CJJD
$1.06
China Jojo Drugstore
($.04)
(3.64%)
Earnings Details
Quarter September 2020
Friday, November 13, 2020 9:00:00 AM
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Summary

China Jojo Drugstore (CJJD) Recent Earnings

China Jojo Drugstore (CJJD) reported a Quarter September 2020 loss of $0.04 per share on revenue of $30.8 million.. Revenue grew 8.8% on a year-over-year basis.

Results
Reported Earnings
($0.04)
Earnings Whisper
-
Consensus Estimate
Reported Revenue
$30.8 Mil
Revenue Estimate
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

China Jo-Jo Drugstores Reports Second Quarter 2021 Financial Results

HANGZHOU, China, Nov. 13, 2020 /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 second fiscal quarter ended September 30, 2020.

Mr. Lei Liu, Chairman and CEO of Jo-Jo Drugstores, commented, "We are pleased with our second quarter performance as we delivered another quarter of strong results. Our revenue and gross profit recorded $30.84 million and $7.01 million for the second fiscal quarter of 2021, up 8.8% and 4.8% compared to same period of fiscal year 2020. Revenue year-over-year from online pharmacy increased by 127.4%. We have always been deeply committed to our communities, and we have taken necessary measures to protect the safety and health of our customers and employees during the global COVID-19 pandemic while making solid progress on our transformation strategy of 'Medical Linkage & Technology Empowerment'. The environment surrounding COVID-19 is accelerating our transformation, giving us new opportunities to demonstrate our capabilities and gain retail market share in China. We are building a strong foundation for sustainable growth and setting the platform to engage with consumers, and we are remaining focused on creating value for all our stakeholders."  

Second Quarter of Fiscal 2021 Financial Highlights



For the Three Months Ended September 30,

($ millions, except per share data)


2020


2019


% Change

Revenue


30.84


28.35


8.8%

      Retail drugstores


17.93


18.00


-0.4%

      Online pharmacy


5.35


2.35


127.4%

      Wholesale


7.56


8.00


-5.5%

Gross profit


7.01


6.69


4.8%

Gross margin


22.7%


23.6%


-0.9 pp*

Loss from operations


(1.52)


(1.62)


5.7%

Net loss


(1.53)


(1.35)


-13.4%

Loss per share


(0.04)


(0.04)


-%


*Notes: pp represents percentage points

  • Revenue increased by 8.8% to $30.84 million for the three months ended September 30, 2020 from $28.35 million for the same period of last year.
  • Gross profit increased by 4.8% to $7.01 million for the three months ended September 30, 2020 from $6.69 million for the same period of last year.
  • Gross margin decreased slightly by 0.9 percentage points to 22.7% for the three months ended September 20, 2020 from 23.6% for the same period of last year.
  • Net loss was $1.53 million, or $0.04 per basic and diluted share, for the three months ended September 30, 2020, compared to net loss of $1.35 million, or $0.04 per basic and diluted share, for the same period of last year.

Second Quarter of Fiscal 2021 Financial Results

Revenue

Revenue for the three months ended September 30, 2020 increased by $2.49 million, or 8.8%, to $30.84 million from $28.35 million for the same period of last year. The increase in revenue was primarily due to the growth in online pharmacy business.



For the Three Months Ended September 30,



2020


2019

($ millions)


Revenue


Cost of
Goods


Gross
Margin


Revenue


Cost of
Goods


Gross
Margin

Retail drugstores


17.93


12.33


31.3%


18.00


12.47


30.7%

Online pharmacy


5.35


4.74


11.3%


2.35


2.03


13.6%

Wholesale


7.56


6.76


10.7%


8.00


7.16


10.6%

Total


30.84


23.83


22.7%


28.35


21.66


23.6%

Revenue from the retail drugstores business decreased slightly by $0.07 million, or 0.4%, to $17.93 million for the three months ended September 30, 2020 from $18.00 million for the same period of last year. The slight decrease was primarily due to the Company's strategical abandoning of the sales of certain low-profit margin products reimbursed by National Healthcare Security Administration ("NHSA" hereafter) due to its overall budget, elimination of a variety of drugs off the list of drugs reimbursed by the local NHSA since September 1, 2020, and the negative effect on the overall economy from COVID-19.

