HANGZHOU, China, Aug. 14, 2018 /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 healthcare provider in China, today announced its financial results
for the first quarter ended June 30,
2018.
Mr. Lei Liu, Chief Executive Officer and Chairman of Jo-Jo
Drugstores, Inc., commented, "We continue to emphasize our retail
strategy as we report our first quarter results for fiscal year
2019. Our gross margin for retail drug stores for the first quarter
was 30.1%, up from 25.2% from the same period last year, as we
emphasized increasing profit margins, introducing new suppliers,
and renegotiating prices with our suppliers in our adjustments to
corporate operational strategy. This margin expansion was coupled
with a healthy 22.6% increase in revenue from retail drugstores
year over year as we continue to execute on our strategy to capture
the high-income Hangzhou urban
center market. We are pleased with these strong results to start
the new fiscal year as we continue to improve our business
fundamentals and grow our market share in the expanding healthcare
market."
First Quarter of
Fiscal 2019 Financial Highlights
|
|
|
|
For the Three
Months Ended June 30,
|
($ millions,
except per share data)
|
|
2018
|
|
2017
|
|
%
Change
|
Revenue
|
|
22.77
|
|
21.67
|
|
5.1%
|
Retail
drugstores
|
|
15.97
|
|
13.02
|
|
22.6%
|
Online
pharmacy
|
|
2.02
|
|
3.14
|
|
-35.5%
|
Wholesale
|
|
4.78
|
|
5.51
|
|
-13.3%
|
Gross
profit
|
|
5.62
|
|
4.18
|
|
34.4%
|
Gross
margin
|
|
24.7%
|
|
19.3%
|
|
5.4 pp*
|
Loss from
operations
|
|
-0.56
|
|
-1.46
|
|
-61.4%
|
Operating
margin
|
|
-2.5%
|
|
-6.8%
|
|
4.3%
|
Net loss attributable
to Jo-Jo Drugstores
|
|
(0.65)
|
|
(1.42)
|
|
-54.5%
|
Loss per
share
|
|
(0.02)
|
|
(0.06)
|
|
-62.8%
|
|
*Notes: pp represents
percentage points
|
- Revenue increased by 5.1% to $22.77
million for the three months ended June 30, 2018 from $21.67
million for the same period of last year.
- Gross profit increased by 34.4% to $5.62
million for the three months ended June 30, 2018 from $4.18
million for the same period of last year.
- Gross margin increased by 5.4 percentage points to 24.7% from
19.3% for the same period of last year.
- Net loss attributable to Jo-Jo Drugstores decreased by 54.5% to
$0.65 million, or $0.02 per basic and diluted share, for the three
months ended June 30, 2018 from
$1.42 million, or $0.06 per basic and diluted share, for the same
period of last year.
First Quarter of Fiscal 2019 Financial Results
Revenue
Revenue for the three months ended June
30, 2018 increased by $1.10
million, or 5.1%, to $22.77
million from $21.67 million
for the same period of last year. The increase in revenue was
primarily due to the increase in retail drugstores business,
partially offset by the decrease in online pharmacy business and
wholesale business.
|
|
For the Three
Months Ended June 30,
|
|
|
2018
|
|
2017
|
($
millions)
|
|
Revenues
|
|
Cost of
Goods
|
|
Gross
Margin
|
|
Revenues
|
|
Cost of
Goods
|
|
Gross
Margin
|
Retail
drugstores
|
|
15.97
|
|
11.16
|
|
30.1%
|
|
13.02
|
|
9.74
|
|
25.2%
|
Online
pharmacy
|
|
2.02
|
|
1.74
|
|
13.9%
|
|
3.14
|
|
2.84
|
|
9.3%
|
Wholesale
|
|
4.78
|
|
4.25
|
|
11.1%
|
|
5.51
|
|
4.91
|
|
10.9%
|
Total
|
|
22.77
|
|
17.16
|
|
24.7%
|
|
21.67
|
|
3.14
|
|
19.3%
|
Revenue from the retail drugstores business increased by
$2.95 million, or 22.6%, to
$15.97 million for the three months
ended June 30, 2018 from $13.02 million for the same period of last year.
The increase was primarily due to new store sales contributions and
benefits such as emphasis on onsite medical care, incremental
Direct-to-Patient ("DTP") business caused by continuous hospital
medical reform, and promotional campaigns.
Revenue from the online pharmacy business decreased by
$1.11 million, or 35.5%, to
$2.02 million for the three months
ended June 30, 2018 from $3.14 million for the same period of last year.
