China Jo-Jo Drugstores Reports Fiscal Year 2021 Financial Results
HANGZHOU, China, June 29, 2021 /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 fiscal year ended March 31, 2021.
Mr. Lei Liu, Chairman and CEO of Jo-Jo Drugstores, commented, "We are pleased to present our financial results for the fiscal year 2021. Our revenue and gross profit record $133.13 million and $29.24 million for the fiscal year 2021, up 13.5% and 14.6% compared to the fiscal year 2020. Revenue from retail drugstores, online pharmacy, and wholesale segments increased by 2.7%, 66.1% and 16.3%, respectively, demonstrating that we successfully executed our multifaceted growth strategy and strategic transformation."
Mr. Liu continued, "The project of 'Healthy China 2030' brings us new opportunities since it will advance the healthcare sector reforms and greatly enhance overall medical service quality and efficiency in China. To realize the potential of our business model in this trend, we enhanced various information and data systems, continued to develop the management system for patients with chronic diseases, upgraded our 'Medical + Medicine' business model, introduced digital services, developed 24-hour service stores, launched a new Office Automation system, and accelerated comprehensive budget management. We aim to build a strong foundation for sustainable growth and engage with consumers from various platforms. As a leading consumer brand in China with a diversified portfolio of essential healthcare businesses, we are confident that we are on the right track to deliver significant value to all of our investors."
Fiscal Year 2021 Financial Highlights
For the Year Ended March 31, | ||||||
($ millions, except per share data) | 2021 | 2020 | % Change | |||
Revenue | 133.13 | 117.33 | 13.5% | |||
Retail drugstores | 76.10 | 74.08 | 2.7% | |||
Online pharmacy | 22.48 | 13.54 | 66.1% | |||
Wholesale | 34.55 | 29.71 | 16.3% | |||
Gross profit | 29.24 | 25.53 | 14.6% | |||
Gross margin | 22.0% | 21.8% | 0.2 pp* | |||
Loss from operations | (8.84) | (7.00) | -26.2% | |||
Net loss | (8.38) | (6.46) | -29.7% | |||
Loss per share | (0.20) | (0.18) | -11.1% | |||
*Notes: pp represents percentage points
- Revenue increased by 13.5% to $133.13 million for the fiscal year ended March 31, 2021 from $117.33 million for the prior fiscal year.
- Gross profit increased by 14.6% to $29.24 million for the fiscal year ended March 31, 2021 from $25.53 million for the prior fiscal year.
- Gross margin increased slightly by 0.2 percentage points to 22.0% for the fiscal year ended March 31, 2021 from 21.8% for the prior fiscal year.
- Net loss was $8.38 million, or $0.20 per basic and diluted share, for the fiscal year ended March 31, 2021, compared to net loss of $6.46 million, or $0.18 per basic and diluted share, for the prior fiscal year.
Fiscal Year 2021 Financial Results
Revenue
Revenue for the fiscal year ended March 31, 2021 increased by $15.80 million, or 13.5%, to $133.13 million from $117.33 million for the prior fiscal year. The increase in revenue was primarily due to the growth in retail drugstores business, online pharmacy and wholesale business.
For the Year Ended March 31, | ||||||||||||
2021 | 2020 | |||||||||||
($ millions) | Revenue | Cost of | Gross | Revenue | Cost of | Gross | ||||||
Retail drugstores | 76.10 | 53.09 | 30.2% | 74.08 | 53.24 | 28.1% | ||||||
Online pharmacy | 22.48 | 20.15 | 10.4% | 13.54 | 12.11 | 10.6% | ||||||
Wholesale | 34.55 | 30.65 | 11.3% | 29.71 | 26.45 | 11.0% | ||||||
Total | 133.13 | 103.89 | 22.0% | 117.33 | 91.80 | 21.8% | ||||||
Revenue from the retail drugstores business increased by $2.02 million, or 2.7%, to $76.10 million for the fiscal year ended March 31, 2021 from $74.08 million for the prior fiscal year. However, after removing the impact of exchange rate fluctuation, the actual retail drugstores sales decreased by 1.5%. The actual decrease in retail drugstore sales was primarily due to the negative effect on the overall economy from COVID-19 and the Company's strategic decision to cease selling certain low-profit margin products that are eligible for reimbursement by National Healthcare Security Administration since September 1, 2020.