Revenue from the online pharmacy business increased by $3.00 million, or 127.4%, to $5.35 million for the three months ended September 30, 2020 from $2.35 million for the same period of last year. The increase was primarily caused by an increase in sales of prescription drugs via e-commerce platforms such as Tmall. Prescription drugs used to be prohibited from sales online due to safety concern. However, because the nation has lifted the ban order, online prescription drug sales become popular. As a result, the sale of prescription drugs was $1.76 million in the three months ended September 30, 2020 as compared to none in the three month ended September 30, 2019. Additionally, the Company maintained a membership care program targeted at customers with chronic disease. The Company has closely interacted with its members via WeChat by providing healthcare knowledge and reminding them to refill medicine. By implementing a personalized customer care program, the Company was able to promote its sales.

Revenue from the wholesale business decreased by $0.44 million, or 5.5%, to $7.56 million for the three months ended September 30, 2020 from $8.00 million for the same period of last year. The decrease was primarily due to the fact that a key salesperson was sick, which slowed certain business with customers.

Gross profit and gross margin

Total cost of goods sold increased by $2.17 million, or 10.0%, to $23.83 million for the three months ended September 30, 2020 from $21.66 million for the same period of last year. Gross profit increased by $0.32 million, or 4.8%, to $7.01 million for three months ended September 30, 2020 from $6.69 million for the same period of last year. Overall gross margin decreased slightly by 0.9 percentage points to 22.7% for the three months ended September 30, 2020, from 23.6% for the same period of last year.

Gross margins for retail drugstores, online pharmacy and wholesale were 31.3%, 11.3%, and 10.7%, respectively, for the three months ended September 30, 2020, compared to gross margins for retail drugstores, online pharmacy and wholesale of 30.7%, 13.6%, and 10.6%, respectively, for the same period of last year.

Loss from operations

Selling and marketing expenses decreased by $0.01 million, or 0.2%, to $6.48 million for the three months ended September 30, 2020 from $6.49 million for the same period of last year. The decrease in selling and marketing expenses was primarily due to the control of in-store advertising expense, offset by the increase in fee charged by various platforms as a result of sale increase in the Company's online pharmacy.

General and administrative expenses increased by $0.24 million, or 13.0%, to $2.06 million for the three months ended September 30, 2020 from $1.82 million for the same period of last year. In the three months ended September 30, 2020, the Company reversed bad debt allowance of $304,397 as compared to an increase in bad debt allowance of $9,018 in the same period of last year. Excluding such effect, the general and administrative expenses increased by $551,039 period over period, which reflects the increase in staff and administration expense.

Loss from operations was $1.52 million for the three months ended September 30, 2020, compared to $1.62 million for the same period of last year. Operating margin was (4.9)% and (5.7)% for the three months ended September 30, 2020 and 2019 respectively.

Net loss

Net loss was $1.53 million, or $0.04 per basic and diluted share for the three months ended September 30, 2020, compared to net loss of $1.35 million, or $0.04 per basic and diluted share for the same period of last year.

Six Months Ended September 30, 2020 Financial Highlights



For the Six Months Ended September 30,

($ millions, except per share data)


2020


2019


% Change

Revenue


61.90


53.63


15.4%

      Retail drugstores


36.74


34.74


5.8%

      Online pharmacy


10.26


4.79


114.0%

      Wholesale


14.90


14.10


5.6%

Gross profit


14.99


12.75


17.5%

Gross margin


24.2%


23.8%


0.4 pp*

Loss from operations


(1.94)


(4.38)


55.7%

Net loss


(1.92)


(3.73)


48.6%

Loss per share


(0.05)


(0.10)


50.0%


*Notes: pp represents percentage points

  • Revenue increased by 15.4% to $61.90 million for the six months ended September 30, 2020 from $53.63 million for the same period of last year.
  • Gross profit increased by 17.5% to $14.99 million for the six months ended September 30, 2020 from $12.75 million for the same period of last year.
  • Gross margin increased by 0.4 percentage points to 24.2% for the six months ended September 20, 2020 from 23.8% for the same period of last year.
  • Net loss was $1.92 million, or $0.05 per basic and diluted share, for the six months ended September 30, 2020, compared to net loss of $3.73 million, or $0.10 per basic and diluted share, for the same period of last year.

