China Jo-Jo Drugstores Reports Fiscal Year 2022 Financial Results

Rhea-AI Summary

China Jo-Jo Drugstores, Inc. (NASDAQ: CJJD) reported a robust fiscal year 2022 with total revenue rising 23.5% to $164.39 million and gross profit increasing 24.9% to $36.52 million. The net loss narrowed significantly by 61.8% to $3.20 million as operational losses improved. The growth stems from the retail drugstores, online pharmacy, and wholesale business segments. The Company aims to leverage its strategic initiatives, including digital services and enhanced management systems, to capture opportunities presented by the 'Healthy China 2030' initiative.

Positive

• Total revenue increased by 23.5% to $164.39 million.
• Gross profit rose by 24.9% to $36.52 million.
• Net loss narrowed by 61.8% to $3.20 million.
• Strong growth in online pharmacy sales (34.4%) and wholesale business (44.6%).
• Improvement in gross margin to 22.2%.

Negative

• Net cash used in operating activities increased to $5.39 million.
• Selling and marketing expenses rose by 14.6% to $30.88 million.

HANGZHOU, China, July 28, 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 fiscal year ended March 31, 2022.

Mr. Lei Liu, Chairman and CEO of Jo-Jo Drugstores, commented, "We are pleased with our fiscal year 2022 financial results, which reflect our continued growth momentum that we have achieved overall improvement across all key financial metrics. Compared with fiscal year 2021, our total revenue and gross profit increased by 23.5% and 24.9%, respectively, while our net loss narrowed down by 61.8%. Our solid financial performance demonstrates the resilience of our business and the reliability of our current business strategies in the current challenging market amid COVID-19 pandemic. Through leveraging the advantage of our stable supplier network, extensive distribution channels, and deep customer connections, we have proven our capability to execute our multifaceted growth plan and scale our business. Our dedicated team continues to provide high-quality services to customers, which has improved our brand awareness, strengthened customer relationships and distinguished us from peers in the market."

Mr. Liu continued, "The project of 'Healthy China 2030' advances the healthcare sector reforms and greatly enhances overall medical service quality and efficiency in China. We remain confident in the business we've built and our ability to capture the significant opportunity going forward brought by the project of 'Healthy China 2030'. We will continue to focus on executing our growth strategy and drive initiatives to deliver sustainable development. To realize the potential of our business model, we have enhanced various information and data systems, continued to develop the management system for patients with chronic diseases, upgraded our 'Medical + Medicine' business model, introduced digital services, developed 24-hour service stores, launched a new Office Automation system, and accelerated comprehensive budget management. We look forward to bringing our excellent services and products to more customers and continuing to add value to our existing customers. We will keep our efforts in investing in our team and business, expanding our distribution network, growing our customer base and building continued momentum toward our growth objectives. We believe that we are well-positioned to deliver profitable growth over the long-term and generate long-term shareholder value."

Fiscal Year 2022 Financial Highlights

		For the Year Ended March 31,
($ millions, except per share data)		2022		2021		% Change
Revenue		164.39		133.13		23.5 %
Retail drugstores		84.23		76.10		10.7 %
Online pharmacy		30.22		22.48		34.4 %
Wholesale		49.94		34.55		44.6 %
Gross profit		36.52		29.24		24.9 %
Gross margin		22.2 %		22.0 %		0.2 pp*
Loss from operations		(2.69)		(8.84)		69.5 %
Net loss		(3.20)		(8.38)		61.8 %
Loss per share		(0.92)		(2.39)		61.5 %
*Notes: pp represents percentage points

• Revenue increased by 23.5% to $164.39 million for the fiscal year ended March 31, 2022 from $133.13 million for the same period of last year.
• Gross profit increased by 24.9% to $36.52 million for the fiscal year ended March 31, 2022 from $29.24 million for the same period of last year.
• Gross margin increased by 0.2 percentage points to 22.2% for the fiscal year ended March 31, 2022 from 22.0% for the same period of last year.
• Net loss was $3.20 million, or $0.92 per basic and diluted share, for the fiscal year ended March 31, 2022, compared to net loss of $8.38 million, or $2.39 per basic and diluted share, for the same period of last year.

Fiscal Year 2022 Financial Results

Revenue

Revenue for the fiscal year ended March 31, 2022 increased by $31.25 million, or 23.5%, to $164.39 million from $133.13 million for the same period of last year. The increase in revenue was primarily due to the growth in retail drugstores, online pharmacy and wholesale business.

