omniture

China Jo-Jo Drugstores Reports Second Quarter 2020 Financial Results

2019-11-14 22:00 5379

HANGZHOU, China, Nov. 14, 2019 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (NASDAQ: CJJD) ("Jo-Jo Drugstores" or the "Company"), a leading online and offline retailer and wholesale distributor of pharmaceutical and other healthcare products and a provider of healthcare services in China, today announced its financial results for the second fiscal quarter ended September 30, 2019.

Mr. Lei Liu, Chief Executive Officer and Chairman of Jo-Jo Drugstores, commented, "We are pleased to announce our financial results for the second quarter of fiscal year 2020, with revenue increasing by 3.4% compared to the same period last year. We made great strides in boosting our business and optimizing our operation. As a result, our gross profit had a 15.5% increase and gross margin had a 2.4 percent points increase in the second quarter of 2019. We will continue executing our long-term growth strategy, improving our operations to deliver high quality services to our customers in a challenging and competitive environment." 

Second Quarter of Fiscal 2020 Financial Highlights



For the Three Months Ended September 30,

($ millions, except per share data)


2019


2018


% Change

Revenue


28.35


27.41


3.4%

      Retail drugstores


18.00


18.14


-0.7%

      Online pharmacy


2.35


2.12


10.8%

      Wholesale


8.00


7.15


11.9%

Gross profit


6.69


5.80


15.5%

Gross margin


23.6%


21.2%


2.4 pp*

Loss from operations


(1.62)


(1.64)


1.6%

Net loss


(1.35)


(1.60)


16.0%

Loss per share


(0.04)


(0.06)


33.3%

*Notes: pp represents percentage points

  • Revenue increased by 3.4% to $28.35 million for the three months ended September 30, 2019 from $27.41 million for the same period of last year.
  • Gross profit increased by 15.5% to $6.69 million for the three months ended September 30, 2019 from $5.80 million for the same period of last year.
  • Gross margin increased by 2.4 percentage points to 23.6% from 21.2% for the same period of last year.
  • Net loss was $1.35 million, or $0.04 per basic and diluted share, for the three months ended September 30, 2019, compared to $1.60 million, or $0.06 per basic and diluted share, for the same period of last year.

Second Quarter of Fiscal 2020 Financial Results

Revenue

Revenue for the three months ended September 30, 2019 increased by $0.94 million, or 3.4%, to $28.35 million from $27.41 million for the same period of last year. The increase in revenue was primarily due to the growth in our wholesale business and online pharmacy.



For the Three Months Ended September 30,



2019


2018

($ millions)


Revenue


Cost of
Goods


Gross
Margin


Revenue


Cost of
Goods


Gross
Margin

Retail drugstores


18.00


12.47


30.7%


18.14


13.28


26.8%

Online pharmacy


2.35


2.03


13.6%


2.12


1.91


10.1%

Wholesale


8.00


7.16


10.6%


7.15


6.42


10.1%

Total


28.35


21.66


23.6%


27.41


21.61


21.2%

Revenue from the retail drugstores business decreased slightly by $0.14 million, or 0.7%, to $18.00 million for the three months ended September 30, 2019 from $18.14 million for the same period of last year, due to the RMB's dramatic depreciation against the USD from the three months ended September 30, 2018.

Revenue from the online pharmacy business increased by $0.23 million, or 10.8%, to $2.35 million for the three months ended September 30, 2019 from $2.12 million for the same period of last year. The increase was primarily attributable to an increase in sales via e-commerce platforms such as Tmall, offset slightly by a decline in sales via the Company's official site. Popular products at reasonable prices are key to success in our online business. In order to promote the Company's sales, the Company focused on selecting medical equipment tailored to the demands of local customers.

Revenue from the wholesale business increased by $0.85 million, or 11.9%, to $8.00 million for the three months ended September 30, 2019 from $7.15 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 slightly by $0.05 million, or 0.2%, to $21.66 million for the three months ended September 30, 2019 from $21.61 million for the same period of last year. Gross profit increased by $0.89 million, or 15.5%, to $6.69 million for three months ended September 30, 2019 from $5.80 million for the same period of last year. Overall gross margin increased by 2.4 percentage points to 23.6% for the three months ended September 30, 2019, from 21.2% for the same period of last year.

