BOQI International Medical Inc. Announces Second Quarter 2020 Financial Results, Revenue increased by 1026% Over the Same Period Last Year

Rhea-AI Summary

BOQI International Medical Inc. (NASDAQ: BIMI) reported significant financial results for Q2 2020, with total revenues soaring by 1026% year-over-year to $3,790,847. Gross profit margin improved to 22.77% from 4.35% in Q2 2019, while net income increased by 629% to $4,673,854, marking a turnaround from a net loss in 2019. The results were positively impacted by the acquisition of Guanzan Group, contributing to revenues in medical devices and medicine. Operating expenses rose significantly, reflecting increased business activity and compliance costs, but overall liquidity improved.

Positive

• 1026% revenue increase year-over-year in Q2 2020.
• Gross profit margin improved to 22.77% from 4.35% in Q2 2019.
• Net income reached $4,673,854 compared to a net loss of $883,245 in Q2 2019.
• Acquisition of Guanzan Group positioned for future growth.

Negative

• Operating expenses surged by 302% to $2,922,868 in Q2 2020.
• Negative working capital of $0.59 million as of June 30, 2020.

NEW YORK, Oct. 19, 2020 (GLOBE NEWSWIRE) -- BOQI International Medical Inc. (NASDAQ: BIMI) (“BIMI” or the “Company”) today announced its financial results for the second quarter and six months ended June 30, 2020.

Second Quarter 2020 Financial Highlights:

• Total revenues increased by 1026 % in the three months ended June 30, 2020 compared to the three months ended June 30, 2019.
• Gross profit margin increased to 22.77% during the three months ended June 30, 2020 compared to 4.35% for the three months ended June 30, 2019.
• Net income increased by 629% in the three months ended June 30, 2020 compared to the three months ended June 30, 2019.

“We are pleased with our results in the second quarter and the concerted efforts of our team across our wholesale business in medical devices and medicine,” said Mr. Tiewei Song, Chief Executive Officer and President of BOQI International Medical Inc. “We acquired Guanzan Group this year, which allows us to better align with the current environment and positions us for future growth. As more healthcare facilities re-opened for business and resumed patient treatment in the second half of the year, we believe our products can meet the expected rising customer demand, meanwhile bring benefit to our shareholders.”

Revenues     

Revenues for the three months ended June 30, 2020 and 2019 were $3,790,847 and $336,690, respectively. The Company’s revenues for the three months ended June 30, 2020 were principally attributable to the newly acquired Guanzan Group’s wholesale sales of medical devices and generic drugs. The Company’s revenues for the three months ended June 30, 2019 were attributable to the sales of products manufactured by the NF Group and from energy saving technical services and product collaboration processing services performed by the NF Group, which the Company sold in June 2020. Revenues from the wholesale medical devices segment and the wholesale medicine segment for the three months ended June 30, 2020 were $2,059,189 and $1,730,175, respectively. During the second quarter of 2020, the Guanzan Group benefitted from the recovery from COVID-19 in the PRC.

Revenues for the six months ended June 30, 2020 and 2019 were $4,226,378 and $912,402, respectively. The 363% increase in revenues is attributable to the acquisition of the Guanzan Group in late March 2020. Revenues from the wholesale medicine segment for the six months ended June 30, 2020 were $2,307,311 and revenues from the wholesale medical device segment for the six months ended June 30, 2020 were $1,896,733. The Company’s revenue for the six months ended June 30, 2019 were attributable to the sales of products manufactured by the NF Group and from energy saving technical services and product collaboration processing services performed by the NF Group.

Cost of Revenues  

Cost of revenues for the three months ended June 30, 2020 and 2019 were $2,941,955 and $319,172, respectively, reflecting the impact of the acquisition of the Guanzan Group. Cost of revenues for the three months ended June 30, 2019 consisted primarily of material costs, direct labor, depreciation, and manufacturing overhead, which were directly attributable to the manufacturing of products and the rendering of services by the NF Group.

Cost of revenues for the six months ended June 30, 2020 and 2019 were $3,407,169 and $749,848, respectively. Cost of revenues for the six months ended June 30, 2019 were attributable to the manufacturing of products and the rendering of services by the NF Group.

