omniture

China Jo-Jo Drugstores Reports First Quarter 2021 Financial Results

2020-08-14 21:00 7005

HANGZHOU, China, Aug. 14, 2020 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (NASDAQ: CJJD) ("Jo-Jo Drugstores" or the "Company"), a leading online and offline retailer, wholesale distributor of pharmaceutical and other healthcare products and healthcare provider in China, today announced its financial results for the first fiscal quarter ended June 30, 2020.

Mr. Lei Liu, Chairman and CEO of Jo-Jo Drugstores, commented, "We're proud of our strong first-quarter performance, despite unprecedented volatility and uncertainty in the market and across the globe. Our revenue and gross profit recorded $31.05 million and $7.98 million for the first fiscal quarter of 2021, up 22.8% and 31.7% compared to same period of fiscal year 2020. Revenue year-over-year from retail drugstores, online pharmacy, and wholesale segments increased by 12.4%, 101.1% and 20.1% respectively. We are rolling out our transformation strategy of 'Medical Linkage & Technology Empowerment' with the goal of providing quality medical services to commercial insurance customers from state-owned enterprises. We focus on stabilizing the medical supply in the market and protecting people's safety, allowing us to increase brand awareness, maintain revenues and expand margins."

First Quarter of Fiscal 2021 Financial Highlights



For the Three Months Ended June 30,

($ millions, except per share data)


2020


2019


% Change

Revenue


31.05


25.28


22.8%

      Retail drugstores


18.81


16.74


12.4%

      Online pharmacy


4.91


2.44


101.1%

      Wholesale


7.33


6.10


20.1%

Gross profit


7.98


6.06


31.7%

Gross margin


25.7%


24.0%


1.7 pp*

Loss from operations


(0.41)


(2.76)


85.1%

Net loss


(0.39)


(2.38)


83.7%

Loss per share


(0.01)


(0.07)


85.7%


*Notes: pp represents percentage points

  • Revenue increased by 22.8% to $31.05 million for the three months ended June 30, 2020 from $25.28 million for the same period of last year.
  • Gross profit increased by 31.7% to $7.98 million for the three months ended June 30, 2020 from $6.06 million for the same period of last year.
  • Gross margin increased by 1.7 percentage points to 25.7% for the three months ended June 30, 2020 from 24.0% for the same period of last year.
  • Net loss was $0.39 million, or $0.01 per basic and diluted share, for the three months ended June 30, 2020, compared to net loss of $2.38 million, or $0.07 per basic and diluted share, for the same period of last year.

First Quarter of Fiscal 2021 Financial Results

Revenue

Revenue for the three months ended June 30, 2020 increased by $5.77 million, or 22.8%, to $31.05 million from $25.28 million for the same period of last year. The increase in revenue was primarily due to the growth in retail drugstores, online pharmacy and wholesale business.



For the Three Months Ended June 30,



2020


2019

($ millions)


Revenue


Cost of
Goods


Gross
Margin


Revenue


Cost of
Goods


Gross
Margin

Retail drugstores


18.81


12.40


34.1%


16.74


11.68


30.2%

Online pharmacy


4.91


4.23


13.9%


2.44


2.10


14.2%

Wholesale


7.33


6.44


12.1%


6.10


5.44


10.9%

Total


31.05


23.07


25.7%


25.28


19.22


24.0%

Revenue from the retail drugstores business increased by $2.07 million, or 12.4%, to $18.81 million for the three months ended June 30, 2020 from $16.74 million for the same period of last year. The increase was primarily attributable to the consumer-facing benefits, such as emphasis on on-site medical care, chronic disease management services, incremental DTP (Direct-to-Patient) business caused by continuous hospital medical reform, and maturing of stores opened a year ago.

Revenue from the online pharmacy business increased by $2.47 million, or 101.1%, to $4.91 million for the three months ended June 30, 2020 from $2.44 million for the same period of last year. The increase was primarily caused by an increase in sales of prescription drugs via e-commerce platforms such as Tmall. Prescription drugs used to be prohibited from sales online due to safety concern. However, because the nation has lifted the ban order, online prescription drug sales become popular. As a result, the sale of prescription drugs was $1.87 million in the three months ended June 30, 2020 as compared to none in the three month ended June 30, 2019. Additionally, the Company maintained a membership care program targeted at chronic disease customers. The Company has closely interacted with its members via WeChat by providing healthcare knowledge and reminding its customers to refill medicine. By implementing a personalized customer care program, the Company was able to promote its sales.

Revenue from the wholesale business increased by $1.23 million, or 20.1%, to $7.33 million for the three months ended June 30, 2020 from $6.10 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 quantities at its retail stores, to other vendors at competitive prices.