		For the Year Ended March 31,
		2022						2021
($ millions)		Revenue		Cost of Goods		Gross Margin		Revenue		Cost of Goods		Gross Margin
Retail drugstores		84.23		57.29		32.0 %		76.10		53.09		30.2 %
Online pharmacy		30.22		26.62		11.9 %		22.48		20.15		10.4 %
Wholesale		49.94		43.96		12.0 %		34.55		30.65		11.3 %
Total		164.39		127.87		22.2 %		133.13		103.89		22.0 %

Revenue from the retail drugstores business increased by $8.13 million, or 10.7%, to $84.23 million for the fiscal year ended March 31, 2022 from $76.10 million for the same period of last year. After excluding the impact of exchange rate fluctuation, the actual retail drugstores sales increased by 5.2%. The actual increase in retail drugstore sales was primarily due to continuous adjustments of merchandises, suitable to the market and improved store employee incentive plan, and contribution from the new store sales.

Revenue from the online pharmacy business increased by $7.74 million, or 34.4%, to $30.22 million for the fiscal year ended March 31, 2022 from $22.48 million for the same period of last year. The increase was primarily caused by 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.

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 $10.33 million for the fiscal year ended March 31, 2022 as compared to $8.24 million for the same period of last year.

Revenue from the wholesale business increased by $15.39 million, or 44.6%, to $49.94 million for the fiscal year ended March 31, 2022, from $34.55 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 $23.98 million, or 23.1%, to $127.87 million for the fiscal year ended March 31, 2022, from $103.89 million for the same period of last year. Gross profit increased by $7.28 million, or 24.9%, to $36.52 million for the fiscal year ended March 31, 2022 from $29.24 million for the same period of last year. Overall gross margin increased by 0.2 percentage points to 22.2% for the fiscal year ended March 31, 2022, from 22.0% for the same period of last year, due to higher retail drugstores profit margins.

Gross margins for retail drugstores, online pharmacy and wholesale were 32.0%, 11.9%, and 12.0%, respectively, for the fiscal year ended March 31, 2022, compared to gross margins for retail drugstores, online pharmacy and wholesale of 30.2%, 10.4%, and 11.3%, respectively, for the same period of last year.

Loss from operations

Selling and marketing expenses increased by $3.93 million, or 14.6%, to $30.88 million for the fiscal year ended March 31, 2022 from $26.95 million for the same period of last year. The increase in selling and marketing expenses was primarily due to increase in rent and the sales and marketing expenses.

General and administrative expenses decreased by $2.71 million, or 24.9%, to $8.19 million for the fiscal year ended March 31, 2022 from $10.90 million for the same period of last year. The decrease in general and administrative expenses was primarily due to the decrease in stock-based compensation, offset by the increase in bad debt expense. In December 2020, the Company issued a total of 3,790,000 shares of common stock and recorded stock-based compensation of approximately $3.94 million. In the year ended March 31, 2021, the Company recorded the reduction in the allowance for bad debts of $0.17 million as compared to the increase in the allowance for bad debts of $1.0 million in fiscal year 2022.

Loss from operations was $2.69 million for the fiscal year ended March 31, 2022, compared to $8.84 million for the same period of last year. Operating margin was (1.6) % and (6.6)% for the fiscal year ended March 31, 2022 and 2021, respectively.

Net loss

Net loss was $3.20 million, or $0.92 per basic and diluted share for the fiscal year ended March 31, 2022, compared to net loss of $8.38 million, or $2.39 per basic and diluted share for the same period of last year.

Financial Condition

As of March 31, 2022, the Company had cash of $18.46 million, compared to $22.05 million as of March 31, 2021. Net cash used in operating activities was $5.39 million for the fiscal year ended March 31, 2022, compared to $0.06 million for the same period of last year. The change is primarily attributable to a decrease in cash provided by accounts payable of $9,938,165, a decrease in cash provided by stock compensation of $3,941,600, a decrease in cash provided by other receivables of $2,396,659 offset by an increase of $5,138,115 in inventories and biological assets, an increase in cash provided by net loss of $5,177,212. Net cash used in investing activities was $0.31 million for the fiscal year ended March 31, 2022, compared to $2.00 million for the same period of last year. The change is primarily attributable to an increase in cash provided by investment in a joint venture of $1,470,119 and an increase of $170,445 in additions to leasehold improvements. Net cash provided by financing activities was $4.84 million for the fiscal year ended March 31, 2022, compared to $3.08 million for the same period of last year. The change is primarily due to repayment of notes payable and proceeds from equity and debt financing.

