China Jo-Jo Drugstores Reports First Half of Fiscal Year 2022 Financial Results
HANGZHOU, China, Jan. 21, 2022 /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 half of fiscal year 2022 ended September 30, 2021.
Mr. Lei Liu, Chairman and CEO of Jo-Jo Drugstores, commented, "We are pleased to have delivered a solid performance during the first half of fiscal year 2022 as we navigate through a challenging operating environment affected by multiple COVID-19 surges. We achieved record revenue of $78.48 million, up 26.8% from the same period of last year, and narrowed down 86% of net loss compared to the same period of last year. Revenue from online pharmacy and wholesale segments increased by 33.5% and 63.6%, respectively, which reflects the efforts of our team as we continue to expand our business. Our strong financial performance once again demonstrates the continuing momentum across the Company as the market recognizing the quality of our products and the brand awareness of Jo-Jo Drugstores. Our unrivaled quality management, reliable supply chains, extensive distribution network and industry-leading talent team are the reasons of the results."
Mr. Liu continued, "ESG, standing for 'Environment, Society and Governance', is embedded in our core value and we are committed to improving the community we serve and protecting the lives of our employees and customers. We received 2021 China ESG Golden Awards, a Sustainability Award from Sina Finance, which recognizes our meaningful progress in delivering social and environmental benefits. The project "Healthy China 2030" will enhance the reformation and innovation in the healthcare industry. To seize this opportunity, we will continue focusing on providing excellent in-store services, accelerating digital transformation and upgrading our business model. We believe that our capability, operational performance and diversified distribution channels will enable us to generate additional revenue and create greater value for our shareholders in the long term."
First Six Months of Fiscal Year 2022 Financial Highlights
For the Six Months Ended September 30, | ||||||
($ millions, except per share data) | 2021 | 2020 | % Change | |||
Revenue | 78.48 | 61.90 | 26.8% | |||
Retail drugstores | 40.42 | 36.74 | 10.0% | |||
Online pharmacy | 13.70 | 10.26 | 33.5% | |||
Wholesale | 24.36 | 14.90 | 63.6% | |||
Gross profit | 15.40 | 14.99 | 2.7% | |||
Gross margin | 19.6% | 24.2% | -4.6 pp* | |||
Loss from operations | (0.49) | (1.94) | 74.6% | |||
Net loss | (0.27) | (1.92) | 86.0% | |||
Loss per share | (0.01) | (0.05) | 80.0% | |||
*Notes: pp represents percentage points
- Revenue increased by 26.8% to $78.48 million for the six months ended September 30, 2021 from $61.90 million for the same period of last year.
- Gross profit increased by 2.7% to $15.40 million for the six months ended September 30, 2021 from $14.99 million for the same period of last year.
- Gross margin decreased by 4.6 percentage points to 19.6% for the six months ended September 30, 2021 from 24.2% for the same period of last year.
- Net loss was $0.27 million, or $0.01 per basic and diluted share, for the six months ended September 30, 2021, compared to net loss of $1.92 million, or $0.05 per basic and diluted share, for the same period of last year.
First Six Months of Fiscal Year 2022 Financial Results
Revenue
Revenue for the six months ended September 30, 2021 increased by $16.58 million, or 26.8%, to $78.48 million from $61.90 million for the same period of last year. The increase in revenue was primarily due to the growth in online pharmacy and wholesale business.
For the Six Months Ended September 30, | ||||||||||||
2021 | 2020 | |||||||||||
($ millions) | Revenue | Cost of | Gross | Revenue | Cost of | Gross | ||||||
Retail drugstores | 40.42 | 28.90 | 28.5% | 36.74 | 24.73 | 32.7% | ||||||
Online pharmacy | 13.70 | 12.29 | 10.3% | 10.26 | 8.97 | 12.5% | ||||||
Wholesale | 24.36 | 21.90 | 10.1% | 14.90 | 13.20 | 11.4% | ||||||
Total | 78.48 | 63.09 | 19.6% | 61.90 | 46.90 | 24.2% | ||||||
Revenue from the retail drugstores business increased by $3.68 million, or 10.0%, to $40.42 million for the six months ended September 30, 2021 from $36.74 million for the same period of last year. After excluding the impact of exchange rate fluctuation, the actual retail drugstores sales increased by 2.0%. The actual increase in retail drugstore sales was primarily due to continuous adjustments of merchandises, better fitness to the market, improved store employee incentive plan, and contribution from the new store sales.
