China Jo-Jo Drugstores Reports First Half of Fiscal Year 2022 Financial Results

Rhea-AI Summary

China Jo-Jo Drugstores (CJJD) reported impressive financial results for the first half of fiscal 2022, ending September 30, 2021. Revenue surged by 26.8% to $78.48 million, driven by robust growth in online pharmacy (33.5%) and wholesale segments (63.6%). The Company notably narrowed its net loss by 86% to $0.27 million, with loss per share improving to $0.01. Despite challenges from COVID-19, CJJD's effective operations and expanding market presence are noteworthy. The Company also received accolades for its ESG initiatives, supporting social and environmental progress.

Positive

• Record revenue of $78.48 million, up 26.8% year-over-year.
• Narrowed net loss to $0.27 million, an improvement of 86%.
• Growth in online pharmacy and wholesale of 33.5% and 63.6%, respectively.
• Increased cash reserves to $24.61 million from $22.05 million year-over-year.

Negative

• Gross margin decreased by 4.6 percentage points to 19.6%.
• Operating loss of $0.49 million, though improved from prior year.

HANGZHOU, China, Jan. 21, 2022 /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 first half of fiscal year 2022 ended September 30, 2021.

Mr. Lei Liu, Chairman and CEO of Jo-Jo Drugstores, commented, "We are pleased to have delivered a solid performance during the first half of fiscal year 2022 as we navigate through a challenging operating environment affected by multiple COVID-19 surges. We achieved record revenue of $78.48 million, up 26.8% from the same period of last year, and narrowed down 86% of net loss compared to the same period of last year. Revenue from online pharmacy and wholesale segments increased by 33.5% and 63.6%, respectively, which reflects the efforts of our team as we continue to expand our business. Our strong financial performance once again demonstrates the continuing momentum across the Company as the market recognizing the quality of our products and the brand awareness of Jo-Jo Drugstores. Our unrivaled quality management, reliable supply chains, extensive distribution network and industry-leading talent team are the reasons of the results."

Mr. Liu continued, "ESG, standing for 'Environment, Society and Governance', is embedded in our core value and we are committed to improving the community we serve and protecting the lives of our employees and customers. We received 2021 China ESG Golden Awards, a Sustainability Award from Sina Finance, which recognizes our meaningful progress in delivering social and environmental benefits. The project "Healthy China 2030" will enhance the reformation and innovation in the healthcare industry. To seize this opportunity, we will continue focusing on providing excellent in-store services, accelerating digital transformation and upgrading our business model. We believe that our capability, operational performance and diversified distribution channels will enable us to generate additional revenue and create greater value for our shareholders in the long term."  

First Six Months of Fiscal Year 2022 Financial Highlights

		For the Six Months Ended September 30,
($ millions, except per share data)		2021		2020		% Change
Revenue		78.48		61.90		26.8%
Retail drugstores		40.42		36.74		10.0%
Online pharmacy		13.70		10.26		33.5%
Wholesale		24.36		14.90		63.6%
Gross profit		15.40		14.99		2.7%
Gross margin		19.6%		24.2%		-4.6 pp*
Loss from operations		(0.49)		(1.94)		74.6%
Net loss		(0.27)		(1.92)		86.0%
Loss per share		(0.01)		(0.05)		80.0%

*Notes: pp represents percentage points

• Revenue increased by 26.8% to $78.48 million for the six months ended September 30, 2021 from $61.90 million for the same period of last year.
• Gross profit increased by 2.7% to $15.40 million for the six months ended September 30, 2021 from $14.99 million for the same period of last year.
• Gross margin decreased by 4.6 percentage points to 19.6% for the six months ended September 30, 2021 from 24.2% for the same period of last year.
• Net loss was $0.27 million, or $0.01 per basic and diluted share, for the six months ended September 30, 2021, compared to net loss of $1.92 million, or $0.05 per basic and diluted share, for the same period of last year.