Gross profit and gross margin

Total cost of goods sold increased by $3.85 million, or 20.1%, to $23.07 million for the three months ended June 30, 2020 from $19.22 million for the same period of last year. Gross profit increased by $1.92 million, or 31.7%, to $7.98 million for three months ended June 30, 2020 from $6.06 million for the same period of last year. Overall gross margin increased by 1.7 percentage points to 25.7% for the three months ended June 30, 2020, from 24.0% for the same period of last year.

Gross margins for retail drugstores, online pharmacy and wholesale were 34.1%, 13.9%, and 12.1%, respectively, for the three months ended June 30, 2020, compared to the corresponding gross margins of 30.2%, 14.2%, and 10.9% for the same period of last year.

Loss from operations

Selling and marketing expenses increased by $0.30 million, or 5.1%, to $6.27 million for the three months ended June 30, 2020 from $5.97 million for the same period of last year, primarily due to increase in fee charged by various platforms as a result of sale increase in our online pharmacy.

General and administrative expenses decreased by $0.73 million, or 25.7%, to $2.12 million for the three months ended June 30, 2020 from $2.85 million for the same period of last year. In the three months ended June 30, 2020, the Company recorded bad debt allowance expense of $18,320 as compared to $758,231 in the same period of last year. Excluding such an effect, the general and administrative expenses increased by $8,465 period over period.

Loss from operations was $0.41 million for the three months ended June 30, 2020, compared to loss from operations of $2.76 million for the same period of last year. Operating margin was (1.3)% and (10.9)% for the three months ended June 30, 2020 and 2019 respectively.

Net loss

Net loss was $0.39 million, or $0.01 per basic and diluted share for the three months ended June 30, 2020, compared to net loss of $2.38 million, or $0.07 per basic and diluted share for the same period of last year.

Financial Condition

As of June 30, 2020, the Company had cash of $18.48 million, compared to $16.18 million as of March 31, 2020. Net cash used in operating activities was $5.48 million for the three months ended June 30, 2020, compared to $8.16 million for the same period of last year. Net cash used in investing activities was $1.60 million for the three months ended June 30, 2020, compared to $1.17 million for the same period of last year. Net cash provided by financing activities was $9.47 million for the three months ended June 30, 2020, compared to $8.02 million for the same period of last year.

About China Jo-Jo Drugstores, Inc.

China Jo-Jo Drugstores, Inc. ("Jo-Jo Drugstores" or the "Company"), is a leading online and offline retailer and wholesale distributor of pharmaceutical and other healthcare products and a provider of healthcare services in China. Jo-Jo Drugstores currently operates an online pharmacy and retail drugstores with licensed doctors on site for consultation, examination and treatment of common ailments at scheduled hours. It is also a wholesale distributor of products similar to those carried in its pharmacies. 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,


2020


2020

ASSETS




CURRENT ASSETS




Cash and cash equivalents

$

18,477,212


$

16,176,318

Restricted cash


15,095,116



14,806,288

Financial assets available for sale


157,644



157,159

Notes receivable


28,290



57,005

Trade accounts receivable


8,984,595



9,770,656

Inventories


11,141,411



12,247,004

Other receivables, net


5,599,565



5,069,442

Advances to suppliers


2,237,720



1,174,800

Other current assets


1,835,927



1,528,540

Total current assets


63,557,480



60,987,212







PROPERTY AND EQUIPMENT, net


7,095,690



7,633,740







OTHER ASSETS






Long-term investment


3,963,758



2,544,451

Farmland assets


752,257



742,347

Long term deposits


1,447,547



1,456,384

Other noncurrent assets


1,049,184



1,046,763

Operating lease right-of-use assets


19,351,247



21,711,376

Intangible assets, net


3,358,407



3,393,960

Total other assets


29,922,400



30,895,281







Total assets

$

100,575,570


$

99,516,233







LIABILITIES AND STOCKHOLDERS' EQUITY






CURRENT LIABILITIES






Short-term bank loan


2,121,720



1,410,130

Accounts payable, trade


16,107,594



21,559,494

Notes payable


26,715,374



26,605,971

Other payables


2,176,992



2,522,330

Other payables - related parties


491,300



490,218

Customer deposits


795,903



708,140

Taxes payable


328,237



119,247

Accrued liabilities


672,469



753,612

Long-term loan payable-current portion


2,300,271



2,287,742

Current portion of operating lease liabilities


466,213



981,090

Total current liabilities


52,176,073



57,437,974







Long-term loan payable


3,551,507



4,115,958

Long-term operating lease liabilities


16,917,159



19,049,575

Employee Deposits


14,145



70,507

Purchase option and warrants liability


68,980



64,090

Total liabilities


72,727,864



80,738,104







COMMITMENTS AND CONTINGENCIES












STOCKHOLDERS' EQUITY






Common stock; $0.001 par value; 250,000,000 shares authorized; 37,961,790 and
   32,936,786 shares issued and outstanding as of June 30, 2020 and March 31, 2020


