China Jo-Jo Drugstores Reports Fiscal Year 2018 Financial Results

China Jo-Jo Drugstores Reports Fiscal Year 2018 Financial Results

PR Newswire

HANGZHOU, China, June 29, 2018 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. CJJD ("Jo-Jo Drugstores" or the "Company"), a leading online and offline retailer and wholesale distributor of pharmaceutical and other healthcare products and a healthcare provider in China, today announced its financial results for the fiscal year ended March 31, 2018.

Mr. Lei Liu, Chief Executive Officer and Chairman of Jo-Jo Drugstores, Inc., commented, "Fiscal year 2018 has been an important transition year for China Jo-Jo Drugstores with revenues increased by 17.9% year-over-year to $96.11 million. We expanded our retail business, opening 55 new retail drugstores in key locations, and continued to improve services in our existing stores. While our e-commerce business continued its transition following the suspension of OTC drug sales on e-commerce platforms in fiscal year 2017, in the third and fourth quarters of fiscal 2018, our online pharmacy results began to stabilize as we optimized our product range."

Mr. Liu continued, "We expect our efforts to focus on product selection and price negotiation with suppliers to increase our sales profit margin. Our e-commerce segment will continue its evolution following our initiatives to cooperate with commercial insurance companies, such as the People's Insurance Company of China, and other active strategies. We look forward to executing our business objectives and we believe that there is still plenty of room for us to continue to grow at a rapid rate in the foreseeable future."

Fiscal Year 2018 Financial Highlights





For the Fiscal Year Ended March 31,

($ millions, except per share data)



2018



2017



 Change

Revenues



96.11



81.50



17.9%

      Retail drugstores



61.98



51.79



19.7%

      Online pharmacy



12.13



15.39



(21.2%)

      Wholesale



22.00



14.32



53.6%

Gross profit



20.13



16.63



21.0%

Gross margin



20.9%



20.4%



0.5 pp*

Loss from operations



(18.02)



(6.10)



195.5%

Net loss attributable to Jo-Jo Drugstores



(17.06)



(5.64)



202.3%

Loss per share



(0.68)



(0.28)



141.4%



*Notes: pp represents percentage points

 

  • Revenues increased by 17.9% to $96.11 million for the fiscal year ended March 31, 2018 from $81.50 million for the last fiscal year, mainly due to the increase in retail drugstores and wholesale business, partially offset by the decrease in online pharmacy business.
  • Gross profit increased by 21.0% to $20.13 million for the fiscal year ended March 31, 2018 from $16.63 million for the last fiscal year. Gross margin increased by 0.5 percentage points to 20.9% from 20.4% for the last fiscal year.

Fiscal Year ended March 31, 2018 Financial Results

Revenue

Revenue for the fiscal year ended March 31, 2018 increased by $14.61 million, or 17.9%, to $96.11 million from $81.50 million for the last fiscal year. The increase in revenue was primarily due to the increase in retail drugstores and wholesale business, partially offset by the decrease in online pharmacy business.





For the Fiscal Year Ended March 31,





2018



2017

($ millions)



Revenues



Cost of

Goods



Gross

Margin



Revenues



Cost of

Goods



Gross

Margin



Retail drugstores



61.98



45.92



25.9%



51.79



38.09



26.5%



Online pharmacy



12.13



10.86



10.5%



15.39



13.83



10.1%



Wholesale



22.00



19.21



12.7%



14.32



12.95



9.6%



Total



96.11



75.99



20.9%



81.50



15.39



20.4%



Revenue from the retail drugstores segment increased by $10.19 million, or 19.7%, to $61.98 million for the fiscal year ended March 31, 2018 from $51.79 million for the last fiscal year. The increase was primarily due to the increased number of stores, close monitoring of health products suitable to communities, brand-name health product sales campaign in cooperation with brand name suppliers, and value-added customer services such as chronic disease monitoring.

Revenue from the online pharmacy segment decreased by $3.26 million, or 21.2%, to $12.13 million for the fiscal year ended March 31, 2018 from $15.39 million for the last fiscal year. The decrease was mainly caused by a decline in our sales via e-commerce platforms. The decline in sales was due to the suspension of OTC drug sales on e-commerce platforms in the second quarter of fiscal year 2017 by the CFDA. The Company is adding more non-medical health products such as nutritional supplements into our sales menu to counteract the decline in sales of OTC drug category via e-commerce platforms.

