China Jo-Jo Drugstores Announces Fiscal Year 2015 Second Quarter Financial Results
HANGZHOU, China, Nov. 13, 2014 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (NASDAQ CM: CJJD) (the "Company"), a leading China-based retail and wholesale distributor of pharmaceutical and healthcare products through its own retail and online pharmacies, today announced earnings results for the quarter ended September 30, 2014, the second quarter of the fiscal year 2015.
FY 2015 Second Quarter Highlights:
- Retail pharmacy sales increased by $3.0 million, or 31.3%, to $12.4 million from the comparable quarter of the prior year, largely due to a 28.79% increase in same-store sales;
- Online pharmacy revenue surged by 84.2% to nearly $3.0 million, as compared to $1.6 million in the same quarter last year;
- Wholesale revenue, which accounted for approximately 16.7% of total revenue, decreased to $3.1 million from $5.8 million for the comparable quarter of the prior year;
- Net loss attributable to the Company narrowed to $36,193 from $546,062 for the comparable quarter of the prior year;
- As of September 30, 2014, the Company had cash and restricted cash balance of approximately $12.8 million, $49.5 million in total assets and $34.4 million in total liabilities.
"Our online pharmacy sales continued to grow dramatically during the most recent quarter largely thanks to our efforts in expanding collaboration with various large Chinese e-commerce platforms such as Tmall.com under Alibaba group and JD.com," stated Mr. Lei Liu, the Chairman and CEO of the Company. "Looking ahead to next year, other than OTC drugs, nutritional supplement and medical equipment, Chinese government may begin to allow online sale of prescription drugs. Furthermore, local government is planning to apply government medical insurance to online purchases. In preparation for these coming explosive market opportunities, we plan to further strengthen our workforce so as to expand our online operation."
"We are also very happy to report that our retail drugstore revenue grew more than 31% primarily due to a 28.79% increase in our same-store sales during this quarter. Since early this year, the management has been focusing more on developing homegrown market in Zhejiang province as part of our turnaround strategy. We hope that, with the robust online sales growth and continuous revenue growth in our retail drugstores, fiscal year 2015 will be a turnaround year for China Jo-Jo Drugstores."
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 September 30, 2014, the Company had 51 retail pharmacies in Hangzhou. 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," "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.
See Accompanying Tables
| CHINA JO-JO DRUGSTORES, INC AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED) |
||||||||
| September 30, |
March 31, |
|||||||
| 2014 |
2014 |
|||||||
| ASSETS |
||||||||
| CURRENT ASSETS |
||||||||
| Cash |
$ |
7,352,723 |
$ |
4,445,276 |
||||
| Restricted cash |
5,485,545 |
3,114,543 |
||||||
| Notes receivable |
65,000 |
- |
||||||
| Trade accounts receivable, net |
6,733,217 |
6,734,536 |
||||||
| Inventories |
8,421,989 |
7,047,397 |
||||||
| Other receivables, net |
792,852 |
149,546 |
||||||
| Advances to suppliers, net |
2,082,163 |
4,577,194 |
||||||
| Other current assets |
1,472,693 |
1,663,102 |
||||||
| Total current assets |
32,406,182 |
27,731,594 |
||||||
| PROPERTY AND EQUIPMENT, net |
8,828,548 |
9,412,688 |
||||||
| OTHER ASSETS |
||||||||
