Attached files
| file | filename |
|---|---|
| 8-K - CURRENT REPORT - CHINA JO-JO DRUGSTORES, INC. | f8k062915_chinajojo.htm |
Exhibit 99.1
China Jo-Jo Drug Stores Announces Fourth Quarter and Year End Financial Results for Fiscal Year 2015
Q4 Revenue grew 30.1%, EPS jumped to $0.03/share from Losses of $1.01/share
FY 2015 Online Pharmacy Sales Increased 96.8%, Gross Profit up 117.2% and EPS Improved to $0.06 from Losses of $1.83
HANGZHOU, China, June 29, 2015 /PRNewswire/ -- China Jo-Jo Drugstores, Inc. (NASDAQ CM: CJJD) (the "Company" or "China Jo-Jo"), a leading China-based retail and wholesale distributor of pharmaceutical and health care products through its own online and retail pharmacies, today announced financial results for the fourth quarter and fiscal year ended March 31, 2015.
FY 2015 Fourth Quarter Highlights:
| ● | Revenue increased 30.1% to $20,982,649 for the fourth quarter ended March 31, 2015 as compared to $16,129,575 during the same period last year. |
| ● | Q4 Gross profit increased to $3,341,109 as opposed to a loss of $1,001,170 for the same quarter last year |
| ● | Q4 net income increased by $14,985,454 to $519,423 during the three months ended March 31, 2015, a significant improvement from a net loss of $14,466,031 in the fourth quarter of last year |
| ● | Q4 earning per share (EPS) increased to $0.03/share from EPS of $(1.01) for the same quarter last year |
Fiscal Year 2015 Highlights:
| ● | Total revenue increased by $10,741,145 or 16.2% for the year ended March 31, 2015 as compared to the previous fiscal year |
| ● | Retail drugstores sales increased by $ 8,702,955 or 21.7%, for the year ended March 31, 2015, as compared to the previous fiscal year |
| ● | Online pharmacy sales increased 96.8% over FY 2014, to a record revenue of $14,879,397, which accounts for approximately 19.4% of the company's overall sales |
| ● | Gross profit increased by $6,710,539, or 117.2% year over year, while gross margin essentially doubled from 8.7% of FY 2014 to 16.2% of FY 2015 |
| ● | Net income increased to $855,628, and EPS jumped to $0.06/share during FY 2015, from a net loss of $25,356,170 and EPS of ($1.83)/share |
| ● | The company ended the year with cash and restricted cash balance of $13,015,682, $59.5 million in total assets, and $42.3 million in total liabilities |
Revenue increase during FY 2015 was mainly due to the expansion of the Company's retail drugstores and online pharmacy business. Retail drugstores sales, which accounted for approximately 63.5% of total revenue, increased by approximately $8.7 million, of which a 21.2% increase in same-store sales contributed approximately $8.0 million while new stores sales contributed approximately $1.1million.
Online pharmacy sales reached $14,879,397, an increase of 96.8% over the previous year, thanks to a series of online marketing efforts, plus China Jo-Jo expanded their presence on e-commerce platforms, like Taobao, JD.com and Amazon.com. The Company also signed a service agreement with Alipay (China) Internet Technology Ltd. ("Alipay") to incorporate Alipay's online payment service ("Alipay Service") into its online stores. This move gave China Jo-Jo access to Alipay's 300 million registered users. Furthermore, the Company reached an agreement with Shanghai Jianbao Technology Co., Ltd. ("Shanghai Jianbao"), a leader in China's Pharmacy Benefit Management (PBM) sector, to set up a new joint venture that strengthened China Jo-Jo's cooperation with large insurance companies in China.
Mr. Lei Liu, Chairman and CEO of the Company stated, "We are thrilled to close out fiscal year 2015 with a stellar fourth quarter performance. Our official online pharmacy, www.dada360.com, experienced more than 3 times revenue growth year over year thanks to our strategic partnership with China's leading Pharmacy Benefit Management (PBM) provider and insurance companies. After almost two years of company's restructure of which our management has shifted focuses and resources to higher growth and high margin market segment, we believe FY 2015 was a major turning point for China Jo-Jo. We not only achieved probability from last two years' of major losses, but also regained the trust of our loyal customers and shareholders.
