omniture

China Jo-Jo Drugstores Reports First Quarter 2020 Financial Results

2019-08-14 21:00 6192

HANGZHOU, China, Aug. 14, 2019 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (NASDAQ CM: CJJD) ("Jo-Jo Drugstores" or the "Company"), a leading online and offline retailer and wholesale distributor of pharmaceutical and other healthcare products and a healthcare provider in China, today announced its financial results for the first quarter of its fiscal year 2020.

Mr. Lei Liu, Chief Executive Officer and Chairman of Jo-Jo Drugstores, commented, "We are pleased to announce our financial results for the first quarter of fiscal year 2020. Our sales grew 11.0%, with sales growth in our retail drugstores, online pharmacy, and wholesale segments. We will continue adapting to the changing retail drugstore environment and making progress towards our long-term strategic goals. We remain confident of our ability to realize the potential of our business model as we endeavor to provide the best experience to our customers."  

First Quarter of Fiscal 2020 Financial Highlights



For the Three Months Ended June 30,

($ millions, except per share data)


2019


2018


% Change

Revenue


25.28


22.77


11.0%

      Retail drugstores


16.74


15.97


4.8%

      Online pharmacy


2.44


2.02


20.9%

      Wholesale


6.10


4.78


27.6%

Gross profit


6.06


5.62


7.9%

Gross margin


24.0%


24.7%


-0.7 pp*

Loss from operations


(2.76)


(0.56)


-388.5%

Net loss


(2.38)


(0.70)


-241.4%

Loss per share


(0.07)


(0.02)


-250.0%


*Notes: pp represents percentage points

  • Revenue increased by 11.0% to $25.28 million for the three months ended June 30, 2019 from $22.77 million for the same period of last year.
  • Gross profit increased by 7.9% to $6.06 million for the three months ended June 30, 2019 from $5.62 million for the same period of last year.
  • Gross margin decreased by 0.7 percentage points to 24.0% from 24.7% for the same period of last year.
  • Net loss was $2.38 million, or $0.07 per basic and diluted share, for the three months ended June 30, 2019, compared to $0.70 million, or $0.02 per basic and diluted share, for the same period of last year.

First Quarter of Fiscal 2020 Financial Results

Revenue

Revenue for the three months ended June 30, 2019 increased by $2.51 million, or 11.0%, to $25.28 million from $22.77 million for the same period of last year. The increase in revenue was primarily due to the growth in retail drugstores business, online pharmacy and wholesale business.


For the Three Months Ended June 30,


2019


2018

($ millions)

Revenue


Cost of Goods


Gross Margin


Revenue


Cost of Goods


Gross Margin

Retail drugstores

16.74


11.68


30.2%


15.97


11.17


30.1%

Online pharmacy

2.44


2.10


14.2%


2.02


1.74


13.9%

Wholesale

6.10


5.44


10.9%


4.78


4.25


11.1%

Total

25.28


19.22


24.0%


22.77


17.16


24.7%

Revenue from the retail drugstores business increased by $0.77 million, or 4.8%, to $16.74 million for the three months ended June 30, 2019 from $15.97 million for the same period of last year. The increase was primarily due to consumer-facing benefits such as emphasis on onsite medical care, chronic disease management services, incremental Direct-to-Patient ("DTP") business caused by continuous hospital medical reform, and maturing of stores opened a year ago.

Revenue from the online pharmacy business increased by $0.42 million, or 20.9%, to $2.44 million for the three months ended June 30, 2019 from $2.02 million for the same period of last year. The increase was primarily caused by an increase in sales via e-commerce platforms such as Tmall, offset slightly by the decline in sales via the Company's official site. Popular products at reasonable prices are key to success in online business. In order to promote the Company's sales, the Company focused on the selection of medical equipment suitable to local customers.  For example, sales of blood glucose meters and contact lens contributed significantly to our revenue in the three months ended June 30, 2019 as compared to the same period a year ago.

Revenue from the wholesale business increased by $1.32 million, or 27.6%, to $6.10 million for the three months ended June 30, 2019 from $4.78 million for the same period of last year. The increase was primarily a result of the Company's ability to resell certain products, which the Company sold in large quantity at its retail stores, to other vendors at competitive prices.

Gross profit and gross margin

Total cost of goods sold increased by $2.06 million, or 12.0%, to $19.22 million for the three months ended June 30, 2019 from $17.16 million for the same period of last year. Gross profit increased by $0.44 million, or 7.9%, to $6.06 million for three months ended June 30, 2019 from $5.62 million for the same period of last year. Overall gross margin decreased by 0.7 percentage points to 24.0% for the three months ended June 30, 2019, from 24.7% for the same period of last year.

Gross margins for retail drugstores, online pharmacy and wholesale were 30.2%, 14.2%, and 10.9%, respectively, for the three months ended June 30, 2019. For the same period of last year, the gross margins for retail drugstores, online pharmacy and wholesale of were 30.1%, 13.9%, and 11.1%, respectively.

