Zhongchao Inc. Reports the Fiscal Year 2021 Financial Results
Zhongchao Inc. (NASDAQ: ZCMD) reported a 94.6% decline in net income to $238,665 for the fiscal year 2021, down from $4.46 million in 2020. Revenues fell 9.4% to $16.30 million, primarily due to reduced income from medical training and education services. Gross profit also decreased by 20.5% to $9.44 million, leading to a gross margin decline of 8.1 percentage points. Operating expenses rose 32.2% to $9.76 million, driven by significantly increased general and administrative costs.
- Net cash provided by operating activities increased to $2.86 million from negative cash flow of $1.04 million in the previous year.
- Revenues decreased by 9.4% to $16.30 million.
- Gross profit decreased by 20.5% to $9.44 million.
- Net income fell by 94.6% to $238,665.
- Earnings per share declined by 94.5% to $0.010.
- Total operating expenses increased by 32.2% to $9.76 million.
SHANGHAI, May 9, 2022 /PRNewswire/ -- Zhongchao Inc. (NASDAQ: ZCMD) ("Zhongchao" or the "Company"), an internet technology company offering healthcare professionals the online healthcare information, professional training and educational services platform and patient management service, today announced its financial results for the fiscal year ended December 31, 2021.
Key Financial Highlights for the Fiscal Year 2021 as compared to the Fiscal Year 2020
For the Years Ended December 31, | |||||||||||
2021 | 2020 | %Change | |||||||||
Revenues | $ | 16,296,770 | $ | 17,989,788 | - | ||||||
Gross profit | $ | 9,438,826 | $ | 11,872,148 | - | ||||||
Gross margin | -8.1pp | ||||||||||
(Loss) income from operations | $ | (320,741) | $ | 4,489,353 | - | ||||||
Operating (loss) margin | - | -27.0pp | |||||||||
(Loss) income before income taxes | $ | (110,753) | $ | 4,941,884 | - | ||||||
Net income attributable to Zhongchao Inc.'s | $ | 238,665 | $ | 4,458,380 | - | ||||||
Earnings per share | $ | 0.010 | $ | 0.183 | - | ||||||
* pp: percentage points
- Revenues decreased by
9.4% to$16.30 million for the fiscal year 2021. - Gross profit decreased by
20.5% to$9.44 million and gross margin decreased by 8.1 percentage points to57.9% for the fiscal year 2021. - Loss from operations was
$0.32 million for the fiscal year 2021. - Net income attributable to the Company's ordinary shareholders decreased by
94.6% to$0.24 million for the fiscal year 2021, primarily driven by increased cost of revenues and operating expenses. - Earnings per share was
$0.01 0 for the fiscal year 2021, compared to$0.18 3 for the same period of last year.
Financial Results for the Fiscal Year Ended December 31, 2021
Revenues
For the fiscal year 2021, revenues decreased by
Cost of revenues
Cost of revenue increased by
Gross profit
Gross profit decreased by
Gross margin decreased by 8.1 percentage points to
Operating expenses
Selling and marketing expenses decreased by
General and administrative expenses increased by
Research and development expenses decreased by
Total operating expenses increased by
Loss (income) before income taxes
Loss before income taxes was
Income tax benefits (expenses)
Income tax benefits was
Net income and EPS
Net income decreased by
After deducting for non-controlling interests, net income attributable to the Company's shareholders decreased by
Earnings per share was
Financial Condition and Cash Flows
As of December 31, 2021, the Company had cash and cash equivalents of
Net cash provided by operating activities was
About Zhongchao Inc.
Incorporated in 2012 with headquarter offices in Shanghai and Beijing, China, Zhongchao Inc. a platform-based internet technology company. It provides online healthcare information, professional training and educational services to healthcare professionals under its "MDMOOC" platform (www.mdmooc.org), offers patient management service on the professional field of tumor and rare diseases via "Zhongxin", and operates an online information platform, Sunshine Health Forums, to general public. More information about the Company can be found at its investor relations website at http://izcmd.com.
Safe Harbor Statement
This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may, "will, "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following: the Company's goals and strategies; the Company's future business development; product and service demand and acceptance; changes in technology; economic conditions; the growth of the professional training and educational services market in China and the other international markets the Company plans to serve; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China and the international markets the Company plans to serve and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the SEC, the length and severity of the recent coronavirus outbreak, including its impacts across our business and operations. For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the SEC, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.