"As we accelerate our growth into 2016 and beyond, we believe our e-commerce sales will one day surpass the sales from our traditional offline pharmacy business. By leveraging our online presence, China Jo-Jo aims to become a nationally recognized pharmacy chain and a leading player in the online drugstore marketspace in China."
| 2 |
CHINA JO-JO DRUGSTORES, INC AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| March 31, | March 31, | |||||||
| 2015 | 2014 | |||||||
| A S S E T S | ||||||||
| CURRENT ASSETS | ||||||||
| Cash | $ | 4,023,581 | $ | 4,445,276 | ||||
| Restricted cash | 8,992,101 | 3,114,543 | ||||||
| Financial assets available for sale | 1,307,200 | |||||||
| Notes receivable | 138,952 | - | ||||||
| Trade accounts receivable, net | 9,237,743 | 6,734,536 | ||||||
| Inventories | 10,538,591 | 7,047,397 | ||||||
| Other receivables, net | 1,130,264 | 149,546 | ||||||
| Advances to suppliers, net | 4,717,352 | 4,577,194 | ||||||
| Other current assets | 2,200,838 | 1,663,102 | ||||||
| Total current assets | 42,286,622 | 27,731,594 | ||||||
| PROPERTY AND EQUIPMENT, net | 7,056,781 | 9,412,688 | ||||||
| OTHER ASSETS | ||||||||
| Farmland assets | 1,704,359 | 1,371,735 | ||||||
| Long term deposits | 2,584,025 | 2,786,437 | ||||||
| Other noncurrent assets | 2,734,798 | 3,036,930 | ||||||
| Intangible assets, net | 3,142,003 | 1,569,443 | ||||||
| Total other assets | 10,165,185 | 8,764,545 | ||||||
| Total assets | $ | 59,508,588 | $ | 45,908,827 | ||||
| L I A B I L I T I E S A N D S T O C K H O L D E R S' E Q U I T Y | ||||||||
| CURRENT LIABILITIES | ||||||||
| Short-term loan payable | $ | 32,680 | $ | 162,300 | ||||
| Accounts payable, trade | 15,915,915 | 14,554,726 | ||||||
| Notes payable | 15,752,969 | 7,820,718 | ||||||
| Other payables | 2,931,869 | 1,282,211 | ||||||
| Other payables - related parties | 2,729,740 | 2,384,294 | ||||||
| Loan from third parties | - | 294,042 | ||||||
| Customer deposits | 3,759,050 | 3,185,885 | ||||||
| Taxes payable | 328,111 | 373,501 | ||||||
| Accrued liabilities | 509,537 | 1,208,242 | ||||||
| Total current liabilities | 41,959,871 | 31,265,919 | ||||||
| Purchase option and warrant liability | 315,327 | 278,916 | ||||||
| Total liabilities | 42,275,198 | 31,544,835 | ||||||
| COMMITMENTS AND CONTINGENCIES | ||||||||
| STOCKHOLDERS' EQUITY | ||||||||
| Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and outstanding as of March 31, 2015 and 2014 | - | - | ||||||
| Common stock; $0.001 par value; 250,000,000 shares authorized; 15,650,504 and 14,416,022 shares issued and outstanding as of March 31, 2015 and 2014 | 15,651 | 14,416 | ||||||
| Additional paid-in capital | 19,301,233 | 17,355,555 | ||||||
| Statutory reserves | 1,309,109 | 1,309,109 | ||||||
| Accumulated deficit | (7,404,210 | ) | (8,260,767 | ) | ||||
| Accumulated other comprehensive income | 3,972,543 | 3,905,136 | ||||||
| Total stockholders' equity | 17,194,326 | 14,323,449 | ||||||
| Noncontrolling interests | 39,064 | 40,543 | ||||||
| Total equity | 17,233,390 | 14,363,992 | ||||||
| Total liabilities and stockholders' equity | $ | 59,508,588 | $ | 45,908,827 | ||||
| 3 |
CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)
| For the years ended March 31, | ||||||||
| 2015 | 2014 | |||||||
| REVENUES, NET | $ | 76,895,732 | $ | 66,154,587 | ||||
| COST OF GOODS SOLD | 64,457,707 | 60,427,101 | ||||||
| GROSS PROFIT | 12,438,025 | 5,727,486 | ||||||
| SELLING EXPENSES | 10,416,451 | 13,688,771 | ||||||
| GENERAL AND ADMINISTRATIVE EXPENSES | 313,390 | 11,268,857 | ||||||
| TOTAL OPERATING EXPENSES | 10,729,841 | 24,957,628 | ||||||
| INCOME (LOSS) FROM OPERATIONS | 1,708,184 | (19,230,142 | ) | |||||
| OTHER (EXPENSE) INCOME, NET | 295,018 | (8,412 | ) | |||||
