HANGZHOU, China, Aug. 15, 2016 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (NASDAQ: CJJD)
today announced financial results for its first fiscal quarter
ended June 30, 2016.
FY 2017 First Quarter Highlights:
- Revenue was $20.9 million
compared to $21.3 million a year
ago
- Gross profit increased 2.4% year-over-year to $4.5 million
- Gross margin increased 90bps year-over-year to 21.4%, retail
pharmacy gross margin increased 280 bps to 28.5% from a year
ago
- GAAP net income was $131,153 or
$0.01 per diluted share compared to
net income of $110,611 or
$0.01 per diluted share a year
ago
- Adjusted net income was $754,000
or $0.04 per diluted share compared
to adjusted net income of $277,481 or
$0.02 per diluted share a year
ago
China Jo-Jo's Chairman and CEO,
Mr. Liu Lei commented, "Our results
in the first quarter were temporarily impacted by lower pharmacy
traffic due to preparation for the G20 summit in Hangzhou, and the unexpected disruption in the
Yikatong referral business. We are proactively seeking referral
arrangement with alternative providers of Pharmacy Benefit
Management. We remain focused on increasing our gross margin and
expanding the online and offline integration of our wellness
offerings."
Net revenues for the quarter were $20.9
million compared to $21.3
million in the same quarter a year ago, a decrease of
$375, 377 or 1.8%. Retail drugstores
sales were $12.7 million and
increased 4.4% compared to the prior year period. The Company
continues to launch in-pharmacy virtual doctor clinics, provide
access to mobile payment and implement other operational strategies
to promote same store growth. The pharmacy store count increased to
61 as of June 30, 2016, compared to
59 stores a year ago.
Online pharmacy sales for the quarter were $5.1 million compared to $6.0 million in the same quarter a year ago, a
decrease of $894,689 or 15.0%. The
decrease was mainly due to the decline in referral transactions
from Yikatong on the Company's own online pharmacy website.
Excluding the RMB depreciation, sales via e-commerce platforms
increased by 6.0% year over year. The Company is proactively
seeking referral arrangements with alternative providers of
Pharmacy Benefit Management.
Net income was $131,153 or
$0.01 per diluted share compared to
last year's first quarter net income of $110,611 or $0.01
per diluted share.
Adjusted net income was $754,000
or $0.04 per diluted share compared
to last year's first quarter adjusted net income of $277,481 million or $0.02 per diluted share.
About China Jo-Jo Drugstores,
Inc.
China Jo-Jo Drugstores, Inc., is
a leading China-based pharmacy with retail, wholesale and online
distribution of pharmaceutical and health care products through its
online and retail pharmacies. As of July 26,
2016, the Company had 62 retail pharmacies in Zhejiang Province. The Company's wholesale
subsidiary supplies its retail stores, and distributes drug and
healthcare products to other drugstores and drug vendors. For more
information, please visit: www.jiuzhou-drugstore.com (Chinese) and
www.chinajojodrugstores.com (English).
Forward Looking Statement
Statements in this press release regarding the Company that are
not historical facts are forward-looking statements and are subject
to risks and uncertainties that could cause actual future events or
results to differ materially from such statements. Any such
forward-looking statements, including, but not limited to,
financial guidance, are made pursuant to the safe harbor provisions
of the Private Securities Litigation Reform Act of 1995. These
statements can be identified by the use of forward-looking
terminology such as "believe," "expect," "estimate," "may," "will,"
"should," "project," "plan," "seek," "intend," "anticipate," the
negatives thereof, or comparable terminology. Such statements
typically involve risks and uncertainties and may include financial
projections or information regarding the progress of new product
development. It is routine for the Company's internal projections
and expectations to change as the quarter and year progresses, and
therefore it should be clearly understood that the internal
projections and beliefs upon which the Company bases its
expectations may change. Although these expectations may change,
the Company is under no obligation to inform you if they do. Actual
results could differ materially from the expectations reflected in
such forward-looking statements as a result of numerous factors,
including the risks associated with the effect of changing economic
conditions in the People's Republic of
China, variations in cash flow, reliance on collaborative
retail partners and on new product development, variations in new
product development, risks associated with rapid technological
change, and the potential of introduced or undetected flaws and
defects in products. Readers are referred to the reports and
documents filed from time to time by the Company with the
Securities and Exchange Commission for a discussion of these and
other important risk factors that could cause actual results to
differ from those discussed in forward-looking statements. Other
than as required under the securities laws, the Company does not
assume a duty to update these forward-looking statements.