Gross margins for retail drugstores, online pharmacy and wholesale were 30.7%, 13.6%, and 10.6%, respectively, for the three months ended September 30, 2019. This compared to gross margins for retail drugstores, online pharmacy and wholesale of 26.8%, 10.1%, and 10.1%, respectively, for the same period of last year.

Loss from operations

Selling and marketing expenses increased by $1.27 million, or 24.2%, to $6.49 million for the three months ended September 30, 2019 from $5.22 million for the same period of last year. The increase in selling and marketing expenses was primarily due to increases in labor costs related to the Company's store expansions and rising local cost of living.

General and administrative expenses decreased by $0.40 million, or 17.7%, to $1.82 million for the three months ended September 30, 2019 from $2.22 million for the same period of last year. In the three months ended September 30, 2018, the Company recorded additional bad debt allowance of $0.63 million. In comparison, the Company recorded additional bad debts allowance of $0.01 million in the three months ended September 30, 2019. 

Loss from operations was $1.62 million for the three months ended September 30, 2019, compared to $1.64 million for the same period of last year. Operating margin was negative 5.7% for the three months ended September 30, 2019, compared to negative 6.0% for the same period of last year.

Net loss

Net loss was $1.35 million, or $0.04 per basic and diluted share for the three months ended September 30, 2019, compared to net loss of $1.60 million, or $0.06 per basic and diluted share for the same period of last year.

Six Months Ended September 30, 2019 Financial Highlights



For the Six Months Ended September 30,

($ millions, except per share data)


2019


2018


% Change

Revenue


53.63


50.18


6.9%

      Retail drugstores


34.74


34.10


1.9%

      Online pharmacy


4.79


4.14


15.7%

      Wholesale


14.10


11.93


18.2%

Gross profit


12.75


11.41


11.7%

Gross margin


23.8%


22.7%


1.1 pp*

Loss from operations


(4.38)


(2.21)


-98.3%

Net loss


(3.73)


(2.30)


-62.0%

Loss per share


(0.10)


(0.08)


-25.0%

*Notes: pp represents percentage points

  • Revenue increased by 6.9% to $53.63 million for the six months ended September 30, 2019 from $50.18 million for the same period of last year.
  • Gross profit increased by 11.7% to $12.75 million for the six months ended September 30, 2019 from $11.41 million for the same period of last year.
  • Gross margin increased by 1.1 percentage points to 23.8% from 22.7% for the same period of last year.
  • Net loss was $3.73 million, or $0.10 per basic and diluted share, for the six months ended September 30, 2019, compared to $2.30 million, or $0.08 per basic and diluted share, for the same period of last year.

Six Months Ended September 30, 2019 Financial Results

Revenue

Revenue for the six months ended September 30, 2019 increased by $3.45 million, or 6.9%, to $53.63 million from $50.18 million for the same period of last year. The increase in revenue was primarily due to the growth in wholesale business and online pharmacy.



For the Six Months Ended September 30,



2019


2018

($ millions)


Revenue


Cost of
Goods


Gross
Margin


Revenue


Cost of
Goods


Gross
Margin

Retail drugstores


34.74


24.15


30.5%


34.10


24.44


28.3%

Online pharmacy


4.79


4.13


13.9%


4.14


3.65


11.9%

Wholesale


14.10


12.60


10.7%


11.93


10.68


10.5%

Total


53.63


40.88


23.8%


50.18


38.77


22.7%

Revenue from the retail drugstores business increased by $0.64 million, or 1.9%, to $34.74 million for the six months ended September 30, 2019 from $34.10 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 $0.65 million, or 15.7%, to $4.79 million for the six months ended September 30, 2019 from $4.14 million for the same period of last year. The increase was primarily attributable to an increase in sales via e-commerce platforms such as Tmall, offset slightly by the decline in sales via the Company's official site.

Revenue from the wholesale business increased by $2.17 million, or 18.2%, to $14.10 million for the six months ended September 30, 2019 from $11.93 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 $2.11 million, or 5.4%, to $40.88 million for the six months ended September 30, 2019 from $38.77 million for the same period of last year. Gross profit increased by $1.34 million, or 11.7%, to $12.75 million for the six months ended September 30, 2019 from $11.41 million for the same period of last year. Overall gross margin increased by 1.1 percentage points to 23.8% for the six months ended September 30, 2019, from 22.7% for the same period of last year.