Six Months Ended September 30, 2020 Financial Results

Revenue

Revenue for the six months ended September 30, 2020 increased by $8.26 million, or 15.4%, to $61.90 million from $53.63 million for the same period of last year. The increase in revenue was primarily due to the increase in retail drugstores, online pharmacy and wholesale business.



For the Six Months Ended September 30,



2020


2019

($ millions)


Revenue


Cost of
Goods


Gross
Margin


Revenue


Cost of
Goods


Gross
Margin

Retail drugstores


36.74


24.73


32.7%


34.74


24.15


30.5%

Online pharmacy


10.26


8.97


12.5%


4.79


4.13


13.9%

Wholesale


14.90


13.20


11.4%


14.10


12.60


10.7%

Total


61.90


46.90


24.2%


53.63


40.88


23.8%

Revenue from the retail drugstores business increased by $2.00 million, or 5.8%, to $36.74 million for the six months ended September 30, 2020 from $34.74 million for the same period of last year. The increase was primarily attributable to consumer-facing benefits such as emphasis on onsite medical care, chronic disease management services, incremental Direct-to-Patient ("DTP") business caused by continuous hospital medical reform, partially offset by the decline in sale reimbursed by NHSA in the second quarter of fiscal 2021, and maturing of stores opened a year ago.

Revenue from the online pharmacy business increased by $5.47 million, or 114.0%, to $10.26 million for the six months ended September 30, 2020 from $4.79 million for the same period of last year. The increase was primarily caused by an increase in sales of prescription drugs via e-commerce platforms such as Tmall. Due to the same reason discussed above, the sale of prescription drugs was $3.63 million in the six months ended September 30, 2020 as compared to none in the six month ended September 30, 2019. Additionally, the Company maintained a membership care program targeted at customers with chronic disease. The Company has closely interacted with its members via WeChat by providing healthcare knowledge and reminding them to refill medicine. By implementing a personalized customer care program, the Company was able to promote its sales.

Revenue from the wholesale business increased by $0.80 million, or 5.6%, to $14.90 million for the six months ended September 30, 2020 from $14.10 million for the same period of last year. The increase was primarily a result of the Company's ability to resell certain products, which the Company sold in large quantities at its retail stores, to other vendors at competitive prices.

Gross profit and gross margin

Total cost of goods sold increased by $6.02 million, or 14.7%, to $46.90 million for the six months ended September 30, 2020 from $40.88 million for the same period of last year. Gross profit increased by $2.24 million, or 17.5%, to $14.99 million for the six months ended September 30, 2020 from $12.75 million for the same period of last year. Overall gross margin increased by 0.4 percentage points to 24.2% for the six months ended September 30, 2020, from 23.8% for the same period of last year.

Gross margins for retail drugstores, online pharmacy and wholesale were 32.7%, 12.5%, and 11.4%, respectively, for the six months ended September 30, 2020. This compared to gross margins for retail drugstores, online pharmacy and wholesale of 30.5%, 13.9%, and 10.7%, respectively, for the same period of last year.

Loss from operations

Selling and marketing expenses increased by $0.30 million, or 2.4%, to $12.75 million for the six months ended September 30, 2020 from $12.45 million for the same period of last year. The increase in selling and marketing expenses was primarily due to increase in fee charged by various platforms as a result of sale increase in the Company's online pharmacy.

General and administrative expenses decreased by $0.50 million, or 10.6%, to $4.18 million for the six months ended September 30, 2020 from $4.68 million for the same period of last year. In the six months ended September 30, 2020, the Company reversed bad debt allowance of $286,076 as compared to an increase in bad debt allowance of $767,249 in the same period of last year. Excluding such an effect, the general and administrative expenses increased by $559,503 period over period, which reflects the increases in staff and administration expense as the Company's online business grew. 

Loss from operations was $1.94 million for the six months ended September 30, 2020, compared to $4.38 million for the same period of last year. Operating margin was (3.1)% and (8.2)% for the six months ended September 30, 2020 and 2019 respectively .

Net loss

Net loss was $1.92 million, or $0.05 per basic and diluted share for the six months ended September 30, 2020, compared to net loss of $3.73 million, or $0.10 per basic and diluted share for the same period of last year.