CHINA JO-JO
DRUGSTORES, INC AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
|
|
|
|
|
|
|
|
|
|
June 30,
|
|
|
March 31,
|
|
|
|
2016
|
|
|
2016
|
|
ASSETS
|
|
|
|
|
|
|
|
|
CURRENT
ASSETS
|
|
|
|
|
|
|
|
|
Cash
|
|
$
|
5,058,091
|
|
|
$
|
6,671,873
|
|
Financial assets available for sale
|
|
|
451,512
|
|
|
|
465,165
|
|
Restricted
cash
|
|
|
6,510,454
|
|
|
|
13,747,990
|
|
Notes
receivable
|
|
|
54,622
|
|
|
|
15,506
|
|
Trade accounts
receivable, net
|
|
|
8,861,884
|
|
|
|
8,054,597
|
|
Inventories
|
|
|
10,732,441
|
|
|
|
10,802,691
|
|
Other receivables,
net
|
|
|
1,769,878
|
|
|
|
1,376,468
|
|
Advances to
suppliers, net
|
|
|
4,691,995
|
|
|
|
4,230,665
|
|
Other current
assets
|
|
|
1,881,243
|
|
|
|
1,518,048
|
|
Total current
assets
|
|
|
40,012,120
|
|
|
|
46,883,003
|
|
|
|
|
|
|
|
|
|
|
PROPERTY AND
EQUIPMENT, net
|
|
|
5,180,714
|
|
|
|
5,543,076
|
|
|
|
|
|
|
|
|
|
|
OTHER
ASSETS
|
|
|
|
|
|
|
|
|
Long-term
investment
|
|
|
105,353
|
|
|
|
108,539
|
|
Farmland
assets
|
|
|
1,636,757
|
|
|
|
1,562,205
|
|
Long term
deposits
|
|
|
2,380,086
|
|
|
|
2,452,056
|
|
Other noncurrent
assets
|
|
|
2,871,139
|
|
|
|
2,595,129
|
|
Intangible assets,
net
|
|
|
2,835,454
|
|
|
|
2,928,779
|
|
Total other
assets
|
|
|
9,828,788
|
|
|
|
9,646,708
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
|
$
|
55,021,622
|
|
|
$
|
62,072,787
|
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
CURRENT
LIABILITIES
|
|
|
|
|
|
|
|
|
Short-term loan
payable
|
|
$
|
30,101
|
|
|
$
|
31,011
|
|
Accounts payable,
trade
|
|
|
15,509,963
|
|
|
|
16,667,396
|
|
Notes
payable
|
|
|
11,573,880
|
|
|
|
17,595,634
|
|
Other
payables
|
|
|
1,892,969
|
|
|
|
1,917,821
|
|
Other payables -
related parties
|
|
|
2,216,223
|
|
|
|
2,199,775
|
|
Customer
deposits
|
|
|
2,695,112
|
|
|
|
2,610,151
|
|
Taxes
payable
|
|
|
430,162
|
|
|
|
483,770
|
|
Accrued
liabilities
|
|
|
520,689
|
|
|
|
615,056
|
|
Warrant
liability-current portion
|
|
|
106,970
|
|
|
|
-
|
|
Total current
liabilities
|
|
|
34,976,069
|
|
|
|
42,120,614
|
|
|
|
|
|
|
|
|
|
|
Warrant
liability
|
|
|
561,527
|
|
|
|
636,301
|
|
Total
liabilities
|
|
|
35,537,596
|
|
|
|
42,756,915
|
|
|
|
|
|
|
|
|
|
|
STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
|
|
Common stock; $0.001
par value; 250,000,000 shares authorized; 19,373,504 and
17,735,504 shares issued and outstanding as of June 30,
2016 and March 31, 2016
|
|
|
19,374
|
|
|
|
17,736
|
|
Additional paid-in
capital
|
|
|
22,677,280
|
|
|
|
22,088,267
|
|
Statutory
reserves
|
|
|
1,309,109
|
|
|
|
1,309,109
|
|
Accumulated
deficit
|
|
|
(7,494,419)
|
|
|
|
(6,957,053)
|
|
Accumulated other
comprehensive income
|
|
|
2,972,682
|
|
|
|
2,857,813
|
|
Total stockholders'
equity
|
|
|
19,484,026
|
|
|
|
19,315,872
|
|
|
|
|
|
|
|
|
|
|
Total liabilities and
stockholders' equity
|
|
$
|
55,021,622
|
|
|
$
|
62,072,787
|
|
CHINA JO-JO
DRUGSTORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE
INCOME
(UNAUDITED)
|
|
|
For the three months
ended
June 30,
|
|
|
2016
|
|
2015
|
REVENUES,
NET
|
|
$
|
20,935,915
|
|
|
$
|
21,311,292
|
|
|
|
|
|
|
|
|
|
|
COST OF GOODS
SOLD
|
|
|
16,454,111
|
|
|
|
16,935,609
|
|
|
|
|
|
|
|
|
|
|
GROSS
PROFIT
|
|
|
4,481,804
|
|
|
|
4,375,683
|
|
|
|
|
|
|
|
|
|
|
SELLING
EXPENSES
|
|
|
2,682,721
|
|
|
|
3,096,369
|
|
GENERAL AND
ADMINISTRATIVE EXPENSES
|
|
|
1,918,482
|
|
|
|
920,230
|
|
TOTAL OPERATING
EXPENSES
|