Revenue from the online pharmacy business increased by $3.44 million, or 33.5%, to $13.70 million for the six months ended September 30, 2021 from $10.26 million for the same period of last year. The increase was primarily caused by an increase in sales to commercial insurance customers via the Company's official website and an increase in sales of prescription drugs via e-commerce platforms such as Tmall. The sales via the Company's official website were primarily made by certain pharmacy benefit management providers and insurance companies. For example, the Company has signed a service contract with Yingda Taihe Life Insurance Co. Ltd. ("Yingda"), a national insurance company. Certain companies bought private health insurances from Yingda for their employees. By linking the Company's online pharmacy platform with Yingda and training Yingda's employees, they are able to buy health products on the Company's online stores. The sales from these customers contributed significantly to the Company's official website sales. The Company's official website sales increased by 85.5% as compared to the same period of last year. Prescription drugs used to be prohibited from online sales due to safety concern. After the nation has lifted the ban order, online prescription drug sales become popular. As a result, the sale of prescription drugs was $4.93 million for the six months ended September 30, 2021. For the same period of last year, it was $3.63 million.
Revenue from the wholesale business increased by $9.47 million, or 63.6%, to $24.37 million for the six months ended September 30, 2021, from $14.90 million for the same period of last year. In order to obtain rebates from its major suppliers, the Company is required to make more purchase from the suppliers. To quickly resell these products, the Company chose to lower its sales price to local vendors, which in turn helped increase the sales significantly.
Gross profit and gross margin
Total cost of goods sold increased by $16.19 million, or 34.5%, to $63.09 million for the six months ended September 30, 2021, from $46.90 million for the same period of last year. Gross profit increased by $0.41 million, or 2.7%, to $15.40 million for six months ended September 30, 2021 from $14.99 million for the same period of last year. Overall gross margin decreased by 4.6 percentage points to 19.6% for the six months ended September 30, 2021, from 24.2% for the same period of last year.
Gross margins for retail drugstores, online pharmacy and wholesale were 28.5%, 10.3%, and 10.1%, respectively, for the six months ended September 30, 2021, compared to gross margins for retail drugstores, online pharmacy and wholesale of 32.7%, 12.5%, and 11.4%, respectively, for the same period of last year.
Loss from operations
Selling and marketing expenses increased by $0.54 million, or 4.3%, to $13.29 million for the six months ended September 30, 2021 from $12.75 million for the same period of last year. The increase in selling and marketing expenses was primarily due to increase in fees charged by various platforms as a result of sales increase in the Company's online pharmacy.
General and administrative expenses decreased by $1.58 million, or 37.9%, to $2.60 million for the six months ended September 30, 2021 from $4.18 million for the same period of last year. The decrease in general and administrative expenses was primarily due to the decrease in labor cost. In response to the government insurance budget control, the Company cut off certain administration staff and combined several administrative duties. Additionally, in the six months ended September 30, 2021, the Company provided bonus to certain key staff. Such expenses, as a percentage of revenue, decreased to 3.3% from 6.8% for the same period of last year.
Loss from operations was $0.49 million for the six months ended September 30, 2021, compared to $1.94 million for the same period of last year. Operating margin was (0.6) % and (3.1)% for the six months ended September 30, 2021 and 2020, respectively.
Net loss
Net loss was $0.27 million, or $0.01 per basic and diluted share for the six months ended September 30, 2021, compared to net loss of $1.92 million, or $0.05 per basic and diluted share for the same period of last year.