Gross Profit

For the three months ended June 30, 2020, the Company had a gross profit margin of 22.77% compared with a gross profit margin of 4.35% in the quarter ended June 30, 2019. The improvement in the gross profit margin in the three months ended June 30, 2020 is mainly due to the inclusion of a full quarter of revenues from the wholesale medical devices and wholesale medicine segments. The gross profit margin of the wholesale medical devices and wholesale medicine segments for three months ended June 30, 2020 were 23.22% and 25.56%, respectively. The gross profit for the Company in the three months ended June 30, 2019 was related to the operations of the NF Group. For the six months ended June 30, 2020, the Company had a gross profit margin of 19.38% compared with a gross profit margin of 17.82% in the first six months of 2019. The improvement in the gross profit margin in the six months ended June 30, 2020 is mainly due to the inclusion of the revenues from the wholesale medical devices and wholesale medicine segments since the acquisition in March 2020. The gross profit margin of the wholesale medical devices and wholesale medicine segments for six months ended June 30, 2020 were 22.78% and 25.16%, respectively. The gross profit for the Company in the six months ended June 30, 2019 was related to the operations of the NF Group.

Operating Expenses    

Operating expenses were $2,922,868 for the three months ended June 30, 2020 compared to $726,940 for the same period in 2019, an increase of $2,195,928. The increase is mainly due to the additional amortization of the discounted convertible notes, meeting and promotional expenses, pharmaceutical and medical device industry compliance management expenses and professional expenses. The Company’s operating expenses for the three months ended June 30, 2019 consisted primarily of general and administrative expenses, and selling and marketing expenses of the NF Group.

Operating expenses were $4,893,723 for the six months ended June 30, 2020 compared to $1,248,456 for the same period in 2019, an increase of $3,645,267, or 292%. The Company’s operating expenses for the six months ended June 30, 2019 consisted primarily of general and administrative expenses, and selling and marketing expenses of the NF Group.

Other Income

For the three months ended June 30, 2020, the Company reported other income of $6,986,587 and other interest expense of $195,486. For the six months ended June 30, 2020, the Company reported other income of $6,944,469 and other interest expense of $377,466.  Other income in both periods includes the gain generated from the disposal of the NF Group. Other expense in both periods consisted of interest expense.

Net Profit

For the three months ended June 30, 2020, the Company reported a net profit of $4,673,854 compared to a net loss of $883,245 for the same period of 2019. For the six months ended June 30, 2020 the Company reported a net profit of $2,471,663 compared to a net loss of $1,425,693 for the same period of 2019. The net profit in both periods is attributable to the gain generated from the disposal of the NF Group.

Liquidity and Capital Resources

At June 30, 2020, the Company had cash of $109,402 and negative working capital of $0.59 million as compared to cash of $36,674 and negative working capital of $500,765 at December 31, 2019.

About BOQI International Medical Inc.

BOQI International Medical Inc. (formerly known as NF Energy Saving Corporation) (NASDAQ: BIMI) was founded in 2006. In February 2019, the Board of Directors of the company was reorganized with a focus on the health industry. The Company is now exclusively a healthcare products provider, offering a broad range of healthcare products and related services. For more information about BOQI International Medical, please visit www.usbimi.com.

Safe Harbor Statement

Certain matters discussed in this news release are forward-looking statements that involve a number of risks and uncertainties including, but not limited to, the Company’s ability to achieve profitable operations, its ability to continue to operate as a going concern, its ability to continue to meet NASDAQ continued listing requirements, the effects of the spread of the Coronavirus (COVID-19), the demand for the Company’s products and the Company’s customers’ economic condition,  risk of operations in the People’s Republic of China, general economic conditions and other risk factors detailed in the Company’s annual report and other filings with the United States Securities and Exchange Commission. Investors are urged to read the Company’s Quarterly Report on Form 10-Q for the three months ended March 31, 2020 for further information about the Company’s financial results, liquidity and capital resources.