|
|
4,601,203
|
|
|
|
4,016,599
|
|
|
|
|
|
|
|
|
|
|
INCOME (LOSS) FROM
OPERATIONS
|
|
|
(119,399)
|
|
|
|
359,084
|
|
|
|
|
|
|
|
|
|
|
INTEREST
INCOME
|
|
|
224,422
|
|
|
|
74,997
|
|
INTEREST
EXPENSE
|
|
|
(439)
|
|
|
|
(159,931)
|
|
OTHER INCOME
(EXPENSES), NET
|
|
|
87,199
|
|
|
|
(38,515)
|
|
CHANGE IN FAIR VALUE
OF DERIVATIVE LIABILITIES
|
|
|
(32,196)
|
|
|
|
(42,837)
|
|
|
|
|
|
|
|
|
|
|
INCOME BEFORE INCOME
TAXES
|
|
|
159,587
|
|
|
|
192,798
|
|
|
|
|
|
|
|
|
|
|
PROVISION FOR INCOME
TAXES
|
|
|
28,434
|
|
|
|
82,187
|
|
|
|
|
|
|
|
|
|
|
NET INCOME
|
|
|
131,153
|
|
|
|
110,611
|
|
|
|
|
|
|
|
|
|
|
OTHER COMPREHENSIVE
INCOME
|
|
|
|
|
|
|
|
|
Foreign currency
translation adjustments
|
|
|
114,869
|
|
|
|
86,300
|
|
|
|
|
|
|
|
|
|
|
COMPREHENSIVE
INCOME
|
|
$
|
246,022
|
|
|
$
|
196,911
|
|
|
|
|
|
|
|
|
|
|
WEIGHTED AVERAGE
NUMBER OF SHARES:
|
|
|
|
|
|
|
|
|
Basic
|
|
|
18,239,065
|
|
|
|
15,650,504
|
|
Diluted
|
|
|
18,276,565
|
|
|
|
15,975,583
|
|
|
|
|
|
|
|
|
|
|
EARNINGS PER
SHARES:
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
Diluted
|
|
$
|
0.01
|
|
|
$
|
0.01
|
|
CHINA JO-JO
DRUGSTORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
|
|
|
Three months
ended
June 30,
|
|
|
2016
|
|
2015
|
CASH FLOWS FROM
OPERATING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
131,153
|
|
|
$
|
110,611
|
|
Adjustments to
reconcile net income to net cash (used in) operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
246,499
|
|
|
|
419,806
|
|
Stock
compensation
|
|
|
590,651
|
|
|
|
124,033
|
|
Bad debt direct
write-off and provision
|
|
|
70,736
|
|
|
|
(676,858)
|
|
Change in fair value
of purchase option derivative liability
|
|
|
32,196
|
|
|
|
42,837
|
|
Change in operating
assets:
|
|
|
|
|
|
|
|
|
Accounts receivable,
trade
|
|
|
(1,360,690)
|
|
|
|
1,867,046
|
|
Notes
receivable
|
|
|
(40,252)
|
|
|
|
74,535
|
|
Inventories
|
|
|
(251,067)
|
|
|
|
(1,295,009)
|
|
Other
receivables
|
|
|
(202,805)
|
|
|
|
(2,715)
|
|
Advances to
suppliers
|
|
|
(605,769)
|
|
|
|
(1,040,870)
|
|
Other current
assets
|
|
|
(414,770)
|
|
|
|
421,682
|
|
Other noncurrent
assets
|
|
|
(358,242)
|
|
|
|
-
|
|
Change in operating
liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable,
trade
|
|
|
(679,734)
|
|
|
|
(1,519,464)
|
|
Other payables and
accrued liabilities
|
|
|
(47,600)
|
|
|
|
(352,973)
|
|
Customer
deposits
|
|
|
164,352
|
|
|
|
499,141
|
|
Taxes
payable
|
|
|
(40,087)
|
|
|
|
155,577
|
|
Net cash used in
operating activities
|
|
|
(2,765,429)
|
|
|
|
(1,172,621)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
INVESTING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Purchase of
equipment
|
|
|
(9,372)
|
|
|
|
(99,393)
|
|
Investment to a
joint venture
|
|
|
-
|
|
|
|
(114,660)
|
|
Additions to
leasehold improvements
|
|
|
(26,532)
|
|
|
|
-
|
|
Net cash used in
investing activities
|
|
|
(35,904)
|
|
|
|
(214,053)
|
|
|
|
|
|
|
|
|
|
|
CASH FLOWS FROM
FINANCING ACTIVITIES:
|
|
|
|
|
|
|
|
|
Change in restricted
cash
|
|
|
6,951,672
|
|
|
|
(4,853,800)
|
|
Proceeds from notes
payable
|
|
|
7,768,165
|
|
|
|
13,793,434
|
|
Repayments of notes
payable
|
|
|
(13,368,248)
|
|
|
|
(10,074,912)
|
|
Proceeds from other
payables-related parties
|
|
|
36,662
|
|
|
|
131,872
|
|
Net cash provided by
(used in) financing activities
|
|
|
1,388,251
|
|
|
|
(1,003,406)
|
|
|
|
|
|
|
|
|
|
|
EFFECT OF EXCHANGE
RATE ON CASH
|
