Revenue for the three months ended June 30, 2018 increased by $1.10 million, or 5.1%, to $22.77 million from $21.67 million for the same period of last year.
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HANGZHOU, China, Aug. 14, 2018 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (NASDAQ: CJJD) ("Jo-Jo Drugstores" or the "Company"), a leading online and offline retailer and wholesale distributor of pharmaceutical and other healthcare products and a healthcare provider in China, today announced its financial results for the first quarter ended June 30, 2018. Mr. Lei Liu, Chief Executive Officer and Chairman of Jo-Jo Drugstores, Inc., commented, "We continue to emphasize our retail strategy as we report our first quarter results for fiscal year 2019. Our gross margin for retail drug stores for the first quarter was 30.1%, up from 25.2% from the same period last year, as we emphasized increasing profit margins, introducing new suppliers, and renegotiating prices with our suppliers in our adjustments to corporate operational strategy. This margin expansion was coupled with a healthy 22.6% increase in revenue from retail drugstores year over year as we continue to execute on our strategy to capture the high-income Hangzhou urban center market. We are pleased with these strong results to start the new fiscal year as we continue to improve our business fundamentals and grow our market share in the expanding healthcare market." First Quarter of Fiscal 2019 Financial Highlights
For the Three Months Ended June 30,
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($ millions, except per share data) 2018 2017 % Change
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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%
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*Notes: pp represents percentage points
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 $21.67 million for the same period of last year. The increase in revenue was primarily due to the increase in retail drugstores business, partially offset by the decrease in online pharmacy business and wholesale business. For the Three Months Ended June 30,
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2018 2017
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($ millions) Revenues Cost of Gross Revenues Cost of Gross
Goods Margin Goods Margin
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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%
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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 Steve Liu Investor Relations Contact: Tina Xiao
CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
June 30, March 31,
2018 2018
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ASSETS
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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
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Total current assets 53,198,603 62,320,142
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PROPERTY AND EQUIPMENT, net 2,708,381 2,843,640
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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
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Total other assets 8,669,793 8,648,910
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Total assets $64,576,776 $73,812,692
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LIABILITIES AND STOCK HOLDERS' EQUITY
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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
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Total current liabilities 46,212,185 54,811,491
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Purchase option and warrants liability 145,770 138,796
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Total liabilities 46,357,955 54,950,287
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COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock; $0.001 par value; 250,000,000 shares authorized; 25,214,678 and 28,937 28,937
25,214,678 shares issued and outstanding as of June 30, 2018 and March 31, 2018
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
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Total stockholders' equity 18,887,327 18,862,405
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Noncontrolling interests (668,506) -
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Total equity 18,218,821 18,862,405
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Total liabilities and stockholders' equity $64,576,776 $73,812,692
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CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(LOSS)
For the three months
ended
June 30,
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2018 2017
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REVENUES, NET $22,772,566 $21,670,368
COST OF GOODS SOLD 17,155,763 17,492,707
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GROSS PROFIT 5,616,803 4,177,661
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SELLING EXPENSES 4,626,978 3,916,859
GENERAL AND ADMINISTRATIVE EXPENSES 1,554,528 1,725,443
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TOTAL OPERATING EXPENSES 6,181,506 5,642,302
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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 (6,974) (50,324)
LIABILITY
(LOSS) BEFORE INCOME TAXES (639,446) (1,398,766)
PROVISION FOR INCOME TAXES 57,169 20,538
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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
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COMPREHENSIVE (LOSS) (74,981) (960,235)
WEIGHTED AVERAGE NUMBER OF SHARES:
Basic 28,936,778 25,214,678
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Diluted 28,936,778 25,214,678
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(LOSS) PER SHARES:
Basic $(0.02) $(0.06)
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Diluted $(0.02) $(0.06)
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CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months
ended
June 30,
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2018 2017
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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)
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Net cash provided by operating activities (2,582,197) (3,611,268)
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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) -
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Net cash used in investing activities (257,897) (507,259)
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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)
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EFFECT OF EXCHANGE RATE ON CASH (136,720) 458,201
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DECREASE IN CASH (6,227,223) (4,004,859)
CASH, beginning of year 15,132,640 18,364,424
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CASH, end of year $8,905,417 $14,359,565
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SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes $27,832 $26,853
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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. |
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Company Codes: NASDAQ-SMALL:CJJD |