Revenue from the online pharmacy business increased by $8.94 million, or 66.1%, to $22.48 million for the fiscal year ended March 31, 2021 from $13.54 million for the prior fiscal year. The increase was primarily caused by an increase in the sales of prescription drugs via e-commerce platforms such as Tmall. In the past, prescription drugs cannot be sold online due to safety concern. After the nation lifted the ban order, online prescription drug sales became popular. As a result, the sale of prescription drugs was $8.24 million in the year ended March 31, 2021 as compared to $1.45 million in the year ended March 31, 2020. Additionally, the Company maintained a membership care program targeted at customers with chronic disease. The Company has closely interacted with its members via WeChat to provide healthcare knowledge, and to remind them 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 $4.84 million, or 16.3%, to $34.55 million for the fiscal year ended March 31, 2021 from $29.71 million for the prior fiscal year. The increase was primarily accomplished by Company's ability to sell certain products, which were 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 $12.09 million, or 13.2%, to $103.89 million for the fiscal year ended March 31, 2021 from $91.80 million for the prior fiscal year. Gross profit increased by $3.71 million, or 14.6%, to $29.24 million for fiscal year ended March 31, 2021 from $25.53 million for the prior fiscal year. Overall gross margin increased slightly by 0.2 percentage points to 22.0% for the fiscal year ended March 31, 2021, from 21.8% for the prior fiscal year.
Gross margins for retail drugstores, online pharmacy and wholesale were 30.2%, 10.4%, and 11.3%, respectively, for the fiscal year ended March 31, 2021, compared to gross margins for retail drugstores, online pharmacy and wholesale of 28.1%, 10.6%, and 11.0%, respectively, for the prior fiscal year.
Loss from operations
Selling and marketing expenses increased by $3.16 million, or 13.3%, to $26.95 million for the fiscal year ended March 31, 2021 from $23.79 million for the prior fiscal year. The increase in selling and marketing expenses was primarily due to increase in employee's salary and rent for office leases.
General and administrative expenses increased by 2.79 million, or 34.4%, to $10.90 million for the fiscal year ended March 31, 2021 from $8.11 million for the prior fiscal year. The increase in general and administrative expenses was primarily due to the increase in stock-based compensation, offset by the decrease in bad debt expense. In December 2020, the Company issued a total of 3,790,000 shares of common stock and recorded stock-based compensation of approximately $3.9 million. In the year ended March 31, 2021, the Company recorded the reduction in the allowance for bad debts of $1.0 million as compared to increase in bad debt expense in of $0.1 million in fiscal year 2020.
The Company recorded an impairment of long-lived assets of $0.23 million and $0.63 million for the year ended March 31, 2021 and 2020, respectively. In the year ended March 31, 2021, the Company evaluated the forest land use rights and recorded an impairment of $0.23 million. In the year ended March 31, 2020, the Company evaluated the licenses of insurance applicable drugstores acquired in the past based on their discounted positive cash value.
Loss from operations was $8.84 million for the fiscal year ended March 31, 2021, compared to loss from operations of $7.00 million for the prior fiscal year. Operating margin was (6.6) % and (6.0)% for the fiscal year ended March 31, 2021 and 2020, respectively.
Net loss
Net loss was $8.38 million, or $0.20 per basic and diluted share for the fiscal year ended March 31, 2021, compared to net loss of $6.46 million, or $0.18 per basic and diluted share for the prior fiscal year.
