China Jo-Jo Drugstores Reports Fiscal Year 2024 Financial Results

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."

• 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.

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]

SOURCE China Jo-Jo Drugstores, Inc.