China Jo-Jo Drugstores Reports Fiscal Year 2022 Financial Results

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


 

 

View original content:https://www.prnewswire.com/news-releases/china-jo-jo-drugstores-reports-fiscal-year-2022-financial-results-301595017.html


Source: China Jo-Jo Drugstores, Inc. Related Stocks: NASDAQ:CJJD
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