| Farmland assets |
1,373,425 |
1,371,735 |
||||||
| Long term deposits |
2,452,191 |
2,786,437 |
||||||
| Other noncurrent assets |
2,853,797 |
3,036,930 |
||||||
| Intangible assets, net |
1,555,478 |
1,569,443 |
||||||
| Total other assets |
8,234,891 |
8,764,545 |
||||||
| Total assets |
$ |
49,469,621 |
$ |
45,908,827 |
||||
| LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
| CURRENT LIABILITIES |
||||||||
| Short-term loan payable |
$ |
32,500 |
$ |
162,300 |
||||
| Accounts payable, trade |
14,014,983 |
14,554,726 |
||||||
| Notes payable |
11,205,188 |
7,820,718 |
||||||
| Other payables |
2,056,070 |
1,282,211 |
||||||
| Other payables - related parties |
1,906,973 |
2,384,294 |
||||||
| Loan from third parties |
234,812 |
294,042 |
||||||
| Customer deposits |
3,599,840 |
3,185,885 |
||||||
| Taxes payable |
417,768 |
373,501 |
||||||
| Accrued liabilities |
689,973 |
1,208,242 |
||||||
| Total current liabilities |
34,158,107 |
31,265,919 |
||||||
| Purchase option and warrant liability |
202,559 |
278,916 |
||||||
| Total liabilities |
34,360,666 |
31,544,835 |
||||||
| COMMITMENTS AND CONTINGENCIES |
||||||||
| STOCKHOLDERS' EQUITY |
||||||||
| Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and |
- |
- |
||||||
| Common stock; $0.001 par value; 250,000,000 shares authorized; 15,035,504 |
15,036 |
14,416 |
||||||
| Additional paid-in capital |
18,427,053 |
17,355,555 |
||||||
| Statutory reserves |
1,309,109 |
1,309,109 |
||||||
| Accumulated deficit |
(8,643,697) |
(8,260,767) |
||||||
| Accumulated other comprehensive income |
3,963,596 |
3,905,136 |
||||||
| Total stockholders' equity |
15,071,097 |
14,323,449 |
||||||
| Noncontrolling interests |
37,858 |
40,543 |
||||||
| Total equity |
15,108,955 |
14,363,992 |
||||||
| Total liabilities and stockholders' equity |
$ |
49,469,621 |
$ |
45,908,827 |
||||
|
CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS (UNAUDITED)
|
||||||||||||||||
| For the three months ended |
For the six months ended |
|||||||||||||||
| 2014 |
2013 |
2014 |
2013 |
|||||||||||||
| REVENUES, NET |
$ |
18,444,065 |
$ |
16,855,421 |
$ |
34,903,297 |
$ |
32,191,940 |
||||||||
| COST OF GOODS SOLD |
15,678,808 |
13,907,018 |
29,627,421 |
25,642,368 |
||||||||||||
| GROSS PROFIT |
2,765,257 |
2,948,403 |
5,275,876 |
6,549,572 |
||||||||||||
| SELLING EXPENSES |
1,933,780 |
2,979,131 |
3,702,357 |
4,659,973 |
||||||||||||
| GENERAL AND ADMINISTRATIVE EXPENSES |
746,175 |
491,981 |
1,827,376 |
3,132,799 |
||||||||||||
| TOTAL OPERATING EXPENSES |
2,679,955 |
3,471,112 |
5,529,733 |
7,792,772 |
||||||||||||
| INCOME (LOSS) FROM OPERATIONS |
85,302 |
(522,709) |
(253,857) |
(1,243,200) |
||||||||||||
| OTHER (LOSS) INCOME, NET |
(52,692) |
37,021 |
(168,528) |
(3,392) |
||||||||||||
| CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITIES |
(47,342) |
(21,049) |
76,357 |
(8,384) |
||||||||||||
| LOSS BEFORE INCOME TAXES |
(14,732) |
(506,737) |
(346,028) |
(1,254,976) |
||||||||||||
| PROVISION FOR INCOME TAXES |
22,680 |
39,589 |
38,821 |
79,109 |
||||||||||||
| NET LOSS |
(37,412) |
(546,326) |
(384,849) |
(1,334,085) |
||||||||||||
| ADD: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST |
1,219 |
264 |
1,919 |
507 |
||||||||||||
| NET LOSS ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC. |
(36,193) |
(546,062) |
(382,930) |
(1,333,578) |
||||||||||||
| OTHER COMPREHENSIVE INCOME |
||||||||||||||||
| Foreign currency translation adjustments |
6,192 |
259,814 |
58,460 |
1,019,605 |
||||||||||||