The decrease was mainly caused by a decline in our sales via
e-commerce platforms and the suspension of OTC drug sales on
e-commerce platforms, offset by the increase in business referred
from Pharmacy Benefit Management ("PBM") providers, and. The
Company is adding more non-medical health products such as
nutritional supplements into our sales menu to counteract the
decline in sales of OTC drug category via e-commerce platforms.
Revenue from the wholesale business decreased by $0.73 million, or 13.3%, to $4.78 million for the three months ended
June 30, 2018 from $5.51 million for the same period of last year.
The decrease was primarily due to the departure of a key
salesperson, which caused the Company to suffer loss of certain
business.
Gross profit and gross margin
Total cost of goods sold decreased by $0.34 million, or 1.9%, to $17.16 million for the three months ended
June 30, 2018 from $17.49 million for the same period of last year.
Gross profit increased by $1.44
million, or 34.4%, to $5.62
million for three months ended June
30, 2018 from $4.18 million
for the same period of last year. Overall gross margin increased by
5.4 percentage points to 24.7% for the three months ended
June 30, 2018, compared to 19.3% for
the same period of last year.
Gross margins for retail drugstores, online pharmacy and
wholesale were 30.1%, 13.9%, and 11.1%, respectively, for the three
months ended June 30, 2018. This
compared to gross margins for retail drugstores, online pharmacy
and wholesale of 25.2%, 9.3%, and 10.9%, respectively, for the same
period of last year.
Loss from operations
Selling and marketing expenses increased by $0.71 million, or 18.1%, to $4.63 million for the three months ended
June 30, 2018 from $3.92 million for the same period of last year.
The increase in selling and marketing expenses was primarily due to
increase in marketing and sales staff expenses related to store
expansion, offset by a decline in expense of wholesale
business.
General and administrative expenses decreased by $0.17 million, or 9.9%, to $1.55 million for the three months ended
June 30, 2018 from $1.73 million for the same period of last year.
The decrease in general and administrative expenses was caused by a
decrease in administrative fees of wholesale business due to
logistics outsourcing. Stock compensation has decreased by
approximately $0.29 million as
certain stock compensation has been fully amortized into the
expenses in fiscal year 2018 and no additional expenses were
incurred in the three months ended June
30, 2018.
Loss from operations decreased by $0.90
million, or 61.4%, to $0.56
million for the three months ended June 30, 2018 from $1.46
million for the same period of last year. Operating margin
was negative 2.5% for the three months ended June 30, 2018, compared to negative 6.8% for the
same period of last year.
Net loss
Net loss decreased by $0.72
million, or 50.9%, to $0.70
million for the three months ended June 30, 2018 from $1.42
million for the same period of last year. Net loss
attributable to common shareholders for the three months ended
June 30, 2018 was $0.65 million, or $0.02 per basic and diluted share. This compared
to net loss attributable to common shareholders of $1.42 million, $0.06 per basic and diluted share, for the same
period of last year.
Financial Condition
As of June 30, 2018, the Company
had cash of $8.91 million, compared
to $15.13 million as of March 31, 2018. Net cash used in operating
activities was $2.58 million for the
three months ended June 30, 2018,
compared to $3.61 million for the
same period of last year. Net cash used in investing activities was
$0.26 million for the three months
ended June 30, 2018, compared to
$0.51 million for the same period of
last year. Net cash used in financing activities was $3.25 million for the three months ended
June 30, 2018, compared to
$0.34 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 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 and sells herbs used for traditional Chinese
