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      China Jo-Jo Drugstores Reports Fiscal Year 2024 Financial Results


      News provided by

      China Jo-Jo Drugstores, Inc.

      Jul 30, 2024, 09:00 ET

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      HANGZHOU, China, July 30, 2024 /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, 2024.

      Mr. Lei Liu, Chairman and CEO of Jo-Jo Drugstores, commented, "We are pleased to present our financial performance for fiscal year 2024, which reflects our commitment to maintaining a resilient business model in a dynamic market. We achieved a significant 42.1% revenue growth in our wholesale business, a result of our dedicated efforts in targeting wholesale buyers with competitively priced product offerings, and leveraging modern wholesale platforms to boost sales. We believe this strategy will benefit us for long-term and sustainable growth. Our dedication to high-quality services and products remains strong. By adopting agile product and pricing strategies, we have successfully navigated a competitive landscape in China's healthcare market. Looking ahead, we will keep strengthening our competitive advantages to differentiate our business and deliver outstanding results. We plan to actively seek as great growth potential opportunities as possible to strengthen our business, improve our customer experience, and expand our product portfolio to meet evolving customer needs. We will also continue to seize opportunities to facilitate market expansion and remain focused on gaining efficiencies and controlling costs to achieve the accelerated growth. We are deeply committed to contributing to China's healthcare market and communities we support, and we will continue to create greater value for our shareholders, ensuring that our contributions benefit all our shareholders."

      Fiscal Year 2024 Financial Highlights






      For the Year Ended March 31,

      ($ millions, except per share data)


      2024


      2023


      % Change  

      Revenue


      154.54


      148.81


      3.8 %

            Retail drugstores


      75.68


      83.35


      (9.2) %

            Online pharmacy


      31.86


      32.38


      (1.6) %

            Wholesale


      47.00


      33.08


      42.1 %

      Gross profit


      31.11


      34.28


      (9.3) %

      Gross margin


      20.1 %


      23.0 %


      (2.9)pp

      Loss from operations


      (3.53)


      (20.93)


      83.1 %

      Net loss


      (4.23)


      (21.14)


      80.0 %

      Loss per share


      (2.93)


      (41.46)


      92.9 %








      *Notes: pp represents percentage points

      • Revenue increased by 3.8% to $154.54 million for the fiscal year ended March 31, 2024, from $148.81 million for the same period of last year.
      • Gross profit was $31.11 million for the fiscal year ended March 31, 2024, compared to $34.28 million for the same period of last year.
      • Gross margin was 20.1% for the fiscal year ended March 31, 2024, compared to 23.0% for the same period of last year.
      • Net loss was $4.23 million, or $2.93 per basic and diluted share, for the fiscal year ended March 31, 2024, compared to net loss of $21.14 million, or $41.46 per basic and diluted share, for the same period of last year.

      Fiscal Year 2024 Financial Results

      Revenue

      Revenue increased by $5.73 million, or 3.8%, to $154.54 million for the fiscal year ended March 31, 2024, from $148.81 million for the same period of last year.



      For the Year Ended March 31,



      2024


      2023

      ($ millions)


      Revenue


      Cost of
      Goods


      Average  
      Gross
      Margin


      Revenue


      Cost of
      Goods


      Average 
      Gross
      Margin

      Retail drugstores


      75.68


      53.06


      29.9 %


      83.35


      56.55


      32.2 %

      Online pharmacy


      31.86


      28.24


      11.3 %


      32.38


      28.51


      12.0 %

      Wholesale


      47.00


      42.13


      10.4 %


      33.08


      29.47


      10.9 %

      Total


      154.54


      123.43


      20.1 %


      148.81


      114.53


      23.0 %

      Revenue from the retail drugstores business decreased by $7.67 million, or 9.2%, to $75.68 million for the fiscal year ended March 31, 2024, from $83.35 million for the same period of last year. After excluding the impact of exchange rate fluctuation, the actual retail drugstores sales decreased by 5.0%. The decrease in its retail drugstore sales is primarily due to local consumption cutback, extremely competitive market and the temporary surge of sale in the second half of fiscal 2023, which is nonrecurring and is due to Chinese government's sanction lift on COVID-19.

      Revenue from the online pharmacy business decreased by $0.53 million, or 1.6%, to $31.86 million for the fiscal year ended March 31, 2024, from $32.38 million for the same period of last year. The decrease was primarily caused by a decrease in sales via e-commerce platforms such as JD and Pinduoduo. Because the online prices are transparent, to be competitive in online sales, the Company has to keep low prices. More competitors came into the online retail sales market. As the Company does not have dominating power such as lowest prices or exclusive products, it may not be able to improve its sales significantly in the near future.