Financial Condition
As of September 30, 2021, the Company has cash of $24.61 million, compared to $22.05 million as of March 31, 2021. Net cash provided by operating activities is $0.50 million for the six months ended September 30, 2021, compared to net cash used in operating activities of $0.35 million for the same period of last year. Net cash used in investing activities is $0.19 million for the six months ended September 30, 2021, compared to $1.76 million for the same period of last year. Net cash provided by financing activities is $3.43 million for the six months ended September 30, 2021, compared to $4.55 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
[email protected]
Investor Relations Contact:
Tina Xiao
Ascent Investor Relations LLC
+1-917-609-0333
[email protected]
CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(UNAUDITED) | ||||||||
September 30, | March 31, | |||||||
2021 | 2021 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 24,611,175 | $ | 22,045,628 | ||||
Restricted cash | 14,576,183 | 12,627,016 | ||||||
Financial assets available for sale | 92,940 | 91,472 | ||||||
Notes receivable | 97,195 | 39,392 | ||||||
Trade accounts receivable | 14,079,343 | 13,423,728 | ||||||
Inventories | 17,443,466 | 16,972,965 | ||||||
Other receivables, net | 5,768,743 | 5,051,960 | ||||||
Advances to suppliers | 2,919,052 | 421,963 | ||||||
Other current assets | 1,610,682 | 1,560,119 | ||||||
Total current assets | 81,198,779 | 72,234,243 | ||||||
PROPERTY AND EQUIPMENT, net | 6,212,655 | 6,549,035 | ||||||
OTHER ASSETS | ||||||||
Long-term investment | 3,981,986 | 3,981,986 | ||||||
Farmland assets | 857,176 | 835,427 | ||||||
Long term deposits | 1,681,417 | 1,546,764 | ||||||
Other noncurrent assets | 834,298 | 856,391 | ||||||
Operating lease right-of-use assets | 18,580,840 | 16,778,729 | ||||||
Intangible assets, net | 3,538,707 | 3,528,056 | ||||||
Total other assets | 29,474,424 | 27,527,353 | ||||||
Total assets | $ | 116,885,858 | $ | 106,310,631 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Short-term bank loan | - | 762,270 | ||||||
Accounts payable, trade | 32,828,259 | 29,895,830 | ||||||
Notes payable | 31,299,086 | 25,663,633 | ||||||
Other payables | 3,842,964 | 2,940,000 | ||||||
Other payables - related parties | 1,133,803 | 445,305 | ||||||
Customer deposits | 1,642,586 | 1,146,247 | ||||||
Taxes payable | 519,531 | 197,733 | ||||||
Accrued liabilities | 396,787 | 501,111 | ||||||
Long-term loan payable-current portion | 2,643,513 | 2,557,634 | ||||||
Current portion of operating lease liabilities | 1,562,318 | 788,171 | ||||||
Total current liabilities | 75,868,847 | 64,897,934 | ||||||
Long-term loan payable | 590,640 | 1,892,269 | ||||||
Long-term operating lease liabilities | 16,063,306 | 15,118,083 | ||||||
Total liabilities | 92,522,793 | 81,908,286 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Common stock; $0.001 par value; 250,000,000 shares authorized; 41,751,790 and | 41,752 | 41,752 | ||||||
Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and | - | - | ||||||
Additional paid-in capital | 66,516,033 | 66,516,033 | ||||||
Statutory reserves | 1,309,109 | 1,309,109 | ||||||
Accumulated deficit | (45,205,117) | (44,942,374) | ||||||
Accumulated other comprehensive income | 3,046,753 | 2,818,185 | ||||||
Total stockholders' equity | 25,708,530 | 25,742,705 | ||||||
Noncontrolling interests | (1,345,465) | (1,340,360) | ||||||
Total equity | 24,363,065 | 24,402,345 | ||||||
Total liabilities and stockholders' equity | $ | 116,885,858 | $ | 106,310,631 | ||||
CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||
(UNAUDITED) | ||||||||
For the six months ended September 30, | ||||||||
2021 | 2020 | |||||||
REVENUES, NET | $ | 78,484,478 | $ | 61,896,857 | ||||
COST OF GOODS SOLD | 63,085,681 | 46,903,886 | ||||||
GROSS PROFIT | 15,398,797 | 14,992,971 | ||||||
SELLING EXPENSES | 13,292,931 | 12,747,919 | ||||||
GENERAL AND ADMINISTRATIVE EXPENSES | 2,598,175 | 4,181,725 | ||||||
