China Jo-Jo Drugstores Announces First Quarter Financial Results for Fiscal Year 2016

Aug 12, 2015, 09:15 ET from China Jo-Jo Drugstores, Inc.

HANGZHOU, China, Aug. 12, 2015 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (NASDAQ CM: CJJD) (the "Company" or "China Jo-Jo"), a leading China-based retail and wholesale distributor of pharmaceutical and health care products through its own online and retail pharmacies, today announced financial results for the first quarter ended June 30, 2015.

FY 2016 First Quarter Highlights:

  • Total Revenue increased 29.5% to $21.3 million for the first quarter ended June 30, 2015 as compared to $16.5 million during the same period last year
  • Online pharmacy sales increased 131.9% for the first quarter ended June 30, 2015, to a record revenue of $6.0 million, which accounted for approximately 28.0% of the company's overall sales
  • Retail drugstore sales increased by $1.6 million or 14.9%, for the first quarter ended June 30, 2015, as compared to the same period last year
  • Gross profit increased to $4.4 million as compared to $2.5 million for the same quarter last year
  • Net income increased by $458,048 to $110,611 during the three months ended June 30, 2015, improving from a net loss of $347,437 in the same period last year

Revenue increase during the first quarter ended June 30, 2015 was mainly due to the expansion of the Company's retail drugstores and online pharmacy business. Retail drugstores sales, which accounted for approximately 57.0% of total revenue, increased by $1,575,129, of which an 8.2% increase in same-store sales contributed $827,593 while new stores sales contributed approximately $617,453.

Online pharmacy sales reached $5,965,768, an increase of 131.9% over the same period last year, as we have been actively exploring new ways to grow our online sales. We have expanded cooperation with business-to-consumer online vendors, including Alibaba Group's Taobao affiliate, JD.com and Amazon, by posting our products on their online platforms. In addition to launching an online payment service ("Alipay Service") based on a service agreement with Alipay (China) Internet Technology Ltd. ("Alipay"), we launched stores on Tencent's WeChat platform, China's dominant mobile messaging app and social network with over 500 million active users.

Starting from January 2015, we have strengthened our cooperation with certain large insurance companies in China such as the People's Insurance Company (Group) Of China Limited, to sell online products to their customers who have purchased health insurance through them. In May 2015, we have set up a joint venture, with a leading Pharmacy Benefit Management ("PBM") provider in China, which owns and operates Yikatong (the "E-Pharmacy-Card"), a popular pharmacy and health insurance benefit program with over 180,000 current users. The joint venture agreement requires the PBM provider to direct the majority of its online E-Pharmacy-Card transactions to our official online pharmacy site. In June 2015, we have organized an operation team to direct the sales from commercial insurance to our own website. We expect that this cooperation will boost our online sales and profit margin in the future.

Mr. Lei Liu, Chairman and CEO of the Company stated, "We are excited to see a steady growth on our online and retail sales from last year. Revenue of our online pharmacy, www.dada360.com, is about five times the revenue of the same period last year thanks to our strategic partnership with China's leading Pharmacy Benefit Management (PBM) provider and insurance companies. We are dedicated to further expand our efforts on our online pharmacy, which proves to be a popular business area supported by National Internet Plus Strategy in China. We will continue to devote resources to grow our online pharmacy business with the goal of becoming a national leader in pharmaceutical e-commerce business. Our retail pharmacies have also maintained robust growth both in sales and profitability. The management will strive to capitalize on the growth of health insurance and online sales in China."

 

CHINA JO-JO DRUGSTORES, INC AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(UNAUDITED)



June 30,



March 31,




2015



2015


ASSETS







CURRENT ASSETS







Cash


$

1,654,762



$

4,023,581


Financial assets available for sale



1,309,600




1,307,200


Restricted cash



13,859,448




8,992,101


Notes receivable



64,717




138,952


Trade accounts receivable, net



7,734,138




9,237,743


Inventories



11,771,178




10,538,591


Other receivables, net



1,370,057




1,130,264


Advances to suppliers, net



5,842,359




4,717,352


Other current assets



1,803,454




2,200,838


Total current assets



45,409,713




42,286,622











PROPERTY AND EQUIPMENT, net



6,757,528




7,056,781











OTHER ASSETS









Long-term investment



114,590




-


Farmland assets



1,788,469




1,704,359


Long term deposits



2,588,769




2,584,025


Other noncurrent assets



2,739,819




2,734,798


Intangible assets, net



3,139,369




3,142,003


Total other assets



10,371,016




10,165,185











Total assets


$

62,538,257



$

59,508,588











LIABILITIES AND STOCK HOLDERS' EQUITY








CURRENT LIABILITIES









Short-term loan payable


$

32,740



$

32,680


Accounts payable, trade



14,426,600




15,915,915


Notes payable



19,498,143




15,752,969


Other payables



2,452,791




2,931,869


Other payables - related parties



2,863,510




2,729,740


Customer deposits



4,264,788




3,759,050


Taxes payable



484,195




328,111


Accrued liabilities



642,056




509,537


Total current liabilities



44,664,823




41,959,871











Purchase option and warrant liability



358,164




315,327


Total liabilities



45,022,987




42,275,198











COMMITMENTS AND CONTINGENCIES


















STOCKHOLDERS' EQUITY









Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and
  outstanding as of June 30, 2015 and  March 31, 2015



-




-


Common stock; $0.001 par value; 250,000,000 shares authorized; 15,650,504 and
  15,650,504 shares issued and outstanding as of  June 30, 2015 and March 31, 2015



15,651




15,651


Additional paid-in capital



19,425,267




19,301,233


Statutory reserves



1,309,109




1,309,109


Accumulated deficit



(7,293,600)




(7,404,210)