37,962



32,937

Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and
   outstanding as of June 30 and March 31, 2020


-



-

Additional paid-in capital


63,568,876



54,209,301

Statutory reserves


1,309,109



1,309,109

Accumulated deficit


(36,632,346)



(36,400,837)

Accumulated other comprehensive income


1,533,993



1,440,424

Total stockholders' equity


29,817,594



20,590,934

Noncontrolling interests


(1,969,888)



(1,812,805)

Total equity


27,847,706



18,778,129

Total liabilities and stockholders' equity

$

100,575,570


$

99,516,233

 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)



For the three months ended
June 30,


2020


2019

REVENUES, NET

$

31,054,312


$

25,280,784







COST OF GOODS SOLD


23,074,093



19,219,346







GROSS PROFIT


7,980,219



6,061,438







SELLING EXPENSES


6,272,407



5,968,551

GENERAL AND ADMINISTRATIVE EXPENSES


2,120,166



2,851,612

TOTAL OPERATING EXPENSES


8,392,573



8,820,163







LOSS FROM OPERATIONS


(412,354)



(2,758,725)







OTHER INCOME (EXPENSE):






INTEREST INCOME


163,588



47,873

INTEREST EXPENSE


(127,387)



-

OTHER


50,021



(62,485)

CHANGE IN FAIR VALUE OF PURCHASE OPTION AND WARRANTS
LIABILITY


(4,890)



403,555







LOSS BEFORE INCOME TAXES


(331,022)



(2,369,782)







PROVISION FOR INCOME TAXES


57,570



8,388







NET LOSS


(388,592)



(2,378,170)







LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST


(157,083)



(243,219)







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


(231,509)



(2,134,951)







OTHER COMPREHENSIVE LOSS






FOREIGN CURRENCY TRANSLATION ADJUSTMENTS


93,569



(405,238)







COMPREHENSIVE LOSS


(295,023)



(2,783,408)







WEIGHTED AVERAGE NUMBER OF SHARES:






Basic


34,428,271



32,453,269

Diluted


34,428,271



32,453,269







LOSS PER SHARES:






Basic

$

(0.01)


$

(0.07)

Diluted

$

(0.01)


$

(0.07)

 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)



For the three months ended
June 30,


2020


2019

CASH FLOWS FROM OPERATING ACTIVITIES:




Net loss

$

(388,592)


$

(2,378,170)

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






Bad debt direct write-off and provision


18,320



758,231

Depreciation and amortization


760,540



499,175

Stock based compensation


-



34,560

Change in fair value of purchase option derivative liability


4,890



(403,555)

Accounts receivable, trade


444,672



(959,680)

Notes receivable


28,824



81,326

Inventories and biological assets


1,140,697



2,851,652

Other receivables


(293,466)



371,054

Advances to suppliers


(952,166)



242,652

Other current assets


(583,285)



(450,042)

Long term deposit


13,299



58,630

Other noncurrent assets


806



(8,631)

Accounts payable, trade


(5,505,493)



(8,968,168)

Other payables and accrued liabilities


(435,365)



(105,522)

Customer deposits


85,379



116,398

Taxes payable


182,583



95,326







Net cash used in operating activities


(5,478,357)



(8,164,764)







CASH FLOWS FROM INVESTING ACTIVITIES:






Disposal of financial assets available for sale


-



14,658

Acquisition of equipment


(10,536)



(210,356)

Increase in intangible assets


(19,474)



(433,111)

Investment in a joint venture


(1,408,155)



-

Additions to leasehold improvements


(159,272)



(542,734)

Net cash used in investing activities


(1,597,437)



(1,171,543)







CASH FLOWS FROM FINANCING ACTIVITIES:






Proceeds from short-term bank loan


705,585



-

Repayment of third parties loan


(570,338)



-

Proceeds from notes payable


14,392,242



15,372,260

Repayment of notes payable


(14,364,978)



(16,167,012)

Decrease in Employee Deposits


(56,447)



-

Exercise of warrants


77,500



-

Proceeds from equity financing


9,287,100



9,273,077

Repayment of other payables-related parties


-



(460,000)

Net cash provided by financing activities


9,470,664



8,018,325







EFFECT OF EXCHANGE RATE ON CASH


194,852



(277,067)







INCREASE(DECREASE) IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH


2,589,722



(1,595,049)







CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period


30,982,606



24,745,202







CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, end of period

$

33,572,328


$

23,150,153







SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:






 Cash paid for interest


127,387



-

Cash paid for income taxes

$

-


$

29,176

 

Cision View original content:http://www.prnewswire.com/news-releases/china-jo-jo-drugstores-reports-first-quarter-2021-financial-results-301112420.html

Source: China Jo-Jo Drugstores, Inc.
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