|
|
(200,700)
|
|
|
|
21,261
|
|
|
|
|
|
|
|
|
|
|
DECREASE IN
CASH
|
|
|
(1,613,782)
|
|
|
|
(2,368,819)
|
|
|
|
|
|
|
|
|
|
|
CASH, beginning of
period
|
|
|
6,671,873
|
|
|
|
4,023,581
|
|
|
|
|
|
|
|
|
|
|
CASH, end of
period
|
|
$
|
5,058,091
|
|
|
$
|
1,654,762
|
|
|
|
|
|
|
|
|
|
|
SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION:
|
|
|
|
|
|
|
|
|
Cash paid for
interest
|
|
$
|
412
|
|
|
$
|
159,931
|
|
Cash paid for income
taxes
|
|
$
|
17,973
|
|
|
$
|
25,969
|
|
Use of non-GAAP financial measures
To supplement China Jo-Jo's
consolidated financial results presented in accordance with GAAP,
China Jo-Jo uses the following
measures defined as non-GAAP financial measures by the SEC: net
income (loss) excluding share-based compensation expenses and
change in fair value of derivative liabilities, and diluted net
income (loss) per share excluding share-based compensation expenses
and change in the fair value of derivatives liabilities. The
presentation of these non-GAAP financial measures is not intended
to be considered in isolation or as a substitute for the financial
information prepared and presented in accordance with GAAP.
China Jo-Jo believes that these
non-GAAP financial measures provide meaningful supplemental
information regarding its performance and liquidity by excluding
share-based compensation expenses and change in fair value of
derivative liabilities that may not be indicative of its operating
performance from a cash perspective. China
Jo-Jo believes that both management and investors benefit
from referring to these non-GAAP financial measures in assessing
its performance and when planning and forecasting future periods.
These non-GAAP financial measures also facilitate management's
internal comparisons to China
Jo-Jo's historical performance and liquidity. China Jo-Jo computes its non-GAAP financial
measures using the same consistent method from quarter to quarter.
China Jo-Jo believes these non-GAAP
financial measures are useful to investors in allowing for greater
transparency with respect to supplemental information used by
management in its financial and operational decision making. A
limitation of using these non-GAAP measures is that they exclude
share-based compensation and change in fair value of derivative
liabilities charge that has been and will continue to be for the
foreseeable future a significant recurring expense in our business.
Management compensates for these limitations by providing specific
information regarding the GAAP amounts excluded from each non-GAAP
measure. The table under the heading Reconciliation to non-GAAP
Financial Measures in the beginning of the release has more details
on the reconciliations between GAAP financial measures that are
most directly comparable to non-GAAP financial measures.
Reconciliation to non-GAAP Financial Measures
|
Three Months
Ended
June 30
|
|
2016
|
2015
|
Net income
|
$131,153
|
$110,611
|
Non-GAAP
adjustments:
|
|
|
Share based
compensation expense
|
590,651
|
124,033
|
Change in fair value
of derivative liabilities
|
32,196
|
42,837
|
Adjusted net
income
|
754,000
|
277,481
|
Adjusted net income
per share - diluted
|
0.04
|
0.02
|
Investor Relations Contact:
Steve Liu
steve.liu@jojodrugstores.com
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/china-jo-jo-drugstores-reports-fiscal-2017-first-quarter-results-300313259.html
SOURCE China Jo-Jo Drugstores,
Inc.