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 CONSOLIDATED BALANCE SHEETS
		March 31,				March 31,
		2022				2021
ASSETS
CURRENT ASSETS
Cash and cash equivalents		$	18,458,575			$	22,045,628
Restricted cash			16,881,002				12,627,016
Financial assets available for sale			94,648				91,472
Notes receivable			-				39,392
Trade accounts receivable			16,736,495				13,423,728
Inventories			16,020,140				16,972,965
Other receivables, net			5,764,660				5,051,960
Advances to suppliers			571,577				421,963
Other current assets			924,797				1,560,119
Total current assets			75,451,894				72,234,243
PROPERTY AND EQUIPMENT, net			5,922,179				6,549,035
OTHER ASSETS
Long-term investment			4,416,891				3,981,986
Farmland assets			722,283				835,427
Long term deposits			1,761,945				1,546,764
Other noncurrent assets			822,950				856,391
Operating lease right-of-use assets			13,738,081				16,778,729
Intangible assets, net			3,547,986				3,528,056
Total other assets			25,010,136				27,527,353
Total assets		$	106,384,209			$	106,310,631
LIABILITIES AND STOCKHOLDERS' EQUITY(DEFICIT)
CURRENT LIABILITIES
Short-term bank loan			-				762,270
Accounts payable, trade			27,331,381				29,895,830
Notes payable			34,189,022				25,663,633
Other payables			2,268,967				2,940,000
Other payables - related parties			1,561,244				445,305
Customer deposits			1,873,062				1,146,247
Taxes payable			1,381,108				197,733
Accrued liabilities			556,037				501,111
Long-term loan payable-current portion			1,957,956				2,557,634
Current portion of operating lease liabilities			3,329,619				788,171
Total current liabilities			74,448,396				64,897,934
Long-term loan payable			-				1,892,269
Long term operating lease liabilities			9,197,027				15,118,083
Employee Deposits			-				-
Purchase option and warrants liability			-				-
Total liabilities			83,645,423				81,908,286
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY(DEFICIT)
Common stock; $0.001 par value; 250,000,000 shares authorized; 3,479,316 and          3,479,316 shares issued and outstanding as of March 31, 2022 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 March 31, 2022 and March 31, 2021			-				-
Additional paid-in capital			66,516,033				66,516,033
Statutory reserves			1,309,109				1,309,109
Accumulated deficit			(48,134,493)				(44,942,374)
Accumulated other comprehensive income			4,352,992				2,818,185
Total stockholders' equity			24,085,393				25,742,705
Noncontrolling interests			(1,346,607)				(1,340,360)
Total equity			22,738,786				24,402,345
Total liabilities and stockholders' equity		$	106,384,209			$	106,310,631

 

 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
		For the years ended March 31,
		2022				2021				2020
REVENUES, NET		$	164,392,555			$	133,134,633			$	117,327,689
COST OF GOODS SOLD			127,873,515				103,890,824				91,801,259
GROSS PROFIT			36,519,040				29,243,809				25,526,430
SELLING EXPENSES			30,876,959				26,954,914				23,793,603
GENERAL AND ADMINISTRATIVE EXPENSES			8,187,176				10,897,629				8,108,377
IMPAIRMENT OF LONG-LIVED ASSETS			148,795				228,506				628,192
TOTAL OPERATING EXPENSES			39,212,930				38,081,049				32,530,172
LOSS FROM OPERATIONS			(2,693,890)				(8,837,240)				(7,003,742)
OTHER EXPENSE:
INTEREST INCOME			401,921				707,878				1,063,747
INTEREST EXPENSE			(262,218)				(455,187)				(698,518)
OTHER			455,547				176,519				(204,064)
CHANGE IN FAIR VALUE OF PURCHASE OPTION AND     WARRANTS LIABILITY			-				64,090				401,158
LOSS BEFORE INCOME TAXES			(2,098,640)				(8,343,940)				(6,441,419)
PROVISION FOR INCOME TAXES			1,099,726				31,638				16,258
NET LOSS			(3,198,366)				(8,375,578)				(6,457,677)
LESS: NET LOSS ATTRIBUTABLE TO NONCONTROLLING     INTEREST			(6,247)				(255,716)				(644,308)
NET LOSS ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES,     INC.			(3,192,119)				(8,119,862)				(5,813,369)
OTHER COMPREHENSIVE LOSS
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS			1,534,807				1,377,761				(1,068,540)
COMPREHENSIVE LOSS			(1,663,559)				(6,997,817)				(7,526,217)
WEIGHTED AVERAGE NUMBER OF SHARES:
Basic			3,479,316				3,398,397				2,734,714
Diluted			3,479,316				3,398,397				2,734,714
LOSS PER SHARES:
Basic		$	(0.92)			$	(2.39)			$	(2.16)
Diluted		$	(0.92)			$	(2.39)			$	(2.16)