Financial Condition

As of September 30, 2020, the Company had cash of $21.65 million, compared to $16.18 million as of March 31, 2020. Net cash used in operating activities was $0.35 million for the six months ended September 30, 2020, compared to net cash provided by operating activities of $0.97 million for the same period of last year. Net cash used in investing activities was $1.76 million for the six months ended September 30, 2020, compared to $1.45 million for the same period of last year. Net cash provided by financing activities was $4.55 million for the six months ended September 30, 2020, compared to $6.38 million for the same period of last 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 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
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

CONDENSED CONSOLIDATED BALANCE SHEETS

(UNAUDITED)




September 30,



March 31,




2020



2020


ASSETS







CURRENT ASSETS







Cash and cash equivalents


$

21,646,487



$

16,176,318


Restricted cash



13,722,479




14,806,288


Financial assets available for sale



163,818




157,159


Notes receivable



73,494




57,005


Trade accounts receivable



9,992,142




9,770,656


Inventories



13,227,559




12,247,004


Other receivables, net



5,225,418




5,069,442


Advances to suppliers



1,929,273




1,174,800


Other current assets



1,833,208




1,528,540


Total current assets



67,813,878




60,987,212











PROPERTY AND EQUIPMENT, net



6,768,478




7,633,740











OTHER ASSETS









Long-term investment



4,115,839




2,544,451


Farmland assets



789,638




742,347


Long term deposits



1,533,640




1,456,384


Other noncurrent assets



1,077,100




1,046,763


Operating lease right-of-use assets



19,946,821




21,711,376


Intangible assets, net



3,440,046




3,393,960


Total other assets



30,903,084




30,895,281











Total assets


$

105,485,440



$

99,516,233











LIABILITIES AND STOCKHOLDERS' EQUITY









CURRENT LIABILITIES









Short-term bank loan


$

2,204,820




1,410,130


Accounts payable, trade



24,904,087




21,559,494


Notes payable



23,327,972




26,605,971


Other payables



1,888,563




2,522,330


Other payables - related parties



574,103




490,218


Customer deposits



1,262,520




708,140


Taxes payable



245,203




119,247


Accrued liabilities



653,409




753,612


Long-term loan payable-current portion



2,375,729




2,287,742


Current portion of operating lease liabilities



1,056,181




981,090


Total current liabilities



58,492,587




57,437,974











Long-term loan payable



3,089,373




4,115,958


Long-term operating lease liabilities



16,500,499




19,049,575


Employee Deposits



14,699




70,507


Purchase option and warrants liability



36,306




64,090


Total liabilities



78,133,464




80,738,104











COMMITMENTS AND CONTINGENCIES


















STOCKHOLDERS' EQUITY









Common stock; $0.001 par value; 250,000,000 shares authorized; 37,961,790 and
     32,936,786 shares issued and outstanding as of September 30, 2020 and March
     31, 2020, respectively



37,962




32,937


Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and
     outstanding as of September 30 and March 31, 2020, respectively



-




-


Additional paid-in capital



63,568,876




54,209,301


Statutory reserves



1,309,109




1,309,109


Accumulated deficit



(38,126,065)




(36,400,837)


Accumulated other comprehensive income



2,565,454




1,440,424


Total stockholders' equity



29,355,336




20,590,934


Noncontrolling interests



(2,003,360)




(1,812,805)


Total equity



27,351,976




18,778,129


Total liabilities and stockholders' equity


$

105,485,440



$

99,516,233


 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)




For the three months ended
September 30,



For the six months ended
September 30,




2020



2019



2020



2019















REVENUES, NET


$

30,842,545



$

28,353,779



$

61,896,857



$

53,634,563



















COST OF GOODS SOLD



23,829,793




21,660,415




46,903,886




40,879,761



















GROSS PROFIT



7,012,752




6,693,364




14,992,971




12,754,802



















SELLING EXPENSES



6,475,512




6,485,848




12,747,919




12,454,399


GENERAL AND ADMINISTRATIVE EXPENSES



2,061,559




1,823,935




4,181,725




4,675,547


TOTAL OPERATING EXPENSES



8,537,071




8,309,783




16,929,644




17,129,946



















LOSS FROM OPERATIONS



(1,524,319)




(1,616,419)




(1,936,673)