Gross margins for retail drugstores, online pharmacy and wholesale were 30.5%, 13.9%, and 10.7%, respectively, for the six months ended September 30, 2019. This compared to gross margins for retail drugstores, online pharmacy and wholesale of 28.3%, 11.9%, and 10.5%, respectively, for the same period of last year.

Loss from operations

Selling and marketing expenses increased by $2.60 million, or 26.4%, to $12.45 million for the six months ended September 30, 2019 from $9.85 million for the same period of last year. The increase in selling and marketing expenses was primarily due to increases in labor costs related to the Company's store expansions and rising local cost of living.

General and administrative expenses increased by $0.91 million, or 24.0%, to $4.68 million for the six months ended September 30, 2019 from $3.77 million for the same period of last year. The bad debt expense related to the Company's accounts receivable decreased by approximately $0.1 million due to certain aged accounts. Additionally, in order to better reflect the attributes of expenses, certain clinic labor expenses, which were originally allocated to G&A expense are now allocated to selling expense in the six months ended September 20, 2019. 

Loss from operations was $4.38 million for the six months ended September 30, 2019, compared to $2.21 million for the same period of last year. Operating margin was negative 8.2% for the six months ended September 30, 2019, compared to negative 4.4% for the same period of last year.

Net loss

Net loss was $3.73 million, or $0.10 per basic and diluted share for the six months ended September 30, 2019, compared to net loss of $2.30 million, or $0.08 per basic and diluted share for the same period of last year.

Financial Condition

As of September 30, 2019, the Company had cash of $17.40 million, compared to $9.32 million as of March 31, 2019. Net cash provided by operating activities was $0.97 million for the six months ended September 30, 2019, compared to net cash used in operating activities of $2.92 million for the same period of last year. Net cash used in investing activities was $1.45 million for the six months ended September 30, 2019, compared to $0.39 million for the same period of last year. Net cash provided by financing activities was $6.38 million for the six months ended September 30, 2019, compared to net cash used in financing activities of $2.19 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. In addition, Jo-Jo Drugstores 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)


September 30,


March 31,


2019


2019

ASSETS




CURRENT ASSETS





Cash

$

17,395,116


$

9,322,463


Restricted cash


11,890,053



15,422,739


Financial assets available for sale


156,128



180,928


Notes receivable


76,922



177,278


Trade accounts receivable


7,243,629



8,692,514


Inventories


12,177,952



13,955,202


Other receivables, net


4,861,492



4,438,230


Advances to suppliers


1,368,114



1,950,252


Other current assets


1,286,855



2,063,375



Total current assets


56,456,261



56,202,981







PROPERTY AND EQUIPMENT, net


8,043,511



8,727,358







OTHER ASSETS







Long-term investment


11,760



24,243


Farmland assets


722,384



825,259


Long term deposits


1,367,267



2,157,275


Other noncurrent assets


1,111,490



1,196,197


Operating lease right-of-use assets


15,706,120



-


Intangible assets, net


3,731,008



3,597,323



Total other assets


22,650,029



7,800,297










Total assets

$

87,149,801


$

72,730,636







LIABILITIES AND STOCKHOLDERS' EQUITY






CURRENT LIABILITIES







Accounts payable, trade


23,606,067



23,106,230


Notes payable


21,383,423



25,951,673


Other payables


2,774,674



3,197,221


Other payables - related parties


315,034



795,179


Customer deposits


1,447,720



771,942


Taxes payable


278,908



125,859


Accrued liabilities


873,708



1,264,182


Long-term loan-current potion


233,480



-


Current portion of operating lease liabilities


2,267,705



-



Total current liabilities


53,180,719



55,212,286







Long-term loan


428,047



-

Long term operating lease liabilities


11,785,742



-


Purchase option and warrants liability


54,828



465,248


Financial liability


77,048



81,935



Total liabilities


65,526,384



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 September 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 September 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


(33,947,382)



(30,587,468)


Accumulated other comprehensive income


1,567,391



2,508,964



Total stockholders' equity


23,171,356



18,165,206



Noncontrolling interests


(1,547,939)



(1,194,039)



Total equity


21,623,417



16,971,167




Total liabilities and stockholders' equity

$

87,149,801


$

72,730,636

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)