For more information, please contact:
At the Company:
Pei Xu, CFO
Email: xupei@mdmooc.org
Phone: +86 21-3220-5987
Investor Relations:
Sherry Zheng
Weitian Group LLC
Email: shunyu.zheng@weitian-ir.com
Phone: +1 718-213-7386
ZHONGCHAO INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Expressed in U.S. dollar, except for the number of shares) | ||||||||
December 31, | December 31, | |||||||
ASSETS | ||||||||
Current Assets | ||||||||
Cash and cash equivalents | $ | 13,914,982 | $ | 15,072,947 | ||||
Short-term investments | 296,158 | 2,032,928 | ||||||
Accounts receivable | 9,218,883 | 10,321,837 | ||||||
Prepayments | 394,971 | 554,298 | ||||||
Loans receivable | 2,660,668 | - | ||||||
Due from a related party | 392,305 | - | ||||||
Other current assets | 375,709 | 1,613,408 | ||||||
Total Current Assets | 27,253,676 | 29,595,418 | ||||||
Investment in equity method investees | 1,993,285 | 1,258,787 | ||||||
Investment in an equity security | 150,000 | - | ||||||
Property and equipment, net | 3,923,086 | 1,997,761 | ||||||
Deposit for property | 181,233 | 700,884 | ||||||
Prepayments for lease of land | 353,347 | 367,588 | ||||||
Intangible assets, net | 30,259 | 34,973 | ||||||
Right of use assets | 205,824 | 65,137 | ||||||
Deferred tax assets | 2,176,710 | 795,547 | ||||||
Total Assets | $ | 36,267,420 | $ | 34,816,095 | ||||
LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
Current Liabilities | ||||||||
Accounts payable | $ | 38,933 | $ | 408,426 | ||||
Advances from customers | 7,432 | 6,760 | ||||||
Income tax payable | 2,478,273 | 1,523,175 | ||||||
Operating lease liabilities, current portion | 88,968 | 62,160 | ||||||
Accrued expenses and other liabilities | 974,801 | 981,433 | ||||||
Total Current Liabilities | 3,588,407 | 2,981,954 | ||||||
Operating lease liabilities, noncurrent portion | 112,591 | - | ||||||
Total Liabilities | 3,700,998 | 2,981,954 | ||||||
Commitments and Contingencies | ||||||||
Shareholders' Equity | ||||||||
Class A Ordinary Share (par value | 1,946 | 1,944 | ||||||
Class B Ordinary Share (par value | 550 | 550 | ||||||
Additional paid-in capital | 22,986,975 | 22,775,154 | ||||||
Statutory reserve | 1,199,054 | 801,502 | ||||||
Retained earnings | 7,180,891 | 7,339,778 | ||||||
Accumulated other comprehensive income | 1,197,006 | 915,213 | ||||||
Total Shareholders' Equity | 32,566,422 | 31,834,141 | ||||||
Total Liabilities and Shareholders' Equity | $ | 36,267,420 | $ | 34,816,095 | ||||
ZHONGCHAO INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (Expressed in U.S. dollar, except for the number of shares) | ||||||||||||
For the Years Ended | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Revenues | $ | 16,296,770 | $ | 17,989,788 | $ | 14,882,763 | ||||||
Cost of revenues | (6,857,944) | (6,117,640) | (4,655,827) | |||||||||
Gross Profit | 9,438,826 | 11,872,148 | 10,226,936 | |||||||||
Operating Expenses | ||||||||||||
Selling and marketing expenses | (3,137,316) | (3,441,941) | (3,196,469) | |||||||||
General and administrative expenses | (5,863,373) | (3,124,301) | (2,524,003) | |||||||||
Research and development expenses | (758,878) | (816,553) | (864,320) | |||||||||
Total Operating Expenses | (9,759,567) | (7,382,795) | (6,584,792) | |||||||||
(Loss) Income from Operations | (320,741) | 4,489,353 | 3,642,144 | |||||||||
Interest income, net | 175,987 | 146,965 | 211,479 | |||||||||
Other income, net | 34,001 | 305,566 | 534,020 | |||||||||
(Loss) Income Before Income Taxes | (110,753) | 4,941,884 | 4,387,643 | |||||||||
Income tax benefits (expenses) | 349,418 | (484,787) | (387,144) | |||||||||
Net Income | 238,665 | 4,457,097 | 4,000,499 | |||||||||
Net loss attributable to noncontrolling interests | - | 1,283 | 46,171 | |||||||||
Net Income Attributable to Zhongchao Inc.'s shareholders | $ | 238,665 | $ | 4,458,380 | $ | 4,046,670 | ||||||
Other Comprehensive Income (Loss) | ||||||||||||
Foreign currency translation adjustment | 281,793 | 1,259,984 | (173,604) | |||||||||
Comprehensive Income | 520,458 | 5,717,081 | 3,826,895 | |||||||||
Total comprehensive loss attributable to noncontrolling interests | - | 1,283 | 46,171 | |||||||||
Total comprehensive income attributable to Zhongchao Inc.'s | $ | 520,458 | $ | 5,718,364 | $ | 3,873,066 | ||||||
Weighted average number of ordinary share outstanding | ||||||||||||
Basic and Diluted | 24,938,513 | 24,425,637 | 21,600,135 | |||||||||