TOTAL OPERATING EXPENSES | 15,891,106 | 16,929,644 | ||||||
LOSS FROM OPERATIONS | (492,309) | (1,936,673) | ||||||
OTHER INCOME (EXPENSE): | ||||||||
INTEREST INCOME | 110,291 | 351,255 | ||||||
INTEREST EXPENSE | (156,786) | (245,079) | ||||||
OTHER | 274,883 | (74,475) | ||||||
CHANGE IN FAIR VALUE OF PURCHASE OPTION AND WARRANTS | - | 27,784 | ||||||
LOSS BEFORE INCOME TAXES | (263,921) | (1,877,188) | ||||||
PROVISION FOR INCOME TAXES | 3,927 | 38,595 | ||||||
NET LOSS | (267,848) | (1,915,783) | ||||||
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST | (5,105) | (190,555) | ||||||
NET LOSS ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC. | (262,743) | (1,725,228) | ||||||
OTHER COMPREHENSIVE GAIN | ||||||||
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS | 228,568 | 1,125,030 | ||||||
COMPREHENSIVE LOSS | (39,280) | (790,753) | ||||||
WEIGHTED AVERAGE NUMBER OF SHARES: | ||||||||
Basic | 41,751,790 | 36,232,144 | ||||||
Diluted | 41,751,790 | 36,232,144 | ||||||
LOSS PER SHARES: | ||||||||
Basic | $ | (0.01) | $ | (0.05) | ||||
Diluted | $ | (0.01) | $ | (0.05) | ||||
CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES | ||||||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
(UNAUDITED) | ||||||||
For the six months ended September 30, | ||||||||
2021 | 2020 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net loss | $ | (267,848) | $ | (1,915,783) | ||||
Adjustments to reconcile net income to net cash provided by operating activities: | ||||||||
Bad debt direct write-off and provision | (159,978) | (286,076) | ||||||
Depreciation and amortization | 672,825 | 1,258,156 | ||||||
Change in fair value of purchase option derivative liability | - | (27,784) | ||||||
Accounts receivable, trade | (442,229) | 41,724 | ||||||
Notes receivable | (57,097) | (13,675) | ||||||
Inventories and biological assets | (197,928) | (448,573) | ||||||
Other receivables | (695,832) | 279,650 | ||||||
Advances to suppliers | (2,487,104) | (531,255) | ||||||
Other current assets | (94,153) | (853,289) | ||||||
Long term deposit | (109,694) | (15,106) | ||||||
Other noncurrent assets | 35,787 | 13,619 | ||||||
Accounts payable, trade | 2,449,608 | 2,362,338 | ||||||
Other payables and accrued liabilities | 1,055,417 | (845,411) | ||||||
Customer deposits | 477,331 | 509,549 | ||||||
Taxes payable | 318,214 | 123,082 | ||||||
Net cash used in operating activities | 497,319 | (348,834) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Acquisition of equipment | (73,471) | (33,968) | ||||||
Purchases of intangible assets | (6,962) | (55,038) | ||||||
Investment in a joint venture | - | (1,422,193) | ||||||
Additions to leasehold improvements | (105,638) | (246,846) | ||||||
Net cash used in investing activities | (186,071) | (1,758,045) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from short-term bank loan | - | 714,160 | ||||||
Repayment from short-term bank loan | (773,500) | - | ||||||
Repayment of third parties loan | (1,285,484) | (1,175,725) | ||||||
Proceeds from notes payable | 31,258,674 | 22,668,388 | ||||||
Repayment of notes payable | (26,041,718) | (26,949,176) | ||||||
Decrease in Employee Deposits | - | (57,133) | ||||||
Exercise of warrants | - | 77,500 | ||||||
Proceeds from equity financing | - | 9,205,173 | ||||||
Repayment of other payables-related parties | 269,994 | 68,994 | ||||||
Net cash provided by financing activities | 3,427,966 | 4,552,181 | ||||||
EFFECT OF EXCHANGE RATE ON CASH | 775,500 | 1,941,058 | ||||||
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 4,514,714 | 4,386,360 | ||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period | 34,672,644 | 30,982,606 | ||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, end of period | $ | 39,187,358 | $ | 35,368,966 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid for interest | 156,786 | 247,371 | ||||||
Cash paid for income taxes | $ | 3,927 | $ | 3,457 | ||||
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SOURCE China Jo-Jo Drugstores, Inc.