medicine. For more information about the Company, please visit
http://www.chinajojodrugstores.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
|
|
|
June 30,
|
|
March 31,
|
|
2018
|
|
2018
|
ASSETS
|
|
|
|
CURRENT
ASSETS
|
|
|
|
Cash
|
$
|
8,905,417
|
|
$
|
15,132,640
|
Restricted
cash
|
|
14,037,057
|
|
|
16,319,551
|
Financial assets
available for sale
|
|
172,498
|
|
|
175,140
|
Notes
receivable
|
|
394,194
|
|
|
279,082
|
Trade accounts
receivable
|
|
6,877,684
|
|
|
8,322,393
|
Inventories
|
|
13,703,245
|
|
|
13,429,568
|
Other receivables,
net
|
|
3,712,098
|
|
|
3,098,079
|
Advances to
suppliers
|
|
3,887,251
|
|
|
3,447,452
|
Other current
assets
|
|
1,509,159
|
|
|
2,116,237
|
Total current
assets
|
|
53,198,603
|
|
|
62,320,142
|
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT, net
|
|
2,708,381
|
|
|
2,843,640
|
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
|
Long-term
investment
|
|
153,573
|
|
|
40,890
|
Farmland
assets
|
|
791,795
|
|
|
796,286
|
Long term
deposits
|
|
2,469,844
|
|
|
2,501,968
|
Other noncurrent
assets
|
|
1,335,493
|
|
|
1,253,352
|
Intangible assets,
net
|
|
3,919,088
|
|
|
4,056,414
|
Total other
assets
|
|
8,669,793
|
|
|
8,648,910
|
|
|
|
|
|
|
Total
assets
|
$
|
64,576,776
|
|
$
|
73,812,692
|
|
|
|
|
|
|
LIABILITIES AND STOCK
HOLDERS' EQUITY
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
Accounts payable,
trade
|
|
22,419,005
|
|
|
25,259,526
|
Notes
payable
|
|
13,559,626
|
|
|
19,180,200
|
Other
payables
|
|
4,571,800
|
|
|
4,272,523
|
Other payables -
related parties
|
|
754,727
|
|
|
850,342
|
Customer
deposits
|
|
4,000,968
|
|
|
4,040,867
|
Taxes
payable
|
|
68,571
|
|
|
366,040
|
Accrued
liabilities
|
|
837,488
|
|
|
841,993
|
Total current
liabilities
|
|
46,212,185
|
|
|
54,811,491
|
|
|
|
|
|
|
Purchase option and
warrants liability
|
|
145,770
|
|
|
138,796
|
Total
liabilities
|
|
46,357,955
|
|
|
54,950,287
|
|
|
|
|
|
|
COMMITMENTS AND
CONTINGENCIES
|
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
Common stock; $0.001
par value; 250,000,000 shares authorized; 25,214,678 and
25,214,678 shares issued and outstanding as of
June 30, 2018 and March 31, 2018
|
|
28,937
|
|
|
28,937
|
Preferred stock;
$0.001 par value; 10,000,000 shares authorized; nil issued
and
outstanding as of June 30, 2018 and March 31,
2018
|
|
-
|
|
|
-
|
Additional paid-in
capital
|
|
43,648,229
|
|
|
43,599,089
|
Statutory
reserves
|
|
1,309,109
|
|
|
1,309,109
|
Accumulated
deficit
|
|
(30,307,042)
|
|
|
(29,661,190)
|
Accumulated other
comprehensive income
|
|
4,208,094
|
|
|
3,586,460
|
Total stockholders'
equity
|
|
18,887,327
|
|
|
18,862,405
|
Noncontrolling
interests
|
|
(668,506)
|
|
|
-
|
Total
equity
|
|
18,218,821
|
|
|
18,862,405
|
Total liabilities and
stockholders' equity
|
$
|
64,576,776
|
|
$
|
73,812,692
|
CHINA JO-JO
DRUGSTORES, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
|
(LOSS)
|
|
|
|
For the three
months
ended
June 30,
|
|
|
2018
|
|
2017
|
REVENUES,
NET
|
|
$
|
22,772,566
|
|
$
|
21,670,368
|
|
|
|
|
|
|
|
COST OF GOODS
SOLD
|
|
|
17,155,763
|
|
|
17,492,707
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
5,616,803
|
|
|
4,177,661
|
|
|
|
|
|
|
|
SELLING
EXPENSES
|
|
|
4,626,978
|
|
|
3,916,859
|
GENERAL AND
ADMINISTRATIVE EXPENSES
|
|
|
1,554,528
|
|
|
1,725,443
|
TOTAL OPERATING
EXPENSES
|
|
|
6,181,506
|
|
|
5,642,302
|
|
|
|
|
|
|
|
LOSS FROM
OPERATIONS
|
|
|
(564,703)
|
|
|
(1,464,641)
|
|
|
|
|
|
|
|
INTEREST
INCOME
|
|
|
47,172
|
|
|
44,899
|
INTEREST
EXPENSE
|
|
|
-
|
|
|
-
|
OTHER (EXPENSE)
INCOME, NET
|
|
|
(114,941)
|
|
|
(29,348)
|
CHANGE IN FAIR VALUE
OF PURCHASE OPTION AND WARRANTS
LIABILITY
|
|
|
(6,974)
|
|
|
(50,324)
|
|
|
|
|
|
|
|
(LOSS) BEFORE INCOME
TAXES
|
|
|
(639,446)
|
|
|
(1,398,766)
|
|
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES
|
|
|
57,169
|
|
|
20,538
|
|
|
|
|
|
|
|
NET (LOSS)
|
|
|
(696,615)
|
|
|
(1,419,304)
|
|
|
|
|
|
|
|
ADD: NET
(LOSS) ATTRIBUTABLE TO NONCONTROLLING INTEREST
|
|
|
50,763
|
|
|
-
|
|
|
|
|
|
|
|
NET (LOSS)
ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC.