Loss from operations

Selling and marketing expenses increased by $1.34 million, or 29.0%, to $5.97 million for the three months ended June 30, 2019 from $4.63 million for the same period of last year. The increase in selling and marketing expenses was primarily due to the increase in labor and rent related to the Company's store expansions and rising local living costs.

General and administrative expenses increased by $1.30 million, or 83.4%, to $2.85 million for the three months ended June 30, 2019 from $1.55 million for the same period of last year. The Company's retail business incurred additional administrative expenses related to its store expansion. Additionally, Zhejiang Jiuzhou Linjia Medical Investment and Management Co. Ltd, the entity we have 51% that operates two new clinics in Hangzhou, incurred additional administrative labor costs. The bad debt expenses related to the Company's accounts receivable increased by approximately $0.5 million due to certain aged accounts. 

Loss from operations was $2.76 million for the three months ended June 30, 2019, compared to $0.56 million for the same period of last year. Operating margin was negative 10.9% for the three months ended June 30, 2019, compared to negative 2.5% for the same period of last year.

Net loss

Net loss was $2.38 million, or $0.07 per basic and diluted share for the three months ended June 30, 2019, compared to net loss of $0.70 million, or $0.02 per basic and diluted share for the same period of last year.

Financial Condition

As of June 30, 2019, the Company had cash of $8.34 million, compared to $9.32 million as of March 31, 2019. Net cash used in operating activities was $8.16 million for the three months ended June 30, 2019, compared to $2.58 million for the same period of last year. Net cash used in investing activities was $0.95 million for the three months ended June 30, 2019, compared to $0.26 million for the same period of last year. Net cash provided by financing activities was $8.02 million for the three months ended June 30, 2019, compared to net cash used in financing activities of $5.21 million for the same period of last year.

About China Jo-Jo Drugstores, Inc.

China Jo-Jo Drugstores, Inc. is a leading online and offline retailer and wholesale distributor of pharmaceutical and other healthcare products in China. Jo-Jo Drugstores currently operates retail drugstores and an online pharmacy. It is also a wholesale distributor of products similar to those carried in its pharmacies and it cultivates herbs used for traditional Chinese medicine. For more information about the Company, please visit http://jiuzhou360.com. The Company routinely posts important information on its website.

Forward-Looking Statements

This press release contains information about the Company's view of its future expectations, plans and prospects that constitute forward-looking statements. Actual results may differ materially from historical results or those indicated by these forward-looking statements as a result of a variety of factors including, but not limited to, risks and uncertainties associated with its ability to raise additional funding, its ability to maintain and grow its business, variability of operating results, its ability to maintain and enhance its brand, its development and introduction of new products and services, the successful integration of acquired companies, technologies and assets into its portfolio of products and services, marketing and other business development initiatives, competition in the industry, general government regulation, economic conditions, dependence on key personnel, the ability to attract, hire and retain personnel who possess the technical skills and experience necessary to meet the requirements of its clients, and its ability to protect its intellectual property. The Company's encourages you to review other factors that may affect its future results in the Company's annual reports and in its other filings with the Securities and Exchange Commission.

For more information, please contact:

Company Contact: 

Frank Zhao
Chief Financial Officer
+86-571-88077108
frank.zhao@jojodrugstores.com

Steve Liu
Investor Relations Director
steve.liu@jojodrugstores.com

Investor Relations Contact:

Tina Xiao
Ascent Investor Relations LLC
+1-917-609-0333
tina.xiao@ascent-ir.com 

 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)



















June 30,



March 31,



2019



2019


ASSETS








CURRENT ASSETS









Cash

$

8,341,167



$

9,322,463



Restricted cash


14,808,986




15,422,739



Financial assets available for sale


162,273




180,928



Notes receivable


92,480




177,278



Trade accounts receivable


8,590,075




8,692,514



Inventories


10,806,698




13,955,202



Other receivables, net


4,253,802




4,438,230



Advances to suppliers


1,544,132




1,950,252



Other current assets


1,557,156




2,063,375




Total current assets


50,156,769




56,202,981










PROPERTY AND EQUIPMENT, net


8,620,758




8,727,358










OTHER ASSETS









Long-term investment


16,318




24,243



Farmland assets


742,974




825,259



Long term deposits


2,050,219




2,157,275



Other noncurrent assets


1,177,703




1,196,197



Operating lease right-of-use assets


13,564,115




-



Intangible assets, net


3,888,848




3,597,323




Total other assets


21,440,177




7,800,297












      Total assets

$

80,217,704



$

72,730,636












LIABILITIES AND STOCKHOLDERS' EQUITY








CURRENT LIABILITIES









Accounts payable, trade


13,674,741




23,106,230



Notes payable


24,574,955




25,951,673



Other payables


3,267,074




3,197,221



Other payables - related parties


326,778




795,179



Customer deposits


870,100




771,942



Taxes payable


217,704




125,859



Accrued liabilities


990,032




1,264,182



Current portion of operating lease liabilities


4,738,632




-




Total current liabilities


48,660,016




55,212,286











Long term operating lease  liabilities


7,918,900




-



Purchase option and warrants liability


61,693




465,248



Financial liability


80,081




81,935




Total liabilities


56,720,690




55,759,469










COMMITMENTS AND CONTINGENCIES
















STOCKHOLDERS' EQUITY









Common stock; $0.001 par value; 250,000,000 shares authorized; 32,936,786 and 28,936,778 shares issued and outstanding as of June 30, 2019 and March 31, 2019


