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
|
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.