Accumulated other comprehensive income



4,058,843




3,972,543


Total stockholders' equity



17,515,270




17,194,326











Noncontrolling interests



-




39,064


Total equity



17,515,270




17,233,390











Total liabilities and stockholders' equity


$

62,538,257



$

59,508,588


 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)



For the three months
ended
June 30,




2015



2014


REVENUES, NET


$

21,311,292



$

16,459,232











COST OF GOODS SOLD



16,935,609




13,948,613











GROSS PROFIT



4,375,683




2,510,619











SELLING EXPENSES



3,096,369




1,768,577


GENERAL AND ADMINISTRATIVE EXPENSES



920,230




1,081,201


TOTAL OPERATING EXPENSES



4,016,599




2,849,778











INCOME(LOSS) FROM OPERATIONS



359,084




(339,159)











OTHER LOSS, NET



(123,449)




(115,836)


CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITIES



(42,837)




123,699











INCOME (LOSS) BEFORE INCOME TAXES



192,798




(331,296)











PROVISION FOR INCOME TAXES



82,187




16,141











NET INCOME (LOSS)



110,611




(347,437)











ADD: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST



-




700











NET INCOME(LOSS) ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC.



110,611




(346,737)











OTHER COMPREHENSIVE INCOME









Foreign currency translation adjustments



86,300




52,268











COMPREHENSIVE INCOME (LOSS)


$

196,911



$

(294,469)











WEIGHTED AVERAGE NUMBER OF SHARES:









Basic



15,650,504




14,416,023


Diluted



15,975,583




14,416,023











EARNINGS (LOSSES) PER SHARES:









Basic


$

0.01



$

(0.02)


Diluted


$

0.01



$

(0.02)


 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)



Three months ended
June 30,




2015



2014


CASH FLOWS FROM OPERATING ACTIVITIES:







Net income (loss)


$

110,611



$

(347,437)


Adjustments to reconcile net income (loss) to net cash (used in) operating activities:









Depreciation and amortization



419,806




502,101


Stock compensation



124,033




71,544


Bad debt direct write-off and provision



(676,858)




(637,819)


Inventory reserve



-




4,316


Change in fair value of purchase option derivative liability



42,837




(123,699)


Change in operating assets:









Accounts receivable, trade



1,867,046




1,187,128


Notes receivable



74,535




-


Inventories



(1,295,009)




(171,784)


Other receivables



(2,715)




(59,183)


Advances to suppliers



(1,040,870)




1,694,269


Other current assets



421,682




(61,633)


Long term deposit



-




25,040


Other noncurrent assets



-




93,294


Change in operating liabilities:









Accounts payable, trade



(1,519,464)




(4,347,548)


Other payables and accrued liabilities



(352,973)




155,208


Customer deposits



499,141




195,894


Taxes payable



155,577




(24,361)


Net cash used in operating activities



(1,172,621)




(1,844,670)











CASH FLOWS FROM INVESTING ACTIVITIES:









Purchase of equipment



(99,393)




(104,682)


Investment to a joint venture



(114,660)




-


Net cash (used in) investing activities



(214,053)




(104,682)











CASH FLOWS FROM FINANCING ACTIVITIES:









Repayment of short-term bank loan



-




(162,250)


Repayment of  third parties loan



-




(59,500)


Change in restricted cash



(4,853,800)




(587,371)


Proceeds from notes payable



13,793,434




1,918,599


Repayments of notes payable



(10,074,912)




(685,791)


Proceeds from other payables-related parties



131,872




423,752


Net cash (used in) provided by financing activities



(1,003,406)




847,439











EFFECT OF EXCHANGE RATE ON CASH



21,261




35,553











DECREASE IN CASH



(2,368,819)




(1,066,360)











CASH, beginning of period



4,023,581




4,445,276











CASH, end of period


$

1,654,762



$

3,378,916











SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:









Cash paid for income taxes


$

25,969



$

21,325


Cash paid for interest


$

159,931



$

1,460


 

About China Jo-Jo Drugstores, Inc.

China Jo-Jo Drugstores, Inc., through its own retail drugstores, wholesale distributor and online pharmacy, is a leading retailer and wholesale distributor of pharmaceutical and healthcare products in China. As of June 30, 2015, the Company had 59 retail pharmacies in Zhejiang Province, China. The Company's wholesale subsidiary not only supplies its retail stores, but also distributes drug and other healthcare products to other drugstores and drug vendors. The Company routinely posts important information on its corporate websites at www.jiuzhou-drugstore.com (Chinese) and www.chinajojodrugstores.com (English).

Forward Looking Statement

Statements in this press release regarding the Company that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking statements, including, but not limited to, financial guidance, are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "estimate," "may," "will," "should," "project," "plan," "seek," "intend," "anticipate," the negatives thereof, or comparable terminology. Such statements typically involve risks and uncertainties and may include financial projections or information regarding the progress of new product development. It is routine for the Company's internal projections and expectations to change as the quarter and year progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which the Company bases its expectations may change. Although these expectations may change, the Company is under no obligation to inform you if they do. Actual results could differ materially from the expectations reflected in such forward-looking statements as a result of numerous factors, including the risks associated with the effect of changing economic conditions in the People's Republic of China, variations in cash flow, reliance on collaborative retail partners and on new product development, variations in new product development, risks associated with rapid technological change, and the potential of introduced or undetected flaws and defects in products. Readers are referred to the reports and documents filed from time to time by the Company with the Securities and Exchange Commission for a discussion of these and other important risk factors that could cause actual results to differ from those discussed in forward-looking statements. Other than as required under the securities laws, the Company does not assume a duty to update these forward-looking statements.

SOURCE China Jo-Jo Drugstores, Inc.



RELATED LINKS

http://www.dada360.com


http://www.chinajojodrugstores.com