; 250,000,000 shares authorized; 15,385,504 and
14,416,022 shares issued and outstanding as of December 31, 2014 and March 31,
2014



15,386




14,416


Additional paid-in capital



18,824,368




17,355,555


Statutory reserves



1,309,109




1,309,109


Accumulated deficit



(8,517,159)




(8,260,767)


Accumulated other comprehensive income



4,016,336




3,905,136


Total stockholders' equity



15,648,040




14,323,449











Noncontrolling interests



38,943




40,543


Total equity



15,686,983




14,363,992











Total liabilities and stockholders' equity


$

54,229,244



$

45,908,827


CHINA JO-JO DRUGSTORES, INC., AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)




For the three months ended December 31,



For the nine months ended December 31,




2014



2013



2014



2013


REVENUES, NET


$

21,320,039



$

17,833,072



$

56,223,336



$

50,025,012



















COST OF GOODS SOLD



18,138,006




17,653,988




47,765,427




43,296,356



















GROSS PROFIT



3,182,033




179,084




8,457,909




6,728,656



















SELLING EXPENSES



2,184,184




5,338,404




5,886,541




9,998,377


GENERAL AND ADMINISTRATIVE EXPENSES



622,113




3,700,466




2,449,489




6,833,265


TOTAL OPERATING EXPENSES



2,806,297




9,038,870




8,336,030




16,831,642



















INCOME (LOSS) FROM OPERATIONS



375,736




(8,859,786)




121,879




(10,102,986)



















OTHER INCOME (LOSS), NET



(106,773)




130,426




(275,301)




127,034


CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITIES



(127,431)




(41,944)




(51,074)




(50,328)



















INCOME (LOSS) BEFORE INCOME TAXES



141,532




(8,771,304)




(204,496)




(10,026,280)



















PROVISION FOR INCOME TAXES



14,007




(35,887)




52,828




43,222



















NET INCOME (LOSS)



127,525




(8,735,417)




(257,324)




(10,069,502)



















LESS: NET INCOME (LOSS) ATTRIBUTABLE TO
NONCONTROLLING INTEREST



(987)




187




932




694



















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



126,538




(8,735,230)




(256,392)




(10,068,808)



















OTHER COMPREHENSIVE INCOME (LOSS)

















Foreign currency translation adjustments



52,740




259,814




111,200




1,019,605



















COMPREHENSIVE INCOME (LOSS)


$

179,278



$

(8,475,416)



$

(145,192)



$

(9,049,203)



















WEIGHTED AVERAGE NUMBER OF SHARES:

















Basic



15,199,092




13,959,003




14,867,218




13,730,742


Diluted



15,596,554




13,959,003




14,867,218




13,730,742



















LOSS PER SHARES:

















Basic


$

0.01



$

(0.64)



$

(0.02)



$

(0.73)


Diluted


$

0.01



$

(0.64)



$

(0.02)



$

(0.73)


CHINA JO-JO DRUGSTORES, INC., AND SUBSIDIARIESCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)







Nine months ended
December 31,




2014



2013


CASH FLOWS FROM OPERATING ACTIVITIES:







Net loss


$

(257,324)



$

(10,069,502)


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









Depreciation and amortization



1,240,323




1,646,066


Stock compensation



527,357




477,284


Bad debt recovery



(3,126,039)




(692,883)


Inventory reserve



277,603




-


Change in fair value of purchase option and warrant liability



51,074




86,379


Change in operating assets:









Accounts receivable, trade



1,566,629




2,278,341


Notes receivable



(108,096)




-


Inventories



(2,976,220)




(9,330,835)


Other receivables



(619,695)




(259,339)


Advances to suppliers



1,916,591




10,706,963


Other current assets



55,012




(1,009,632)


Long term deposit



220,146




-


Other noncurrent assets



280,399




133,648


Change in operating liabilities:









Accounts payable, trade



(1,236,808)




5,099,673


Other payables and accrued liabilities



390,535




1,074,755


Customer deposits



494,570




(909,992)


Taxes payable



75,296




82,942


Net cash used in operating activities



(1,228,647)




(686,132)











CASH FLOWS FROM INVESTING ACTIVITIES:









Purchase of equipment



(898,522)




(457,609)


Increase in long-term deposits for land use right



-




(1,355,290)


Acquisition of business, net



(936,288)




-


Additions to leasehold improvements



(189,143)




(25,112)


Payments on construction-in-progress



(96,636)




-


Net cash used in investing activities



(2,120,589)




(1,838,011)











CASH FLOWS FROM FINANCING ACTIVITIES:









Proceeds from short-term bank loan



32,510




162,280


Repayment of short-term bank loan



(162,550)




-


Repayment of third parties loan



(79,116)




-


Change in restricted cash



(6,848,423)




(999,814)


Repayments of notes payable



(14,132,390)




659,246


Issuance of notes payable



21,206,663




-


Change in other payables-related parties



529,115




909,954


Net cash provided by financing activities



545,809




731,666











EFFECT OF EXCHANGE RATE ON CASH



92,543




375,042











DECREASE IN CASH



(2,710,884)




(1,417,435)











CASH, beginning of period



4,445,276




4,524,094











CASH, end of period


$

1,734,392



$

3,106,659











SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:









Cash paid for interest


$

4,621



$

-


Cash paid for income taxes


$

59,755



$

9,529


Issuance of common stock in settlement of debts


$

941,613



$

-


To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/china-jo-jo-drugstores-reports-fiscal-year-2015-third-quarter-financial-results-300035837.html

Source: China Jo-Jo Drugstores, Inc.
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