IR Contact:

Dragon Gate Investment Partners LLC
Tel: +1(646)-801-2803
Email: BIMI@dgipl.com

BOQI INTERNATIONAL MEDICAL, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

		June 30,				December 31,
		2020				2019
		(Unaudited)
ASSETS
CURRENT ASSETS
Cash		$	96,312			$	36,363
Restricted cash			13,090				311
Accounts receivable, net			3,118,402				24,840
Advances to suppliers			2,197,249				1,252
Amount due from related parties			49,776				1,350
Inventories, net			2,523,075				707,526
Prepayments and other receivables			14,407,373				59,333
Assets from discontinued operations			-				21,218,983
Total current assets			22,405,277				22,049,958
NON-CURRENT ASSETS
Deferred tax assets			244,351				-
Property, plant and equipment, net			756,712				38,641
Intangible assets, net			7,458,486				7,973,179
Goodwill			6,443,170				-
Total non-current assets			14,902,719				8,011,820
TOTAL ASSETS		$	37,307,996			$	30,061,778
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Short-term loans		$	834,028			$	-
Long-term loans due within one year			219,554				-
Convertible promissory notes, net			3,852,890				107,383
Derivative liability			1,329,842				1,272,871
Accounts payable, trade			3,757,567				641,927
Advances from customers			828,939				67,975
Amount due to related parties			649,059				305,760
Taxes payable			317,010				861
Other payables and accrued liabilities			11,208,548				6,044,378
Liabilities from discontinued operations			-				13,108,038
Total current liabilities			22,997,437				21,549,193
Long-term loans - noncurrent portion			163,920				-
TOTAL LIABILITIES			23,161,357				21,549,193
COMMITMENTS AND CONTINGENCIES
EQUITY
Common stock, $0.001 par value; 50,000,000 shares authorized; 10,384,433 and 9,073,289 shares issued and outstanding as of March 31, 2020 and December 31, 2019, respectively			10,384				9,073
Additional paid-in capital			22,626,434				15,643,825
Statutory reserves			-				2,227,634
Accumulated deficit			(8,436,279	)			(10,881,667	)
Accumulated other comprehensive income (loss)			(128,737	)			1,683,770
Total BOQI International Medical Inc.’s equity			14,071,802				8,682,635
NON-CONTROLLING INTERESTS			74,837				(170,050	)
Total equity			14,146,639				8,512,585
Total liabilities and equity		$	37,307,996			$	30,061,778

BOQI INTERNATIONAL MEDICAL, INC. AND ITS SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (GAIN)/LOSS
(UNAUDITED)

		For the Three Months Ended June 30,								For the Six Months Ended June 30,
		2020				2019				2020				2019
REVENUES			3,790,847				336,690				4,226,378				912,402
COST OF REVENUES			2,941,955				319,172				3,407,169				749,848
GROSS PROFIT			848,892				14,518				819,209				162,554
OPERATING EXPENSES:
Sales and marketing			531,923				48,851				650,769				86,724
General and administrative			2,390,945				678,089				4,242,954				1,161,732
Total operating expenses			2,922,868				726,940				4,893,723				1,248,456
LOSS FROM OPERATIONS			(2,073,976	)			(712,422	)			(4,074,514	)			(1,085,902	)
OTHER INCOME (EXPENSE)
Interest expense			(195,486	)			(173,526	)			(377,446	)			(292,094	)
Other income (expense)			6,986,587				2,703				6,968,162				(47,697	)
Total other income (expense), net			6,791,101				(170,823	)			6,590,716				(339,791	)
INCOME (LOSS) BEFORE INCOME TAXES			4,717,125				(883,245	)			2,516,202				(1,425,693	)
PROVISION FOR INCOME TAXES			43,271				—				44,539				—
NET INCOME (LOSS)			4,673,854				(883,245	)			2,471,663				(1,425,693	)
Less: net income (loss) attributable to  non-controlling interest			33,590				(21,149	)			26,274				3,997
NET INCOME (LOSS) ATTRIBUTE TO BOQI INTERATIONAL MEDICAL INC.		$	4,640,264			$	(862,096	)		$	2,445,389			$	(1,429,690	)
OTHER COMPREHENSIVE INCOME(LOSS)
Foreign currency translation adjustment			263,239				(205,602	)			143,038				26,325
TOTAL COMPREHENSIVE INCOME(LOSS)			4,937,093				(1,088,847	)			2,614,701				(1,339,368	)
Less: comprehensive income (loss) attributable to non-controlling interests			2,334				(8,831	)			(2,601	)			4,546
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO BOQI INTERNATIONAL MEDICAL INC.		$	4,934,759			$	(1,080,016	)		$	2,617,302			$	(1,403,914	)
WEIGHTED AVERAGE NUMBER OF COMMON SHARES
Basic and diluted			10,203,861				7,831,531				9,728,861				7,703,123
INCOME (LOSS) PER SHARE
Basic and diluted		$	0.46			$	(0.11	)		$	0.25			$	(0.19	)