      Revenue from the wholesale business increased by $13.93 million, or 42.1%, to $47.00 million for the fiscal year ended March 31, 2024, from $33.08 million for the same period of last year. In the year ended March 31, 2024, Online platforms such as Pharmacist Help, Yiyao Help and Yao Help have become popular ways to transact medical products by bulk. The platforms attract a plenty of buyers and sellers, so both parties have extended opportunities to expose themselves. The Company has spent significant efforts in exploring these buyers with certain products at reasonable prices as a result, the Company is able to attract more buyers and promote its sales. The Company believes that selling on the modern wholesale platform may be a new growth point. Therefore, the Company is actively looking for potential acquisition targets with trading platform to strengthen its wholesale business.

      Gross profit and gross margin

      Total cost of goods sold increased by $8.90 million, or 7.8%, to $123.43 million for the fiscal year ended March 31, 2024, from $114.53 million for the same period of last year. Gross profit decreased by $3.17 million, or 9.3%, to $31.11 million for the fiscal year ended March 31, 2024 from $34.28 million for the same period of last year. Overall gross margin decreased by 2.9 percentage points to 20.1% for the fiscal year ended March 31, 2024, from 23.0% for the same period of last year, due to lower retail drugstores profit margins.

      Gross margins for retail drugstores, online pharmacy and wholesale were 29.9%, 11.3%, and 10.4%, respectively, for the fiscal year ended March 31, 2024, compared to gross margins for retail drugstores, online pharmacy and wholesale of 32.2%, 12.0%, and 10.9%, respectively, for the same period of last year.

      Loss from operations

      Sales and marketing expenses decreased by $1.79 million, or 6.1%, to $27.39 million for the fiscal year ended March 31, 2024 from $29.18 million for the same period of last year. The decrease in selling expenses was primarily due to a decrease in expense related to Normal Nucleic Acid Testing ("NNAT") as it is no longer requested by local government and a decrease in fee charged by distribution channels resulting from the decrease in retail drugstores and online pharmacy sales.

      General and administrative expenses decreased by $8.41 million, or 53.7%, to $7.26 million for the fiscal year ended March 31, 2024 from $15.67 million for the same period of last year. The decrease in general and administrative expenses was primarily due to the decrease in bad debt expense. Such expenses as a percentage of revenue decreased to 4.7% from 10.5% for the same period a year ago. In the year ended March 31, 2024, the Company recorded a reduction of $0.22 million in the allowance account for bad debts as compared to the increase of $7.58 million in the allowance account for bad debts in FY2023.

      Loss from operations was $3.53 million for the fiscal year ended March 31, 2024, compared to $20.93 million for the same period of last year. Operating margin was (2.3)% and (14.1)% for the fiscal year ended March 31, 2024 and 2023, respectively.

      Net loss

      Net loss was $4.23 million, or $2.93 per basic and diluted share for the fiscal year ended March 31, 2024, compared to net loss of $21.14 million, or $41.46 per basic and diluted share for the same period of last year.

      Financial Condition

      As of March 31, 2024, the Company had cash of $20.15 million, compared to $18.81 million as of March 31, 2023. Net cash used in operating activities was $3.16 million for the fiscal year ended March 31, 2024, compared to $3.28 million for the same period of last year. The change is primarily attributable to an increase in net income of $16.90 million, an increase in accounts receivable of $0.73 million, an increase in cash provided by accounts payable of $4.24 million and an increase in cash provided by other payables and accrued liabilities of $2.21 million, offset by a decrease in bad debt direct write-off and provision of $6.79 million, a decrease in inventories and biological assets of $1.18 million and a decrease in stock compensation of $10.36 million. Net cash used in investing activities was $2.04 million for the fiscal year ended March 31, 2024, compared to $0.32 million for the same period of last year. The change is primarily attributable to investment in a joint venture and purchases of long-term assets. Net cash provided by financing activities was $8.00 million for the fiscal year ended March 31, 2024, compared to $2.37 million for the same period of last year. The change is primarily due to notes payable and proceeds from short-term bank loan.