|
|
|
(645,852)
|
|
|
(1,419,304)
|
|
|
|
|
|
|
|
FOREIGN CURRENCY
TRANSLATION ADJUSTMENTS
|
|
|
621,634
|
|
|
459,069
|
|
|
|
|
|
|
|
COMPREHENSIVE
(LOSS)
|
|
|
(74,981)
|
|
|
(960,235)
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
NUMBER OF SHARES:
|
|
|
|
|
|
|
Basic
|
|
|
28,936,778
|
|
|
25,214,678
|
Diluted
|
|
|
28,936,778
|
|
|
25,214,678
|
|
|
|
|
|
|
|
(LOSS) PER
SHARES:
|
|
|
|
|
|
|
Basic
|
|
$
|
(0.02)
|
|
$
|
(0.06)
|
Diluted
|
|
$
|
(0.02)
|
|
$
|
(0.06)
|
CHINA JO-JO
DRUGSTORES, INC. AND SUBSIDIARIES
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
|
|
|
For the three
months
ended
June 30,
|
|
|
2018
|
|
2017
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
Net loss
|
|
$
|
(696,615)
|
|
$
|
(1,419,304)
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
Bad debt direct
write-off and provision
|
|
|
259,279
|
|
|
212,199
|
Depreciation and
amortization
|
|
|
293,095
|
|
|
289,058
|
Stock based
compensation
|
|
|
49,140
|
|
|
343,480
|
Change in fair value
of purchase option derivative liability
|
|
|
6,974
|
|
|
(50,324)
|
Accounts receivable,
trade
|
|
|
1,077,419
|
|
|
(537,768)
|
Notes
receivable
|
|
|
(114,944)
|
|
|
85,434
|
Inventories and
biological assets
|
|
|
(458,803)
|
|
|
(387,176)
|
Other
receivables
|
|
|
(401,205)
|
|
|
365,954
|
Advances to
suppliers
|
|
|
(775,014)
|
|
|
450,107
|
Other current
assets
|
|
|
554,048
|
|
|
(66,556)
|
Long term
deposit
|
|
|
(5,415)
|
|
|
(772,661)
|
Other noncurrent
assets
|
|
|
(97,341)
|
|
|
(162,049)
|
Accounts payable,
trade
|
|
|
(2,369,206)
|
|
|
(1,518,372)
|
Other payables and
accrued liabilities
|
|
|
357,335
|
|
|
(346,903)
|
Customer
deposits
|
|
|
20,290
|
|
|
83,096
|
Taxes
payable
|
|
|
(281,235)
|
|
|
(179,483)
|
Net cash provided by
operating activities
|
|
|
(2,582,197)
|
|
|
(3,611,268)
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
Purchase of financial
assets available for sale
|
|
|
-
|
|
|
(72,875)
|
Acquisition of
equipment
|
|
|
(32,753)
|
|
|
(17,340)
|
Increase in
construction-in-progress
|
|
|
-
|
|
|
(336,882)
|
Increase intangible
assets
|
|
|
-
|
|
|
(80,162)
|
Additions to
leasehold improvements
|
|
|
-
|
|
|
-
|
Investment in a joint
venture
|
|
|
(109,142)
|
|
|
-
|
Additions to
leasehold improvements
|
|
|
(116,002)
|
|
|
-
|
Net cash used in
investing activities
|
|
|
(257,897)
|
|
|
(507,259)
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
Change in restricted
cash
|
|
|
1,961,576
|
|
|
(531,031)
|
Proceeds from notes
payable
|
|
|
10,376,504
|
|
|
8,684,688
|
Repayment of notes
payable
|
|
|
(15,512,104)
|
|
|
(8,410,741)
|
Changes in other
payables-related parties
|
|
|
-
|
|
|
(87,449)
|
Proceeds from equity
and debt financing
|
|
|
7,629
|
|
|
-
|
Repayment of other
payables-related parties
|
|
|
(84,014)
|
|
|
-
|
Net cash provided by
(used in) financing activities
|
|
|
(3,250,409)
|
|
|
(344,533)
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE ON CASH
|
|
|
(136,720)
|
|
|
458,201
|
|
|
|
|
|
|
|
DECREASE IN
CASH
|
|
|
(6,227,223)
|
|
|
(4,004,859)
|
|
|
|
|
|
|
|
CASH, beginning of
year
|
|
|
15,132,640
|
|
|
18,364,424
|
|
|
|
|
|
|
|
CASH, end of
year
|
|
$
|
8,905,417
|
|
$
|
14,359,565
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
Cash paid for income
taxes
|
|
$
|
27,832
|
|
$
|
26,853
|
View original
content:http://www.prnewswire.com/news-releases/china-jo-jo-drugstores-reports-first-quarter-2019-financial-results-300696659.html
SOURCE China Jo-Jo Drugstores,
Inc.