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
|
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.