| COMPREHENSIVE INCOME (LOSS) |
$ |
(30,001) |
$ |
(286,248) |
$ |
(324,470) |
$ |
(313,973) |
||||||||
| WEIGHTED AVERAGE NUMBER OF SHARES: |
||||||||||||||||
| Basic |
14,981,637 |
13,609,003 |
14,700,375 |
13,609,003 |
||||||||||||
| Diluted |
14,981,637 |
13,609,003 |
14,700,375 |
13,609,003 |
||||||||||||
| LOSS PER SHARES: |
||||||||||||||||
| Basic |
$ |
(0.00) |
$ |
(0.04) |
$ |
(0.03) |
$ |
(0.10) |
||||||||
| Diluted |
$ |
(0.00) |
$ |
(0.04) |
$ |
(0.03) |
$ |
(0.10) |
||||||||
|
CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
|
||||||||
| Six months ended |
||||||||
| 2014 |
2013 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net loss |
$ |
(384,849) |
$ |
(1,334,085) |
||||
| Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: |
||||||||
| Depreciation and amortization |
832,570 |
1,140,586 |
||||||
| Stock-based compensation |
129,692 |
58,801 |
||||||
| Bad debt provision |
(1,611,497) |
(747,930) |
||||||
| Inventory reserve |
136,575 |
- |
||||||
| Change in fair value of purchase option derivative liability |
(76,357) |
8,384 |
||||||
| Change in operating assets: |
||||||||
| Accounts receivable, trade |
694,722 |
972,975 |
||||||
| Notes receivable |
(64,932) |
- |
||||||
| Inventories |
(1,501,054) |
(3,361,143) |
||||||
| Other receivables |
(425,699) |
(262,493) |
||||||
| Advances to suppliers |
3,207,686 |
5,117,601 |
||||||
| Other current assets |
192,254 |
(849,209) |
||||||
| Long term deposit |
337,326 |
- |
||||||
| Other noncurrent assets |
186,680 |
92,785 |
||||||
| Change in operating liabilities: |
||||||||
| Accounts payable, trade |
(557,095) |
5,323,371 |
||||||
| Other payables and accrued liabilities |
252,409 |
(654,911) |
||||||
| Customer deposits |
409,600 |
(2,925,130) |
||||||
| Taxes payable |
43,762 |
(45) |
||||||
| Net cash provided by operating activities |
1,801,793 |
2,579,557 |
||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
| Purchase of equipment |
(246,097) |
(54,413) |
||||||
| Increase in long-term deposits for land use right |
- |
(1,351,030) |
||||||
| Additions to leasehold improvements |
(12,485) |
(26,619) |
||||||
| Payments on construction-in-progress |
- |
(111,524) |
||||||
| Net cash used in investing activities |
(258,582) |
(1,543,586) |
||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: |
||||||||
| Proceeds from short-term bank loan |
32,466 |
161,770 |
||||||
| Repayment of short-term bank loan |
(162,330) |
- |
||||||
| Repayment of third parties loan |
(59,529) |
- |
||||||
| Change in restricted cash |
(2,364,687) |
245,504 |
||||||
| Repayments of notes payable |
(7,822,163) |
(795,002) |
||||||
| Proceeds from notes payable |
11,193,465 |
- |
||||||
| Proceeds from other payables-related parties |
463,848 |
879,958 |
||||||
| Net cash provided by financing activities |
1,281,070 |
492,230 |
||||||
| EFFECT OF EXCHANGE RATE ON CASH |
83,166 |
244,420 |
||||||
| INCREASE IN CASH |
2,907,447 |
1,772,621 |
||||||
| CASH, beginning of period |
4,445,276 |
4,524,094 |
||||||
| CASH, end of period |
$ |
7,352,723 |
$ |
6,296,715 |
||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: |
||||||||
| Cash paid for interest |
$ |
1,458 |
$ |
- |
||||
| Cash paid for income taxes |
$ |
43,788 |
$ |
12,797 |
||||
| Issuance of common stocks in exchange of debts |
$ |
941,613 |
$ |
- |
||||
| Reclassification of leasehold improvement to equipment |
$ |
37,011 |
$ |
- |
||||
SOURCE China Jo-Jo Drugstores
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