Earnings per share | ||||||||||||
Basic and Diluted | $ | 0.010 | $ | 0.183 | $ | 0.187 | ||||||
ZHONGCHAO INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Expressed in U.S. dollar, except for the number of shares) | ||||||||||||
For the Years Ended | ||||||||||||
2021 | 2020 | 2019 | ||||||||||
Cash Flows from Operating Activities: | ||||||||||||
Net income | $ | 238,665 | $ | 4,457,097 | $ | 4,000,499 | ||||||
Adjustments to reconcile net income to net cash provided by (used | ||||||||||||
Write-off of accounts receivable | 1,449,827 | 336,367 | - | |||||||||
Depreciation and amortization expenses | 341,608 | 202,325 | 102,905 | |||||||||
Amortization of right of use assets | 361,369 | 222,353 | 159,259 | |||||||||
Share-based compensation expenses | 211,823 | 168,350 | 159,984 | |||||||||
Deferred tax benefits | (1,346,616) | (58,424) | (318,087) | |||||||||
Equity investment loss | 13,758 | 25,622 | - | |||||||||
Changes in fair value of short-term investments | 58,403 | 10,331 | - | |||||||||
Changes in operating assets and liabilities: | ||||||||||||
Accounts receivable | (104,230) | (5,486,914) | (3,134,065) | |||||||||
Prepayments | 171,144 | (197,402) | 231,894 | |||||||||
Other current assets | 1,302,009 | (1,143,200) | 119,523 | |||||||||
Accounts payable | (375,144) | 260,350 | 94,461 | |||||||||
Advances from customers | 496 | 6,398 | (476,261) | |||||||||
Income tax payable | 905,733 | 535,981 | 618,120 | |||||||||
Accrued expenses and other liabilities | (4,430) | 179,738 | 408,725 | |||||||||
Lease liabilities | (362,567) | (230,819) | (153,616) | |||||||||
Deferred government grants | - | (325,992) | (405,321) | |||||||||
Net Cash Provided by (Used in) Operating Activities | 2,861,848 | (1,037,839) | 1,408,020 | |||||||||
Cash Flows from Investing Activities: | ||||||||||||
Purchases of property and equipment | (1,799,860) | (160,602) | (1,312,941) | |||||||||
Payments of deposits for property purchase | - | (688,267) | - | |||||||||
Investments in short-term investments | - | (2,043,259) | (2,460,879) | |||||||||
Investment in a limited partnership | - | (1,217,039) | - | |||||||||
Investment in equity method investees | (708,129) | - | - | |||||||||
Investment in an equity security | (150,000) | - | - | |||||||||
Release from short-term investments | 1,678,367 | - | 3,618,940 | |||||||||
Buy out of a non-controlling interests | - | - | (33,718) | |||||||||
Loan (provided to) repayment from related parties | (387,549) | 14,489 | (14,476) | |||||||||
Loans provided to third parties | (3,725,211) | - | - | |||||||||
Loans repayment from third parties | 1,075,098 | - | - | |||||||||
Net Cash Used in Investing Activities | (4,017,284) | (4,094,678) | (203,074) | |||||||||
Cash Flows from Financing Activities: | ||||||||||||
Proceeds from issuance of ordinary shares in connection with | - | 11,886,363 | - | |||||||||
Payment of expenses relating to initial public offerings | - | (388,709) | (468,328) | |||||||||
Repayment of bank borrowings | - | - | (723,788) | |||||||||
Net Cash Provided by (Used in) Financing Activities | - | 11,497,654 | (1,192,116) | |||||||||
Effect of exchange rate changes on cash and cash equivalents | (2,529) | 875,258 | (98,953) | |||||||||
Net (decrease) increase in cash and cash equivalents | (1,157,965) | 7,240,395 | (86,123) | |||||||||
Cash and cash equivalents at beginning of year | 15,072,947 | 7,832,552 | 7,918,675 | |||||||||
Cash and cash equivalents at end of year | $ | 13,914,982 | $ | 15,072,947 | $ | 7,832,552 | ||||||
Supplemental Cash Flow Information | ||||||||||||
Cash paid for interest expense | $ | - | $ | - | $ | 30,312 | ||||||
Cash paid for income tax | $ | 91,464 | $ | 2,642 | $ | 87,111 | ||||||
Noncash investing activities | ||||||||||||
Right of use assets obtained in exchange for operating lease | $ | 555,639 | $ | 37,919 | $ | 419,362 | ||||||
View original content:https://www.prnewswire.com/news-releases/zhongchao-inc-reports-the-fiscal-year-2021-financial-results-301542297.html
SOURCE Zhongchao Inc.
FAQ
What were Zhongchao's financial results for 2021?
How did Zhongchao's earnings per share change in 2021?
What were the key drivers behind Zhongchao's revenue decline in 2021?
What was the net cash flow from operating activities for Zhongchao in 2021?
How did operating expenses change for Zhongchao in 2021?