| IMPAIRMENT OF GOODWILL | - | - | ||||||
| IMPAIRMENT OF LONG-LIVED ASSETS | (1,053,765 | ) | (4,995,012 | ) | ||||
| IMPAIRMENT OF AGRICULTURAL INVENTORY | (820,637 | ) | ||||||
| CHANGE IN FAIR VALUE OF PURCHASE OPTION AND WARRANTS LIABILITY | (36,411 | ) | (257,097 | ) | ||||
| INCOME (LOSS) BEFORE INCOME TAXES | 913,026 | (25,311,300 | ) | |||||
| PROVISION FOR INCOME TAXES | 57,398 | 44,870 | ||||||
| NET INCOME (LOSS) | 855,628 | (25,356,170 | ) | |||||
| ADD: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST | 929 | 34 | ||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC. | $ | 856,557 | $ | (25,356,136 | ) | |||
| NET INCOME (LOSS) | $ | 855,628 | $ | (25,356,170 | ) | |||
| OTHER COMPREHENSIVE INCOME | ||||||||
| Foreign currency translation adjustments | 66,857 | 784,184 | ||||||
| COMPREHENSIVE INCOME (LOSS) | 922,485 | (24,571,986 | ) | |||||
| Less: Comprehensive income (loss) attributable to noncontrolling interest | (1,479 | ) | (668 | ) | ||||
| COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO CHINA JO-JO DRUGSTORES, INC. | $ | 921,006 | $ | (24,572,654 | ) | |||
| WEIGHTED AVERAGE NUMBER OF SHARES: | ||||||||
| Basic | 14,960,522 | 13,880,190 | ||||||
| Diluted | 15,156,423 | 13,880,190 | ||||||
| EARNINGS (LOSS) PER SHARES: | ||||||||
| Basic | $ | 0.06 | $ | (1.83 | ) | |||
| Diluted | $ | 0.06 | $ | (1.83 | ) | |||
| 4 |
CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
| Accumulated | ||||||||||||||||||||||||||||||||
| Common Stock | Retained Earnings | other | ||||||||||||||||||||||||||||||
| Number of | Paid-in | Statutory | comprehensive | Noncontrolling | ||||||||||||||||||||||||||||
| shares | Amount | capital | reserves | Unrestricted | income/(loss) | interest | Total | |||||||||||||||||||||||||
| BALANCE, March 31, 2013 | 13,609,002 | 13,609 | 16,609,747 | 1,309,109 | 17,095,369 | 3,121,654 | (1,879 | ) | $ | 38,147,609 | ||||||||||||||||||||||
| Stock based compensation | 807,020 | 807 | 746,621 | 747,428 | ||||||||||||||||||||||||||||
| Net loss | (25,356,136 | ) | (34 | ) | (25,356,170 | ) | ||||||||||||||||||||||||||
| Start-up of Shouantang Health | 39,837 | 39,837 | ||||||||||||||||||||||||||||||
| Closing of Shanghai Zhongxin | (813 | ) | 1,917 | 1,104 | ||||||||||||||||||||||||||||
| Foreign currency translation gain | 783,482 | 702 | 784,184 | |||||||||||||||||||||||||||||
| BALANCE, March 31, 2014 | 14,416,022 | $ | 14,416 | 17,355,555 | 1,309,109 | (8,260,767 | ) | 3,905,136 | 40,543 | $ | 14,363,992 | |||||||||||||||||||||
| Stock based compensation | 615,000 | 615 | 1,003,872 | 1,004,487 | ||||||||||||||||||||||||||||
| Net income | 856,557 | (929 | ) | 855,628 | ||||||||||||||||||||||||||||
| Issuance of common stocks in exchange of debts | 619,482 | 620 | 941,806 | - | 942,426 | |||||||||||||||||||||||||||
| Foreign currency translation gain (loss) | 67,407 | (550 | ) | 66,857 | ||||||||||||||||||||||||||||
| BALANCE, March 31, 2015. | 15,650,504 | $ | 15,651 | 19,301,233 | 1,309,109 | (7,404,210 | ) | 3,972,543 | 39,064 | $ | 17,233,390 | |||||||||||||||||||||
| 5 |
CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the year ended March 31, | ||||||||
| 2015 | 2014 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income (loss) | $ | 855,628 | $ | (25,356,170 | ) | |||
| Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
| Bad debt direct write-off and provision | (7,461,802 | ) | 4,387,765 | |||||
| Depreciation and amortization | 2,820,489 | 3,234,169 | ||||||
| Inventory reserve and write-off | (775,660 | ) | 1,776,067 | |||||
| Agricultural inventory impairment | - | 820,637 | ||||||
| Leasehold improvement and fixed assets impairment | 1,053,765 | 480,771 | ||||||
| Impairment of intangible - license and permit | - | 1,126,981 | ||||||