32,937




28,937



Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and outstanding as of June 30, 2019 and March 31, 2019


-




-



Additional paid-in capital


54,209,301




44,905,664



Statutory reserves


1,309,109




1,309,109



Accumulated deficit


(32,722,416)




(30,587,468)



Accumulated other comprehensive income


2,103,726




2,508,964




Total stockholders' equity


24,932,657




18,165,206




Noncontrolling interests


(1,435,643)




(1,194,039)




Total equity


23,497,014




16,971,167




      Total liabilities and stockholders' equity

$

80,217,704



$

72,730,636


 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)



For the three months ended

June 30,


2019


2018

REVENUES, NET

$

25,280,784


$

22,772,566







COST OF GOODS SOLD


19,219,346



17,155,763







GROSS PROFIT


6,061,438



5,616,803







SELLING EXPENSES


5,968,551



4,626,978

GENERAL AND ADMINISTRATIVE EXPENSES


2,851,612



1,554,528

TOTAL OPERATING EXPENSES


8,820,163



6,181,506







LOSS FROM OPERATIONS


(2,758,725)



(564,703)







INTEREST INCOME


47,873



47,172

OTHER (EXPENSE), NET


(62,485)



(114,941)

CHANGE IN FAIR VALUE OF WARRANTS LIABILITY


403,555



(6,974)







LOSS BEFORE INCOME TAXES


(2,369,782)



(639,446)







PROVISION FOR INCOME TAXES


8,388



57,169







NET LOSS


(2,378,170)



(696,615)







ADD: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST


243,219



50,763







NET LOSS ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC.


(2,134,951)



(645,852)







FOREIGN CURRENCY TRANSLATION ADJUSTMENTS


(405,238)



621,634







COMPREHENSIVE LOSS


(2,783,408)



(74,981)







WEIGHTED AVERAGE NUMBER OF SHARES:






Basic


32,453,269



28,936,778

Diluted


32,453,269



28,936,778







LOSS PER SHARES:






Basic

$

(0.07)


$

(0.02)

Diluted

$

(0.07)


$

(0.02)

 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)












For the three months ended




June 30,




2019


2018

CASH FLOWS FROM OPERATING ACTIVITIES:






Net loss


$

(2,378,170)


$

(696,615)

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




Bad debt direct write-off and provision


758,231



259,279


Depreciation and amortization


499,175



293,095


Stock based compensation


34,560



49,140


Change in fair value of purchase option derivative liability

(403,555)



6,974


Accounts receivable, trade


(959,680)



1,077,419


Notes receivable


81,326



(114,944)


Inventories and biological assets


2,851,652



(458,803)


Other receivables


371,054



(401,204)


Advances to suppliers


242,652



(775,014)


Other current assets


(450,042)



554,048


Long term deposit


58,630



(5,415)


Other noncurrent assets


(8,631)



(97,341)


Accounts payable, trade


(8,968,168)



(2,369,206)


Other payables and accrued liabilities


(105,522)



357,335


Customer deposits


116,398



20,290


Taxes payable


95,326



(281,235)











Net cash (used in) operating activities


(8,164,764)



(2,582,197)









CASH FLOWS FROM INVESTING ACTIVITIES:







Disposal of financial assets available for sale


14,658



-


Acquisition of equipment


(210,356)



(32,753)


Increase in intangible assets


(433,111)



-


Investment in a joint venture


-



(109,142)


Additions to leasehold improvements


(542,734)



(116,002)



Net cash used in investing activities


(1,171,543)



(257,897)









CASH FLOWS FROM FINANCING ACTIVITIES:







Proceeds from notes payable


15,372,260



10,376,504


Repayment of notes payable


(16,167,012)



(15,512,104)


Proceeds from equity financing


9,273,077



7,629


Repayment of other payables-related parties


(460,000)



(84,014)



Net cash provided by (used in) financing activities


8,018,325



(5,211,985)









EFFECT OF EXCHANGE RATE ON CASH


(277,067)



(457,638)









DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH

(1,595,049)



(8,509,717)









CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period


24,745,202



31,452,191









CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, end of period

$

23,150,153


$

22,942,474









SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:







Cash paid for income taxes

$

29,176


$

27,832

 

Cision View original content:http://www.prnewswire.com/news-releases/china-jo-jo-drugstores-reports-first-quarter-2020-financial-results-300901024.html

Source: China Jo-Jo Drugstores, Inc.
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