HANGZHOU, China, June 29, 2018 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (NASDAQ: 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.


Source: China Jo-Jo Drugstores, Inc.