Financial Condition
As of March 31, 2021, the Company had cash of $22.05 million, compared to $16.18 million as of March 31, 2020. Net cash used in operating activities was $0.06 million for the fiscal year ended March 31, 2021, compared to $6.91 million for the prior fiscal year. Net cash used in investing activities was $2.00 million for the fiscal year ended March 31, 2021, compared to $4.84 million for the prior fiscal year. Net cash provided by financing activities was $3.08 million for the fiscal year ended March 31, 2021, compared to $19.01 million for the prior fiscal 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 | ||||||||
CONSOLIDATED BALANCE SHEETS | ||||||||
March 31, | March 31, | |||||||
2021 | 2020 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 22,045,628 | $ | 16,176,318 | ||||
Restricted cash | 12,627,016 | 14,806,288 | ||||||
Financial assets available for sale | 91,472 | 157,159 | ||||||
Notes receivable | 39,392 | 57,005 | ||||||
Trade accounts receivable | 13,423,728 | 9,770,656 | ||||||
Inventories | 16,972,965 | 12,247,004 | ||||||
Other receivables, net | 5,051,960 | 5,069,442 | ||||||
Advances to suppliers | 421,963 | 1,174,800 | ||||||
Other current assets | 1,560,119 | 1,528,540 | ||||||
Total current assets | 72,234,243 | 60,987,212 | ||||||
PROPERTY AND EQUIPMENT, net | 6,549,035 | 7,633,740 | ||||||
OTHER ASSETS | ||||||||
Long-term investment | 3,981,986 | 2,544,451 | ||||||
Farmland assets | 835,427 | 742,347 | ||||||
Long term deposits | 1,546,764 | 1,456,384 | ||||||
Other noncurrent assets | 856,391 | 1,046,763 | ||||||
Operating lease right-of-use assets | 16,778,729 | 21,711,376 | ||||||
Intangible assets, net | 3,528,056 | 3,393,960 | ||||||
Total other assets | 27,527,353 | 30,895,281 | ||||||
Total assets | $ | 106,310,631 | $ | 99,516,233 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
CURRENT LIABILITIES | ||||||||
Short-term bank loan | 762,270 | 1,410,130 | ||||||
Accounts payable, trade | 29,895,830 | 21,559,494 | ||||||
Notes payable | 25,663,633 | 26,605,971 | ||||||
Other payables | 2,940,000 | 2,522,330 | ||||||
Other payables - related parties | 445,305 | 490,218 | ||||||
Customer deposits | 1,146,247 | 708,140 | ||||||
Taxes payable | 197,733 | 119,247 | ||||||
Accrued liabilities | 501,111 | 753,612 | ||||||
Long-term loan payable-current portion | 2,557,634 | 2,287,742 | ||||||
Current portion of operating lease liabilities | 788,171 | 981,090 | ||||||
Total current liabilities | 64,897,934 | 57,437,974 | ||||||
Long-term loan payable | 1,892,269 | 4,115,958 | ||||||
Long term operating lease liabilities | 15,118,083 | 19,049,575 | ||||||
Employee Deposits | - | 70,507 | ||||||
Purchase option and warrants liability | - | 64,090 | ||||||
Total liabilities | 81,908,286 | 80,738,104 | ||||||
COMMITMENTS AND CONTINGENCIES | ||||||||
STOCKHOLDERS' EQUITY | ||||||||
Common stock; $0.001 par value; 250,000,000 shares authorized; 41,751,790 and | 41,752 | 32,937 | ||||||
Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and | - | - | ||||||
Additional paid-in capital | 66,516,033 | 54,209,301 | ||||||
Statutory reserves | 1,309,109 | 1,309,109 | ||||||
Accumulated deficit | (44,942,374) | (36,400,837) | ||||||
Accumulated other comprehensive income | 2,818,185 | 1,440,424 | ||||||
Total stockholders' equity | 25,742,705 | 20,590,934 | ||||||
Noncontrolling interests | (1,340,360) | (1,812,805) | ||||||
Total equity | 24,402,345 | 18,778,129 | ||||||
Total liabilities and stockholders' equity | $ | 106,310,631 | $ | 99,516,233 | ||||
CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS | ||||||||
For the years ended | ||||||||
2021 | 2020 | |||||||
REVENUES, NET | $ | 133,134,633 | $ | 117,327,689 | ||||
COST OF GOODS SOLD | 103,890,824 | 91,801,259 | ||||||
GROSS PROFIT | 29,243,809 | 25,526,430 | ||||||
SELLING EXPENSES | 26,954,914 | 23,793,603 | ||||||
GENERAL AND ADMINISTRATIVE EXPENSES | 10,897,629 | 8,108,377 | ||||||
IMPAIRMENT OF LONG-LIVED ASSETS | 228,506 | 628,192 | ||||||
TOTAL OPERATING EXPENSES | 38,081,049 | 32,530,172 | ||||||
LOSS FROM OPERATIONS | (8,837,240) | (7,003,742) | ||||||
OTHER EXPENSE: | ||||||||
INTEREST INCOME | 707,878 | 1,063,747 | ||||||
INTEREST EXPENSE | (455,187) | (698,518) | ||||||