Revenue from the wholesale segment increased by $7.68 million, or 53.6%, to $22.00 million for the fiscal year ended March 31, 2018 from $14.32 million for the last fiscal year. The increase was primarily a result of the Company's ability to resell certain products, which our retail stores made large orders on, to other vendors at competitive prices.

Gross profit and gross margin

Total cost of goods sold increased by $11.12 million, or 17.1%, to $75.99 million for the fiscal year ended March 31, 2018 from $64.87 million for the last fiscal year. Gross profit increased by $3.50 million, or 21.0%, to $20.13 million for the fiscal year ended March 31, 2018 from $16.63 million for the last fiscal year. Overall gross margin increased by 0.5 percentage points to 20.9% for the fiscal year ended March 31, 2018, compared to 20.4% for the last fiscal year.

Gross margins for retail drugstores, online pharmacy and wholesale were 25.9%, 10.5%, and 12.7%, respectively, for the fiscal year ended March 31, 2018. This compared to gross margins for retail drugstores, online pharmacy and wholesale of 26.5%, 10.1%, and 9.6%, respectively, for the last fiscal year.

Loss from operations

Sales and marketing expenses increased by $5.82 million, or 45.0%, to $18.74 million for the fiscal year ended March 31, 2018 from $12.92 million for the last fiscal year, primarily due to increase in labor and rent related to our store expansions and rising local living cost.

General and administrative expenses increased by $10.14 million, or 131.9%, to $17.82 million for the fiscal year ended March 31, 2018 from $7.68 million for the last fiscal year. The increase in general and administrative expenses was primarily due to the increased number of administrative staff and their compensation, as well as additional accounts receivable and advances to vendors allowance of $4.7 million in the fiscal year ended March 31, 2018 as compared to an increase of $0.7 million in allowance in the year ended March 31, 2017.

Impairment of long-lived assets was $1.58 million for the fiscal year ended March 31, 2018, compared to $2.12 million for the last fiscal year. Jiuxin Medicine started outsourcing its logistics service to Astro Boy Cloud Pan (Hangzhou) Storage and Logistics Co. Ltd, Jiuxin Medicine's warehouse lease has been terminated. As a result, approximately unamortized $1,583,186 warehouse improvement is recognized as expense in the year ended March 31, 2018. Such impairment was made after we estimated that the implied fair value of long-lived assets was lower than the carrying value.

Loss from operations increased by $11.92 million, or 195.5%, to $18.02 million for the fiscal year ended March 31, 2018 from $6.10 million for the last fiscal year. Operating margin was negative 18.8% for the fiscal year ended March 31, 2018, compared to negative 7.5% for the last fiscal year.

Net loss

Net loss attributable to common shareholders for the fiscal year ended March 31, 2018 was $17.06 million, or $0.68 per basic and diluted share. This compared to net loss attributable to common shareholders of $5.64 million, $0.28 per basic and diluted share, for the last fiscal year.

Financial Condition

As of March 31, 2018, the Company had cash of $15.13 million, compared to $18.36 million as of March 31, 2017. Net cash used in operating activities was $2.07 million for the fiscal year ended March 31, 2018, compared to net cash provided by operating cash flow of $1.56 million for the last fiscal year. Net cash used in investing activities was $2.98 million for the fiscal year ended March 31, 2018, compared to $0.05 million for the last fiscal year. Net cash used in financing activities was $0.77 million for the fiscal year ended March 31, 2018, compared to net cash provided by financing activities of $10.64 million for the last 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 in China. Jo-Jo Drugstores currently operates retail drugstores and an online pharmacy. It is also a wholesale distributor of products similar to those carried in its pharmacies and it cultivates and sells herbs used for traditional Chinese medicine. For more information about the Company, please visit http://www.chinajojodrugstores.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

frank.zhao@jojodrugstores.com

Steve Liu

Investor Relations Director

steve.liu@jojodrugstores.com

Investor Relations Contact:

Tina Xiao

Ascent Investor Relations LLC

+1-917-609-0333

tina.xiao@ascent-ir.com

 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS







March 31,





March 31,







2018





2017



ASSETS













CURRENT ASSETS













Cash



$

15,132,640





$

18,364,424



Restricted cash





16,319,551







9,431,386



Financial assets available for sale





175,140







87,068



Notes receivable





279,082







253,394



Trade accounts receivable, net of allowance for doubtful accounts of $4,561,314 and