      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
      +1-646-932-7242
      [email protected]

      CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
      CONSOLIDATED BALANCE SHEETS








      March 31,
      2024


      March 31,
      2023

      ASSETS





      CURRENT ASSETS





         Cash and cash equivalents


      $

      20,149,806


      $

      18,807,936

         Restricted cash



      12,724,365



      12,762,708

         Trade accounts receivables



      15,824,103



      14,119,606

         Inventories



      16,248,373



      15,309,100

         Other receivables, net



      2,938,049



      2,725,015

         Advances to suppliers



      914,776



      142,417

         Due from related parties



      313,346



      -

         Other current assets



      569,544



      616,008

            Total current assets



      69,682,362



      64,482,790








      OTHER ASSETS







          Property and equipment, net



      4,906,589



      5,100,264

          Long-term investment



      1,195,261



      1,772,072

          Farmland assets



      634,153



      666,721

          Long-term deposits



      1,119,006



      1,038,125

          Other noncurrent assets



      682,437



      790,056

          Operating lease right-of-use assets



      13,827,360



      13,924,826

          Intangible assets, net



      3,009,922



      3,195,748

             Total other assets



      25,374,728



      26,487,812

                Total assets


      $

      95,057,090


      $

      90,970,602








      LIABILITIES AND SHAREHOLDERS' EQUITY







      CURRENT LIABILITIES







         Short-term loan payable


      $

      276,997


      $

      -

         Accounts payable



      31,630,131



      26,990,250

         Notes payable



      31,676,335



      29,255,776

         Other payables



      2,493,482



      1,314,919

         Due to related parties



      1,833,509



      683,560

         Customer deposits



      518,241



      695,931

         Taxes payable



      682,239



      1,706,909

          Accrued liabilities



      386,395



      756,516

          Current portion of operating lease liabilities



      4,862,766



      5,131,373

              Total current liabilities



      74,360,095



      66,535,234

          Long-term operating lease liabilities



      6,403,858



      7,768,216

              Total liabilities



      80,763,953



      74,303,450








      COMMITMENTS AND CONTINGENCIES














      SHAREHOLDERS' EQUITY







        Ordinary shares; $0.24 par value; 150,000,000 shares authorized; 1,743,362 and
            1,184,861 shares issued and outstanding as of March 31, 2024 and 2023,
            respectively



      418,407



      284,367

        Preferred shares; $0.001 par value; 10,000,000 shares authorized; nil issued and
            outstanding as of March 31, 2024 and 2023



      -



      -

        Additional paid-in capital



      86,413,978



      83,958,418

        Statutory reserves



      1,309,109



      1,309,109

        Accumulated deficit



      (73,507,246)



      (69,273,018)

        Accumulated other comprehensive income



      1,005,762



      1,735,135

           Total shareholders' equity attributed to China Jo-Jo



      15,640,010



      18,014,011

           Noncontrolling interests



      (1,346,873)



      (1,346,859)

           Total shareholders' equity



      14,293,137



      16,667,152

              Total liabilities and shareholders' equity


      $

      95,057,090


      $

      90,970,602

      CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS




      For the years ended
      March 31,


      2024


      2023


      2022

      REVENUES, NET

      $

      154,541,077


      $

      148,811,976


      $

      164,392,555










      COST OF GOODS SOLD


      123,432,529



      114,531,512



      127,873,515










      GROSS PROFIT


      31,108,548



      34,280,464



      36,519,040










      SELLING EXPENSES


      27,385,587



      29,177,163



      30,876,959

      GENERAL AND ADMINISTRATIVE EXPENSES


      7,257,524



      15,668,684



      8,187,176

      STOCK BASED COMPENSATION


      -



      10,360,000



      -

      IMPAIRMENT OF LONG-LIVED ASSETS


      -



      -



      148,795

      TOTAL OPERATING EXPENSES


      34,643,111



      55,205,847



      39,212,930










      LOSS FROM OPERATIONS


      (3,534,563)



      (20,925,383)



      (2,693,890)










      OTHER INCOME (EXPENSES):









      INTEREST INCOME


      516,637



      883,908



      401,921

      INTEREST EXPENSE


      (13,604)



      (65,854)



      (262,218)

      INVESTMENT LOSS


      (1,607,537)



      (2,316,994)



      -

      OTHER INCOME (EXPENSES)


      467,687



      1,680,087



      455,547










      LOSS BEFORE INCOME TAXES


      (4,171,380)



      (20,744,236)



      (2,098,640)










      PROVISION FOR INCOME TAXES


      62,862



      394,541



      1,099,726










      NET LOSS


      (4,234,242)



      (21,138,777)



      (3,198,366)










      LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING
         INTEREST


      (14)



      (252)



      (6,247)










      NET LOSS ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES,
         INC.