OTHER | 176,519 | (204,064) | ||||||
CHANGE IN FAIR VALUE OF PURCHASE OPTION AND WARRANTS | 64,090 | 401,158 | ||||||
LOSS BEFORE INCOME TAXES | (8,343,940) | (6,441,419) | ||||||
PROVISION FOR INCOME TAXES | 31,638 | 16,258 | ||||||
NET LOSS | (8,375,578) | (6,457,677) | ||||||
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST | (255,716) | (644,308) | ||||||
NET LOSS ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC. | (8,119,862) | (5,813,369) | ||||||
OTHER COMPREHENSIVE LOSS | ||||||||
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS | 1,377,761 | (1,068,540) | ||||||
COMPREHENSIVE LOSS | (6,997,817) | (7,526,217) | ||||||
WEIGHTED AVERAGE NUMBER OF SHARES: | ||||||||
Basic | 40,780,762 | 32,816,567 | ||||||
Diluted | 40,780,762 | 32,816,567 | ||||||
LOSS PER SHARES: | ||||||||
Basic | $ | (0.20) | $ | (0.18) | ||||
Diluted | $ | (0.20) | $ | (0.18) | ||||
CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES | ||||||||
CONSOLIDATED STATEMENTS OF CASH FLOWS | ||||||||
For the years ended | ||||||||
2021 | 2020 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Net income | $ | (8,375,578) | $ | (6,457,677) | ||||
Adjustments to reconcile net income to net cash used in operating activities: | ||||||||
Bad debt direct write-off and provision | (706,862) | 446,354 | ||||||
Depreciation and amortization | 1,750,890 | 2,082,817 | ||||||
Impairment of long lived assets | 228,506 | 628,192 | ||||||
Stock based compensation | 3,941,600 | 34,560 | ||||||
Change in fair value of purchase option derivative liability | (64,090) | (401,158) | ||||||
Change in operating assets: | ||||||||
Accounts receivable, trade | (3,307,946) | (1,567,774) | ||||||
Notes receivable | 21,539 | 112,803 | ||||||
Inventories and biological assets | (3,615,017) | 979,935 | ||||||
Other receivables | 468,967 | (1,010,722) | ||||||
Advances to suppliers | 1,893,857 | 148,638 | ||||||
Long term deposit | 26,910 | 596,209 | ||||||
Other current assets | 1,004,448 | (1,278,833) | ||||||
Other noncurrent assets | 38,142 | 87,065 | ||||||
Change in operating liabilities: | ||||||||
Accounts payable, trade | 6,380,115 | (317,755) | ||||||
Other payables and accrued liabilities | (183,111) | (967,751) | ||||||
Customer deposits | 368,690 | (22,963) | ||||||
Taxes payable | 66,648 | 115 | ||||||
Net cash used in operating activities | (62,292) | (6,907,945) | ||||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Disposal of financial assets available for sale | 75,973 | 14,356 | ||||||
Acquisition of equipment and building | (126,766) | (656,297) | ||||||
Investment in a joint venture | (1,470,119) | (2,567,083) | ||||||
Purchases of intangible assets | (97,802) | (871,145) | ||||||
Additions to leasehold improvements | (379,611) | (756,444) | ||||||
Net cash used in investing activities | (1,998,325) | (4,836,613) | ||||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Proceeds from short-term bank loan | 738,315 | 1,435,620 | ||||||
Repayment of short-term bank loan | (1,476,630) | - | ||||||
Proceeds from third parties loan | - | 7,178,100 | ||||||
Repayment of third parties loan | (2,395,629) | (658,645) | ||||||
Proceeds from notes payable | 48,292,231 | 48,974,772 | ||||||
Repayment of notes payable | (51,295,776) | (46,896,917) | ||||||
Increase in financial liability | (73,832) | (7,178) | ||||||
Exercise of warrants | 77,500 | - | ||||||
Proceeds from sale of stock and warrants | 9,287,100 | 9,273,077 | ||||||
Repayment of other payables-related parties | (73,426) | (285,123) | ||||||
Net cash provided by financing activities | 3,079,853 | 19,013,706 | ||||||
EFFECT OF EXCHANGE RATE ON CASH | 2,670,802 | (1,031,744) | ||||||
INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH | 3,690,038 | 6,237,404 | ||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, beginning of year | 30,982,606 | 24,745,202 | ||||||
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, end of year | $ | 34,672,644 | $ | 30,982,606 | ||||
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
Cash paid for income taxes | $ | 37,738 | $ | 17,198 | ||||
Cash paid for interest | 455,187 | 108,098 | ||||||
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SOURCE China Jo-Jo Drugstores, Inc.