    $1,415,505, as of March 31, 2018 and 2017 respectively





8,322,393







8,561,596



Inventories





13,429,568







9,923,101



Other receivables, net of allowance for doubtful accounts of $ 184,720 and $26,854,

    as of March 31, 2018 and 2017, respectively





3,098,079







2,269,193



Advances to suppliers, net of allowance for doubtful accounts of $3,058,092 and

    $1,502,255, as of March 31, 2018 and 2017, respectively





3,447,452







5,504,141



Other current assets





2,116,237







1,566,155



Total current assets





62,320,142







55,960,458





















PROPERTY AND EQUIPMENT, net





2,843,640







4,263,157





















OTHER ASSETS

















Long-term investment





40,890







46,152



Farmland assets





796,286







718,787



Long term deposits





2,501,968







2,294,848



Other noncurrent assets





1,253,352







1,177,005



Intangible assets, net





4,056,414







2,712,611



Total other assets





8,648,910







6,949,403





















Total assets



$

73,812,692





$

67,173,018





















LIABILITIES AND STOCK HOLDERS' EQUITY

















CURRENT LIABILITIES

















Short-term loan payable



$

-





$

-



Accounts payable, trade





25,259,526







19,441,195



Notes payable





19,180,200







12,691,575



Other payables





4,272,523







2,916,283



Other payables - related parties





850,342







927,052



Customer deposits





4,040,867







2,675,030



Taxes payable





366,040







681,939



Accrued liabilities





841,993







679,350



Total current liabilities





54,811,491







40,012,424





















Purchase option and warrants liability





138,796







496,217



Total liabilities





54,950,287







40,508,641





















COMMITMENTS AND CONTINGENCIES



































STOCKHOLDERS' EQUITY

















Common stock; $0.001 par value; 250,000,000 shares authorized; 28,936,778 and

    25,214,678 shares issued and outstanding as of March 31, 2018 and March 31,

    2017





28,937







25,215



Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and 

    outstanding as of March 31, 2018 and March 31,2017





-







-



Additional paid-in capital





43,599,089







36,581,248



Statutory reserves





1,309,109







1,309,109



Accumulated deficit





(29,661,190)







(12,601,257)



Accumulated other comprehensive income





3,586,460







1,350,062



Total stockholders' equity





18,862,405







26,664,377





















Total liabilities and stockholders' equity



$

73,812,692





$

67,173,018



 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS







For the years ended

March 31,







2018





2017



REVENUES, NET



$

96,112,706





$

81,499,045





















COST OF GOODS SOLD





75,987,537







64,872,127





















GROSS PROFIT





20,125,169







16,626,918





















SELLING EXPENSES





18,739,492







12,923,192



GENERAL AND ADMINISTRATIVE EXPENSES





17,823,661







7,684,862



IMPAIRMENT OF LONG-LIVED ASSETS





1,583,186







2,117,042



TOTAL OPERATING EXPENSES





38,146,339







22,725,096





















LOSS FROM OPERATIONS





(18,021,170)







(6,098,178)





















INTEREST INCOME





478,976







379,790



INTEREST EXPENSE





-







(1,349)



OTHER INCOME, NET





201,096







19,888



CHANGE IN FAIR VALUE OF PURCHASE OPTION AND WARRANTS

LIABILITY





357,421







140,032





















LOSS BEFORE INCOME TAXES





(16,983,677)







(5,559,817)





















PROVISION FOR INCOME TAXES





76,256







84,387





















NET LOSS





(17,059,933)







(5,644,204)





















OTHER COMPREHENSIVE LOSS

















Foreign currency translation adjustments





2,236,398







(1,507,751)





















COMPREHENSIVE LOSS





(14,823,535)







(7,151,955)





















WEIGHTED AVERAGE NUMBER OF SHARES:

















Basic





25,241,748







20,396,217



Diluted





25,241,748







20,396,217





















LOSS PER SHARES:

















Basic



$

(0.68)





$

(0.28)



Diluted



$

(0.68)





$

(0.28)



 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY





































Accumulated



















Common Stock











Retained Earnings





other





Non-













Number of











Paid-in





Statutory











comprehensive





controlling













shares





Amount





capital





reserves





Unrestricted





income/(loss)





interest





Total



BALANCE,

March 31,

2016.