(4,375,144)



















OTHER INCOME (EXPENSE):

















INTEREST INCOME



187,667




340,514




351,255




388,387


INTEREST EXPENSE



(117,692)




-




(245,079)




-


OTHER



(124,496)




(72,225)




(74,475)




(134,710)


CHANGE IN FAIR VALUE OF DERIVATIVE
LIABILITIES



32,674




6,865




27,784




410,420



















LOSS BEFORE INCOME TAXES



(1,546,166)




(1,341,265)




(1,877,188)




(3,711,047)



















PROVISION FOR INCOME TAXES



(18,975)




5,702




38,595




14,090



















NET LOSS



(1,527,191)




(1,346,967)




(1,915,783)




(3,725,137)



















LESS: NET LOSS ATTRIBUTABLE TO
   NONCONTROLLING INTEREST



(33,472)




(122,004)




(190,555)




(365,223)



















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



(1,493,719)




(1,224,963)




(1,725,228)




(3,359,914)



















Foreign currency translation adjustments



1,031,461




(536,335)




1,125,030




(941,573)



















COMPREHENSIVE LOSS


$

(495,730)



$

(1,883,302)



$

(790,753)



$

(4,666,710)



















WEIGHTED AVERAGE NUMBER OF SHARES:

















Basic



37,961,790




32,936,786




36,232,144




32,696,348


Diluted



37,961,790




32,936,786




36,232,144




32,696,348



















EARNINGS PER SHARES:

















Basic


$

(0.04)



$

(0.04)



$

(0.05)



$

(0.10)


Diluted


$

(0.04)



$

(0.04)



$

(0.05)



$

(0.10)


 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)




For the six months ended
September 30,




2020



2019


CASH FLOWS FROM OPERATING ACTIVITIES:







Net loss


$

(1,915,783)



$

(3,725,137)


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









Bad debt direct write-off and provision



(286,076)




767,250


Depreciation and amortization



1,258,156




1,051,907


Stock based compensation



-




34,560


Change in fair value of purchase option derivative liability



(27,784)




(410,420)


Changes in operating assets and liabilities:









Accounts receivable, trade



41,724




555,289


Notes receivable



(13,675)




92,655


Inventories and biological assets



(448,573)




975,170


Other receivables



279,650




(206,247)


Advances to suppliers



(531,255)




(106,790)


Other current assets



(853,289)




(1,031,185)


Long term deposit



(15,106)




682,504


Other noncurrent assets



13,619




13,791


Accounts payable, trade



2,362,338




1,938,015


Other payables and accrued liabilities



(845,411)




(568,457)


Customer deposits



509,549




744,912


Taxes payable



123,082




165,692











Net cash used in/provided by operating activities



(348,834)




973,509











CASH FLOWS FROM INVESTING ACTIVITIES:









Disposal of financial assets available for sale



-




14,457


Acquisition of equipment



(33,968)




(374,992)


Purchases of intangible assets



(55,038)




(462,266)


Investment in a joint venture



(1,422,193)




-


Additions to leasehold improvements



(246,846)




(622,464)


Net cash used in investing activities



(1,758,045)




(1,445,265)











CASH FLOWS FROM FINANCING ACTIVITIES:









Proceeds from short-term bank loan



714,160




682,692


Repayment of  third parties' loan



(1,175,725)




-


Proceeds from notes payable



22,668,388




21,745,277


Repayment of notes payable



(26,949,176)




(24,862,363)


Decrease in Employee Deposits



(57,133)




-


Exercise of warrants



77,500




-


Proceeds from equity financing



9,205,173




9,273,077


Repayment of other payables-related parties



68,994




(458,002)


Net cash provided by financing activities



4,552,181




6,380,681











EFFECT OF EXCHANGE RATE ON CASH



1,941,058




(1,368,958)











INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH



4,386,360




4,539,967











CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period



30,982,606




24,745,202











CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, end of period


$

35,368,966



$

29,285,169











SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:









    Cash paid for interest



247,371




-


Cash paid for income taxes


$

3,457



$

28,777


 

Cision View original content:http://www.prnewswire.com/news-releases/china-jo-jo-drugstores-reports-second-quarter-2021-financial-results-301172701.html

SOURCE China Jo-Jo Drugstores, Inc.