      (4,234,228)



      (21,138,525)



      (3,192,119)










      OTHER COMPREHENSIVE LOSS









      FOREIGN CURRENCY TRANSLATION ADJUSTMENTS


      (729,373)



      (2,617,857)



      1,534,807










      COMPREHENSIVE LOSS


      (4,963,615)



      (23,756,634)



      (1,663,559)










      WEIGHTED AVERAGE NUMBER OF SHARES:









             Basic


      1,444,263



      509,828



      173,966

             Diluted


      1,444,263



      509,828



      173,966










      LOSS PER SHARE:









             Basic

      $

      (2.93)


      $

      (41.46)


      $

      (18.35)

             Diluted

      $

      (2.93)


      $

      (41.46)


      $

      (18.35)

      CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
      CONSOLIDATED STATEMENTS OF CASH FLOWS




      For the years ended
      March 31,


      2024


      2023


      2022

         CASH FLOWS FROM OPERATING ACTIVITIES:






      Net loss

      $

      (4,234,242)


      $

      (21,138,777)


      $

      (3,198,366)

      Adjustments to reconcile net loss to net cash used in operating
         activities:









         Depreciation and amortization


      790,449



      718,002



      1,256,491

            Bad debt direct write-off and provision and reversal


      (249,257)



      7,579,886



      939,720

            Amortization of right-of-use assets


      4,594,172



      -



      -

            Loss from disposal of property and equipment


      107,251



      -



      -

            Impairment of long lived assets


      -



      -



      148,795

            Share-based compensation


      -



      10,360,000



      -

            Investment loss


      1,607,537



      2,316,994



      -

            Change in operating assets and liabilities:









            Accounts receivable


      (1,804,440)



      (2,531,755)



      (2,657,283)

            Notes receivable


      19,943



      (20,861)



      40,260

            Inventories and biological assets


      (1,699,621)



      (522,550)



      1,523,098

            Other receivables


      (672,830)



      (958,671)



      (1,927,692)

            Advances to suppliers


      (839,221)



      201,984



      (171,783)

            Long term deposit


      (132,568)



      589,653



      (159,508)

            Other current assets


      19,076



      331,426



      376,134

            Other noncurrent assets


      69,539



      (30,483)



      62,394

            Amount due from related parties


      (317,828)



      -



      -

            Accounts payable


      6,002,186



      1,765,488



      (3,558,050)

            Other payables and accrued liabilities


      868,975



      (1,341,447)



      99,132

            Customer deposits


      (144,761)



      (1,035,456)



      678,601

            Taxes payable


      (948,277)



      433,054



      1,162,084

            Operating lease liabilities


      (6,191,522)



      -



      -

      Net cash used in operating activities


      (3,155,439)



      (3,283,513)



      (5,385,973)










      CASH FLOWS FROM INVESTING ACTIVITIES:









            Acquisition of equipment and building


      (330,677)



      (118,272)



      (89,960)

            Investment in a joint venture


      (1,116,212)



      (4,379)



      -

            Purchases of intangible assets


      (66,973)



      (12,774)



      (7,012)

            Additions to leasehold improvements


      (525,988)



      (180,672)



      (209,166)

      Net cash used in investing activities


      (2,039,850)



      (316,097)



      (306,138)










      CASH FLOWS FROM FINANCING ACTIVITIES:









            Proceeds from short-term bank loan


      1,116,212



      -



      -

            Repayment of short-term bank loan


      (837,159)



      -



      (779,059)

            Repayment of third parties loan


      -



      (1,811,558)



      (2,613,965)

            Proceeds from notes payable


      56,875,403



      57,965,013



      65,370,181

            Repayment of notes payable


      (52,997,171)



      (60,273,598)



      (57,829,269)

            Proceeds from issuance of shares and warrants in private placements


      2,589,600



      7,325,000



      -

            Proceeds from other payable-related parties


      1,257,406



      43,785



      689,010

            Repayment of other payable-related parties


      -



      (882,486)




      Net cash provided by financing activities


      8,004,291



      2,366,156



      4,836,898










      EFFECT OF EXCHANGE RATE ON CASH


      (1,505,475)



      (2,535,479)



      1,522,146










      INCREASE IN CASH AND CASH EQUIVALENTS AND
         RESTRICTED CASH


      1,303,527



      (3,768,933)



      666,933

      CASH AND CASH EQUIVALENTS AND RESTRICTED CASH,
          beginning of year


      31,570,644



      35,339,577



      34,672,644

      CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, end
          of year

      $

      32,874,171


      $

      31,570,644


      $

      35,339,577










      SUPPLEMENTAL DISCLOSURE OF CASH FLOW
          INFORMATION:









             Cash paid for income taxes

      $

      149,023


      $

      63,668


      $

      3,955

             Cash paid for interest


      13,604



      64,943



      262,218










             NON-CASH ACTIVITIES:









             Cashless exercise of warrants

      $

      -


      $

      135,118


      $

      -

      SOURCE China Jo-Jo Drugstores, Inc.

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