17,735,504





$

17,736







22,088,267







1,309,109







(6,957,053)







2,857,813







-





$

19,315,872





































































Stock based

    compensation





1,690,174







1,690







2,246,960







-







-







-







-







2,248,650



Net loss





-







-







-







-







(5,644,204)







-







-







(5,644,204)



Private direct

    offering

    financing





4,840,000







4,840







10,643,160







-







-







-







-







10,648,000



Issuance of

    common

    stocks in

    exchange

    of debts





949,000







949







1,602,821







-







-























1,603,810





































































Foreign

    currency

    translation

    loss





-







-







-







-







-







(1,507,751)















(1,507,751)



BALANCE,

    March 31,

    2017.





25,214,678





$

25,215







36,581,248







1,309,109







(12,601,257)







1,350,062







-





$

26,664,377



Stock based

    compensation





3,722,100







3,722







7,017,841







-















-







-







7,021,563



Net loss





-























-







(17,059,933)







-







-







(17,059,933)



Foreign

    currency

    translation

    loss





-







-







-







-















2,236,398







-







2,236,398



BALANCE,

    March 31,

    2018.





28,936,778







28,937







43,599,089







1,309,109







(29,661,190)







3,586,460







-







18,862,405



 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS







For the years ended

March 31,







2018





2017



CASH FLOWS FROM OPERATING ACTIVITIES:













Net income



$

(17,059,933)





$

(5,644,204)



Adjustments to reconcile net income to net cash provided by operating activities:

















Bad debt direct write-off and provision





4,009,636







679,271



Depreciation and amortization





1,383,810







1,316,747



Impairment of prepayment of lease use right





-







1,246,788



Farmland assets impairment





-







761,403



Impairment of land and road improvement





-







108,851



Impairment of leasehold improvement





1,583,186







-



Stock based compensation





7,021,563







2,248,650



Change in fair value of purchase option derivative liability





(357,421)







(140,084)



Change in operating assets:

















Accounts receivable, trade





(2,072,486)







(717,386)



Notes receivable





(1,005)







(244,713)



Inventories and biological assets





(2,411,209)







191,564



Other receivables





(489,334)







(773,359)



Advances to suppliers





1,121,006







(3,020,156)



Long term deposit





15,103







-



Other current assets





(377,391)







(148,983)



Other noncurrent assets





36,091







35,509



Change in operating liabilities:

















Accounts payable, trade





3,726,625







3,936,178



Other payables and accrued liabilities





1,115,267







1,250,755



Customer deposits





1,048,939







237,891



Taxes payable





(362,513)







234,780



Net cash provided by operating activities





(2,070,066)







1,559,502





















CASH FLOWS FROM INVESTING ACTIVITIES:

















Disposal of financial assets available for sale





-







445,968



Purchase of financial assets available for sale





(75,513)







(89,194)



Acquisition of equipment





(414,398)







(140,209)



Increase intangible assets





(1,140,102)







-



Termination of a joint venture





-







104,059



Investment in a joint venture





-







(96,180)



Additions to leasehold improvements





(1,347,489)







(270,990)



Net cash provided by (used in) investing activities





(2,977,502)







(46,546)





















CASH FLOWS FROM FINANCING ACTIVITIES:

















Repayment of short-term bank loan





-







(29,731)



Change in restricted cash





(5,664,224)







3,519,030



Proceeds from notes payable





27,461,423







24,577,096



Repayment of notes payable





(22,476,740)







(28,445,215)



Changes in other payables-related parties





-







375,659



Proceeds from sale of stock and warrants





-







10,648,000



Repayment of other payables-related parties





(91,395)







-



Net cash provided by (used in) financing activities





(770,936)







10,644,839





















EFFECT OF EXCHANGE RATE ON CASH





2,586,720







(465,244)





















(DECREASE) INCREASE IN CASH





(3,231,784)







11,692,551





















CASH, beginning of year





18,364,424







6,671,873





















CASH, end of year



$

15,132,640





$

18,364,424





















SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

















Cash paid for interest



$

-





$

1,349



Cash paid for income taxes



$

27,825





$

57,247



Issuance of common stocks in exchange of debts



$

-





$

1,603,810



 

 

Cision View original content:http://www.prnewswire.com/news-releases/china-jo-jo-drugstores-reports-fiscal-year-2018-financial-results-300674619.html

SOURCE China Jo-Jo Drugstores, Inc.

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