First Six Months of Fiscal Year 2022 Financial Results

Revenue

Revenue for the six months ended September 30, 2021 increased by $16.58 million, or 26.8%, to $78.48 million from $61.90 million for the same period of last year. The increase in revenue was primarily due to the growth in online pharmacy and wholesale business.

		For the Six Months Ended September 30,
		2021						2020
($ millions)		Revenue		Cost of Goods		Gross Margin		Revenue		Cost of Goods		Gross Margin
Retail drugstores		40.42		28.90		28.5%		36.74		24.73		32.7%
Online pharmacy		13.70		12.29		10.3%		10.26		8.97		12.5%
Wholesale		24.36		21.90		10.1%		14.90		13.20		11.4%
Total		78.48		63.09		19.6%		61.90		46.90		24.2%

Revenue from the retail drugstores business increased by $3.68 million, or 10.0%, to $40.42 million for the six months ended September 30, 2021 from $36.74 million for the same period of last year. After excluding the impact of exchange rate fluctuation, the actual retail drugstores sales increased by 2.0%. The actual increase in retail drugstore sales was primarily due to continuous adjustments of merchandises, better fitness to the market, improved store employee incentive plan, and contribution from the new store sales.

Revenue from the online pharmacy business increased by $3.44 million, or 33.5%, to $13.70 million for the six months ended September 30, 2021 from $10.26 million for the same period of last year. The increase was primarily caused by an increase in sales to commercial insurance customers via the Company's official website and an increase in sales of prescription drugs via e-commerce platforms such as Tmall. The sales via the Company's official website were primarily made by certain pharmacy benefit management providers and insurance companies. For example, the Company has signed a service contract with Yingda Taihe Life Insurance Co. Ltd. ("Yingda"), a national insurance company. Certain companies bought private health insurances from Yingda for their employees. By linking the Company's online pharmacy platform with Yingda and training Yingda's employees, they are able to buy health products on the Company's online stores. The sales from these customers contributed significantly to the Company's official website sales. The Company's official website sales increased by 85.5% as compared to the same period of last year. Prescription drugs used to be prohibited from online sales due to safety concern. After the nation has lifted the ban order, online prescription drug sales become popular. As a result, the sale of prescription drugs was $4.93 million for the six months ended September 30, 2021. For the same period of last year, it was $3.63 million.

Revenue from the wholesale business increased by $9.47 million, or 63.6%, to $24.37 million for the six months ended September 30, 2021, from $14.90 million for the same period of last year. In order to obtain rebates from its major suppliers, the Company is required to make more purchase from the suppliers. To quickly resell these products, the Company chose to lower its sales price to local vendors, which in turn helped increase the sales significantly. 

Gross profit and gross margin

Total cost of goods sold increased by $16.19 million, or 34.5%, to $63.09 million for the six months ended September 30, 2021, from $46.90 million for the same period of last year. Gross profit increased by $0.41 million, or 2.7%, to $15.40 million for six months ended September 30, 2021 from $14.99 million for the same period of last year. Overall gross margin decreased by 4.6 percentage points to 19.6% for the six months ended September 30, 2021, from 24.2% for the same period of last year.

Gross margins for retail drugstores, online pharmacy and wholesale were 28.5%, 10.3%, and 10.1%, respectively, for the six months ended September 30, 2021, compared to gross margins for retail drugstores, online pharmacy and wholesale of 32.7%, 12.5%, and 11.4%, respectively, for the same period of last year.

Loss from operations

Selling and marketing expenses increased by $0.54 million, or 4.3%, to $13.29 million for the six months ended September 30, 2021 from $12.75 million for the same period of last year. The increase in selling and marketing expenses was primarily due to increase in fees charged by various platforms as a result of sales increase in the Company's online pharmacy.

General and administrative expenses decreased by $1.58 million, or 37.9%, to $2.60 million for the six months ended September 30, 2021 from $4.18 million for the same period of last year. The decrease in general and administrative expenses was primarily due to the decrease in labor cost. In response to the government insurance budget control, the Company cut off certain administration staff and combined several administrative duties. Additionally, in the six months ended September 30, 2021, the Company provided bonus to certain key staff. Such expenses, as a percentage of revenue, decreased to 3.3% from 6.8% for the same period of last year.