| Impairment of prepayment of lease use right | - | 2,481,792 | ||||||
| Impairment of land and road improvement | - | 905,468 | ||||||
| Leasehold improvement write-off | - | 145,040 | ||||||
| Stock compensation | 1,004,487 | 748,907 | ||||||
| Change in fair value of purchase option derivative liability | 36,411 | 263,307 | ||||||
| Change in operating assets: | ||||||||
| Accounts receivable, trade | (410,498 | ) | 5,211,707 | |||||
| Notes receivable | (138,187 | ) | - | |||||
| Inventories and biological assets | (2,970,350 | ) | (2,272,013 | ) | ||||
| Other receivables | (920,961 | ) | 289,545 | |||||
| Advances to suppliers | 5,266,390 | 7,863,565 | ||||||
| Other current assets | (523,585 | ) | (420,126 | ) | ||||
| Long term deposit | 220,079 | 24,499 | ||||||
| Other noncurrent assets | 320,938 | 16,026 | ||||||
| Change in operating liabilities: | ||||||||
| Accounts payable, trade | 1,255,589 | 524,778 | ||||||
| Other payables and accrued liabilities | 929,608 | 169,752 | ||||||
| Customer deposits | 548,534 | (1,733,448 | ) | |||||
| Taxes payable | (47,657 | ) | (4,903 | ) | ||||
| Net cash provided by operating activities | 1,063,218 | 684,116 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Increase in financial assets available for sale | (1,307,200 | ) | - | |||||
| Acquisition of equipment | (1,283,997 | ) | (322,624 | ) | ||||
| Acquisition of land use right | - | (1,585,139 | ) | |||||
| Increase in intangible assets-acquisition of Sanhao Pharmacy | (1,585,118 | ) | - | |||||
| Additions to leasehold improvements | (189,135 | ) | (205,278 | ) | ||||
| Net cash (used in) investing activities | (4,365,450 | ) | (2,113,041 | ) | ||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from short-term bank loan | 32,500 | 162,600 | ||||||
| Repayment of short-term bank loan | (162,500 | ) | - | |||||
| Repayment of (Proceeds from) third parties loan | (294,405 | ) | 294,586 | |||||
| Change in restricted cash | (5,824,192 | ) | (914,044 | ) | ||||
| Proceeds from notes payable | 28,169,765 | 8,209,154 | ||||||
| Repayment of notes payable | (20,333,918 | ) | (7,704,703 | ) | ||||
| Changes in other payables-related parties | 1,280,997 | 1,159,909 | ||||||
| Net cash provided by financing activities | 2,868,247 | 1,207,502 | ||||||
| EFFECT OF EXCHANGE RATE ON CASH | 12,290 | 142,605 | ||||||
| (DECREASE) IN CASH | (421,695 | ) | (78,818 | ) | ||||
| CASH, beginning of year | 4,445,276 | 4,524,094 | ||||||
| CASH, end of year | $ | 4,023,581 | $ | 4,445,276 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for interest | $ | 56,366 | $ | 8,764 | ||||
| Cash paid for income taxes | $ | 65,567 | $ | 39,754 | ||||
| Issuance of common stocks in exchange of debts | $ | 941,613 | $ | - | ||||
| Non-cash financing activities | ||||||||
| Transfer from construction-in-progress to leasehold improvement | $ | - | $ | 111,890 | ||||
| Goods receipts against accounts receivables and offset | $ | - | $ | 5,394,919 | ||||
| 6 |
About China Jo-Jo Drugstores, Inc.
China Jo-Jo Drugstores, Inc., through its own retail drugstores, wholesale distributor and online pharmacy, is a leading retailer and wholesale distributor of pharmaceutical and healthcare products in China. As of March 31, 2015, the Company had 59 retail pharmacies in Hangzhou. The Company's wholesale subsidiary not only supplies its retail stores, but also distributes drug and other healthcare products to other drugstores and drug vendors. The Company routinely posts important information on its corporate websites at 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," "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.
Contact:
China Jo-Jo
Drugstores, Inc.
Ming Zhao, Chief Financial Officer
561-372-5555
frank.zhao@jojodrugstores.com
7