BOQI INTERNATIONAL MEDICAL, INC. AND ITS SUBSIDIARIES
(CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

		For the Six Months Ended June 30,
		2020				2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss )		$	2,471,663			$	(1,425,693	)
Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization			512,460				497,476
(Profit) on disposal of NF Group			(6,944,469	)			-
Allowance for doubtful accounts			79,061				157,310
Amortization of discount of convertible promissory notes			1,075,171				-
Change in derivative liabilities			107,340				-
Impairment loss from construction in progress			-				25,071
Allowance for inventory provision			187,942				-
Change in operating assets and liabilities
Accounts receivable			(1,301,929	)			942,687
Advances to suppliers			(958,804	)			-
Inventories			(1,012,881	)			(214,739	)
Prepayments and other receivables			930,314				(74,919	)
Accounts payable, trade			1,760,102				(318,384	)
Advances from customers			(602,416	)
Taxes payable			(80,818	)			19,339
Other payables and accrued liabilities			347,751				365,443
Net cash provided by (used in) operating activities			(3,429,513	)			(26,409	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash received from acquisition of Guanzan Group			95,220				-
Net cash provided by investing activities			95,220				-
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock							126,841
Net proceeds from issuance of convertible promissory notes			3,457,325				-
Proceeds from short-term loans							5,899,009
Repayment of short-term loans			(34,100	)			(5,900,484	)
Repayment of long-term loans			(21,497	)
Amount financed by related parties			598,803
Net cash provided by financing activities			4,000,531				125,366
EFFECT OF EXCHANGE RATE ON CASH			(593,510	)			20,569
INCREASE IN CASH			72,728				78,388
CASH AND CASH EQUIVALENTS, beginning of period			36,674				197,356
CASH AND CASH EQUIVALENTS, end of period		$	109,402			$	275,744
SUPPLEMENTAL CASH FLOW INFORMATION:
Cash paid for income tax		$	56,396			$	-
Cash paid for interest expense, net of capitalized interest		$	34,902			$	284,092
NON-CASH TRANSACTIONS OF INVESTING AND FINANCING ACTIVITIES
Issuance of common shares for the equity acquisition of Chongqing Guanzan Technology Co., Ltd.		$	2,717,000			$	-
Goodwill recognized from the equity acquisition of the Boqi Group		$	6,443,170			$	-
Outstanding payment for the equity acquisition of Chongqing Guanzan Technology Co., Ltd.		$	4,414,119			$	-
Outstanding receivable for disposal of NF Group		$	10,000,000			$	-
Issuance of common shares upon conversion of convertible notes		$	1,008,067			$	-

 

FAQ

What were BOQI International Medical's revenues for Q2 2020?

BOQI International Medical reported revenues of $3,790,847 for Q2 2020.

How much did BOQI International Medical's net income increase in Q2 2020?

Net income increased by 629% to $4,673,854 in Q2 2020.

What led to the significant revenue growth for BOQI International Medical?

The significant revenue growth was mainly due to the acquisition of Guanzan Group and the recovery from COVID-19.

How did BOQI International Medical's gross profit margin change in Q2 2020?

The gross profit margin improved to 22.77% in Q2 2020 from 4.35% in Q2 2019.

What were the operating expenses for BOQI International Medical in Q2 2020?

Operating expenses increased to $2,922,868 in Q2 2020, up from $726,940 in Q2 2019.