Loss from operations was $0.49 million for the six months ended September 30, 2021, compared to $1.94 million for the same period of last year. Operating margin was (0.6) % and (3.1)% for the six months ended September 30, 2021 and 2020, respectively.

Net loss

Net loss was $0.27 million, or $0.01 per basic and diluted share for the six months ended September 30, 2021, compared to net loss of $1.92 million, or $0.05 per basic and diluted share for the same period of last year.

Financial Condition

As of September 30, 2021, the Company has cash of $24.61 million, compared to $22.05 million as of March 31, 2021. Net cash provided by operating activities is $0.50 million for the six months ended September 30, 2021, compared to net cash used in operating activities of $0.35 million for the same period of last year. Net cash used in investing activities is $0.19 million for the six months ended September 30, 2021, compared to $1.76 million for the same period of last year. Net cash provided by financing activities is $3.43 million for the six months ended September 30, 2021, compared to $4.55 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

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,
		2021				2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	24,611,175			$	22,045,628
Restricted cash			14,576,183				12,627,016
Financial assets available for sale			92,940				91,472
Notes receivable			97,195				39,392
Trade accounts receivable			14,079,343				13,423,728
Inventories			17,443,466				16,972,965
Other receivables, net			5,768,743				5,051,960
Advances to suppliers			2,919,052				421,963
Other current assets			1,610,682				1,560,119
Total current assets			81,198,779				72,234,243
PROPERTY AND EQUIPMENT, net			6,212,655				6,549,035
OTHER ASSETS
Long-term investment			3,981,986				3,981,986
Farmland assets			857,176				835,427
Long term deposits			1,681,417				1,546,764
Other noncurrent assets			834,298				856,391
Operating lease right-of-use assets			18,580,840				16,778,729
Intangible assets, net			3,538,707				3,528,056
Total other assets			29,474,424				27,527,353
Total assets		$	116,885,858			$	106,310,631
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Short-term bank loan			-				762,270
Accounts payable, trade			32,828,259				29,895,830
Notes payable			31,299,086				25,663,633
Other payables			3,842,964				2,940,000
Other payables - related parties			1,133,803				445,305
Customer deposits			1,642,586				1,146,247
Taxes payable			519,531				197,733
Accrued liabilities			396,787				501,111
Long-term loan payable-current portion			2,643,513				2,557,634
Current portion of operating lease liabilities			1,562,318				788,171
Total current liabilities			75,868,847				64,897,934
Long-term loan payable			590,640				1,892,269
Long-term operating lease liabilities			16,063,306				15,118,083
Total liabilities			92,522,793				81,908,286
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock; $0.001 par value; 250,000,000 shares authorized; 41,751,790 and      41,751,790 shares issued and outstanding as of September 30, 2021 and March      31, 2021			41,752				41,752
Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and        outstanding as of September 30 and March 31, 2021			-				-
Additional paid-in capital			66,516,033				66,516,033
Statutory reserves			1,309,109				1,309,109
Accumulated deficit			(45,205,117)				(44,942,374)
Accumulated other comprehensive income			3,046,753				2,818,185
Total stockholders' equity			25,708,530				25,742,705
Noncontrolling interests			(1,345,465)				(1,340,360)
Total equity			24,363,065				24,402,345
Total liabilities and stockholders' equity		$	116,885,858			$	106,310,631

  