 

 

 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS
		For the years ended  March 31,
		2022				2021				2020
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income		$	(3,198,366)			$	(8,375,578)			$	(6,457,677)
Adjustments to reconcile net income to net cash used in operating activities:
Bad debt direct write-off and provision			939,720				(706,862)				446,354
Depreciation and amortization			1,256,491				1,750,890				2,082,817
Impairment of long lived assets			148,795				228,506				628,192
Stock based compensation			-				3,941,600				34,560
Change in fair value of purchase option derivative liability			-				(64,090)				(401,158)
Change in operating assets:
Accounts receivable, trade			(2,657,283)				(3,307,946)				(1,567,774)
Notes receivable			40,260				21,539				112,803
Inventories and biological assets			1,523,098				(3,615,017)				979,935
Other receivables			(1,927,692)				468,967				(1,010,722)
Advances to suppliers			(171,783)				1,893,857				148,638
Long term deposit			(159,508)				26,910				596,209
Other current assets			376,134				1,004,448				(1,278,833)
Other noncurrent assets			62,394				38,142				87,065
Change in operating liabilities:
Accounts payable, trade			(3,558,050)				6,380,115				(317,755)
Other payables and accrued liabilities			99,132				(183,111)				(967,751)
Customer deposits			678,601				368,690				(22,963)
Taxes payable			1,162,084				66,648				115
Net cash used in operating activities			(5,385,972)				(62,292)				(6,907,945)
CASH FLOWS FROM INVESTING ACTIVITIES:
Disposal of financial assets available for sale			-				75,973				14,356
Purchase of financial assets available for sale			-				-				-
Acquisition of equipment and building			(89,960)				(126,766)				(656,297)
Investment in a joint venture			-				(1,470,119)				(2,567,083)
Purchases of intangible assets			(7,012)				(97,802)				(871,145)
Additions to leasehold improvements			(209,166)				(379,611)				(756,444)
Net cash used in investing activities			(306,138)				(1,998,325)				(4,836,613)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term bank loan			-				738,315				1,435,620
Repayment of short-term bank loan			(779,059)				(1,476,630)				-
Proceeds from third parties loan			-				-				7,178,100
Repayment of third parties loan			(2,613,965)				(2,395,629)				(658,645)
Proceeds from notes payable			65,370,181				48,292,231				48,974,772
Repayment of notes payable			(57,829,269)				(51,295,776)				(46,896,917)
Increase in financial liability			-				(73,832)				(7,178)
Exercise of warrants			-				77,500				-
Proceeds from sale of stock and warrants			-				9,287,100				9,273,077
Repayment of other payable-related parties			689,010				(73,426)				(285,123)
Net cash provided by financing activities			4,836,898				3,079,853				19,013,706
EFFECT OF EXCHANGE RATE ON CASH			1,522,146				2,670,802				(1,031,744)
INCREASE IN CASH AND CASH EQUIVALENTS AND RESTRICTED CASH			666,933				3,690,038				6,237,404
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, beginning of year			34,672,644				30,982,606				24,745,202
CASH AND CASH EQUIVALENTS AND RESTRICTED CASH, end of year		$	35,339,577			$	34,672,644			$	30,982,606
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes		$	3,955			$	37,738			$	17,198
Cash paid for interest			262,218				455,187				108,098

 

 

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SOURCE China Jo-Jo Drugstores, Inc.

FAQ

What were China Jo-Jo Drugstores' revenue figures for fiscal year 2022?

China Jo-Jo Drugstores reported revenue of $164.39 million for the fiscal year ended March 31, 2022.

How much did the net loss decrease for CJJD in fiscal year 2022?

The net loss for China Jo-Jo Drugstores decreased by 61.8%, totaling $3.20 million for fiscal year 2022.

What contributed to the revenue growth of CJJD?

Revenue growth was primarily driven by increases in retail drugstores, online pharmacy, and wholesale business segments.

What are the future growth strategies for China Jo-Jo Drugstores?

The Company plans to capitalize on the 'Healthy China 2030' initiative and enhance digital services to drive sustainable growth.

What was the gross margin for China Jo-Jo Drugstores in fiscal year 2022?

The gross margin for fiscal year 2022 was 22.2%, an increase from 22.0% in the previous year.