For the three months ended


For the six months ended


September 30,

September 30, 


2019


2018


2019


2018









REVENUES, NET

$

28,353,779


$

27,409,046


$

53,634,563


$

50,181,612













COST OF GOODS SOLD


21,660,415



21,611,945



40,879,761



38,767,708













GROSS PROFIT


6,693,364



5,797,101



12,754,802



11,413,904













SELLING EXPENSES


6,485,848



5,223,523



12,454,399



9,850,501

GENERAL AND ADMINISTRATIVE EXPENSES


1,823,935



2,215,484



4,675,547



3,770,012

TOTAL OPERATING EXPENSES


8,309,783



7,439,007



17,129,946



13,620,513













LOSS FROM OPERATIONS


(1,616,419)



(1,641,906)



(4,375,144)



(2,206,609)













INTEREST INCOME


340,514



26,060



388,387



73,232

OTHER INCOME(LOSS), NET


(72,225)



94,582



(134,710)



(20,359)













CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITIES


6,865



(81,866)



410,420



(88,840)













LOSS BEFORE INCOME TAXES


(1,341,265)



(1,603,130)



(3,711,047)



(2,242,576)













PROVISION FOR INCOME TAXES


5,702



(415)



14,090



56,754













NET LOSS


(1,346,967)



(1,602,715)



(3,725,137)



(2,299,330)














ADD: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST


122,004



15,298



365,223



66,060














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


(1,224,963)



(1,587,417)



(3,359,914)



(2,233,270)













Foreign currency translation adjustments


(536,335)



(1,448,661)



(941,573)



(827,027)













COMPREHENSIVE LOSS

$

(1,883,302)


$

(3,051,376)


$

(4,666,710)


$

(3,126,357)













WEIGHTED AVERAGE NUMBER OF SHARES:












Basic


32,936,786



28,936,778



32,696,348



28,936,778

Diluted


32,936,786



28,936,778



32,696,348



28,936,778













EARNINGS PER SHARES:












Basic

$

(0.04)


$

(0.06)


$

(0.10)


$

(0.08)

Diluted

$

(0.04)


$

(0.06)


$

(0.10)


$

(0.08)

 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES


CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)


For the six months ended


September 30,


2019


2018

CASH FLOWS FROM OPERATING ACTIVITIES:




Net loss

$

(3,725,137)


$

(2,299,330)

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







Bad debt direct write-off and provision


767,250



890,576


Depreciation and amortization


1,051,907



557,930


Stock based compensation


34,560



71,427


Change in fair value of purchase option derivative liability


(410,420)



88,840


Accounts receivable, trade


555,289



(833,992)


Notes receivable


92,655



32,528


Inventories and biological assets


975,170



(1,587,645)


Other receivables


(206,247)



(800,686)


Advances to suppliers


(106,790)



(611,849)


Other current assets


(1,031,185)



469,985


Long term deposit


682,504



18,851


Other noncurrent assets


13,791



(139,597)


Accounts payable, trade


1,938,015



(603,967)


Other payables and accrued liabilities


(568,457)



1,305,221


Customer deposits


744,912



773,748


Taxes payable


165,692



(253,496)



Net cash (used in) operating activities


973,509



(2,921,456)







CASH FLOWS FROM INVESTING ACTIVITIES:







Disposal of financial assets available for sale


14,457



88,897


Purchase of financial assets available for sale





(91,099)


Acquisition of equipment


(374,992)



(142,681)


Increase in intangible assets


(462,266)



-


Investment in a joint venture


-



-


Additions to leasehold improvements


(622,464)



(244,047)



Net cash used in investing activities


(1,445,265)



(388,930)







CASH FLOWS FROM FINANCING ACTIVITIES:







Proceeds from third parties loan


682,692





Proceeds from notes payable


21,745,277



16,177,514


Repayment of notes payable


(24,862,363)



(18,290,325)


Proceeds from equity financing


9,273,077



7,667


Repayment of other payables-related parties


(458,002)



(84,543)



Net cash provided by (used in) financing activities


6,380,681



(2,189,687)







EFFECT OF EXCHANGE RATE ON CASH


(1,368,958)



(2,243,149)







DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH


4,539,967



(7,743,222)







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

$

29,285,169


$

23,708,969







SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:







Cash paid for income taxes

$

28,777


$

57,460

 

Cision View original content:http://www.prnewswire.com/news-releases/china-jo-jo-drugstores-reports-second-quarter-2020-financial-results-300958254.html

Source: China Jo-Jo Drugstores, Inc.
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