 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(UNAUDITED)
		For the six months ended September 30,
		2021				2020
REVENUES, NET		$	78,484,478			$	61,896,857
COST OF GOODS SOLD			63,085,681				46,903,886
GROSS PROFIT			15,398,797				14,992,971
SELLING EXPENSES			13,292,931				12,747,919
GENERAL AND ADMINISTRATIVE EXPENSES			2,598,175				4,181,725
TOTAL OPERATING EXPENSES			15,891,106				16,929,644
LOSS FROM OPERATIONS			(492,309)				(1,936,673)
OTHER INCOME (EXPENSE):
INTEREST INCOME			110,291				351,255
INTEREST EXPENSE			(156,786)				(245,079)
OTHER			274,883				(74,475)
CHANGE IN FAIR VALUE OF PURCHASE OPTION AND WARRANTS LIABILITY			-				27,784
LOSS BEFORE INCOME TAXES			(263,921)				(1,877,188)
PROVISION FOR INCOME TAXES			3,927				38,595
NET LOSS			(267,848)				(1,915,783)
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST			(5,105)				(190,555)
NET LOSS ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC.			(262,743)				(1,725,228)
OTHER COMPREHENSIVE GAIN
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS			228,568				1,125,030
COMPREHENSIVE LOSS			(39,280)				(790,753)
WEIGHTED AVERAGE NUMBER OF SHARES:
Basic			41,751,790				36,232,144
Diluted			41,751,790				36,232,144
LOSS PER SHARES:
Basic		$	(0.01)			$	(0.05)
Diluted		$	(0.01)			$	(0.05)

  

 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
		For the six months ended September 30,
		2021				2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss		$	(267,848)			$	(1,915,783)
Adjustments to reconcile net income to net cash provided by operating activities:
Bad debt direct write-off and provision			(159,978)				(286,076)
Depreciation and amortization			672,825				1,258,156
Change in fair value of purchase option derivative liability			-				(27,784)
Accounts receivable, trade			(442,229)				41,724
Notes receivable			(57,097)				(13,675)
Inventories and biological assets			(197,928)				(448,573)
Other receivables			(695,832)				279,650
Advances to suppliers			(2,487,104)				(531,255)
Other current assets			(94,153)				(853,289)
Long term deposit			(109,694)				(15,106)
Other noncurrent assets			35,787				13,619
Accounts payable, trade			2,449,608				2,362,338
Other payables and accrued liabilities			1,055,417				(845,411)
Customer deposits			477,331				509,549
Taxes payable			318,214				123,082
Net cash used in operating activities			497,319				(348,834)
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of equipment			(73,471)				(33,968)
Purchases of intangible assets			(6,962)				(55,038)
Investment in a joint venture			-				(1,422,193)
Additions to leasehold improvements			(105,638)				(246,846)
Net cash used in investing activities			(186,071)				(1,758,045)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term bank loan			-				714,160
Repayment from short-term bank loan			(773,500)				-
Repayment of third parties loan			(1,285,484)				(1,175,725)
Proceeds from notes payable			31,258,674				22,668,388
Repayment of notes payable			(26,041,718)				(26,949,176)
Decrease in Employee Deposits			-				(57,133)
Exercise of warrants			-				77,500
Proceeds from equity financing			-				9,205,173
Repayment of other payables-related parties			269,994				68,994
Net cash provided by financing activities			3,427,966				4,552,181
EFFECT OF EXCHANGE RATE ON CASH			775,500				1,941,058
DECREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH			4,514,714				4,386,360
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, beginning of period			34,672,644				30,982,606
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, end of period		$	39,187,358			$	35,368,966
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest			156,786				247,371
Cash paid for income taxes		$	3,927			$	3,457

  

 

 

View original content:https://www.prnewswire.com/news-releases/china-jo-jo-drugstores-reports-first-half-of-fiscal-year-2022-financial-results-301465447.html

SOURCE China Jo-Jo Drugstores, Inc.

FAQ

What were China Jo-Jo Drugstores' (CJJD) financial results for the first half of fiscal 2022?

CJJD reported revenue of $78.48 million for the first half of fiscal 2022, a 26.8% increase from the previous year.

How much did CJJD narrow its net loss in the first half of fiscal 2022?

CJJD narrowed its net loss to $0.27 million, representing an 86% improvement compared to the same period last year.

What factors contributed to CJJD's revenue growth?

Revenue growth was driven by significant increases in both the online pharmacy and wholesale sectors, growing by 33.5% and 63.6%, respectively.

What was CJJD's gross margin for the first half of fiscal 2022?

The gross margin for CJJD decreased to 19.6% from 24.2% in the same period last year.