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China Jo-Jo Drugstores Inc. Reports Record Financial Results Second Quarter Fiscal 2012 And Announces Second Quarter Fiscal 2012 Conference Call

Stocks in this article: CJJD

Gross profit for the six-month period increased 45.5% to $13.1 million compared with $9.0 million a year ago. Gross margin improved from 29.2% to 30.1%, offset by Jiuxin Medicine’s wholesale activities.

Selling expense was $4.1 million versus $2.0 million in the year ago period. The increase reflected the additional 12 stores in operation from a year ago.

General and administrative expenses for the six-month period rose to $2.4 million compared with $1.5 million in the year ago period, as a result of establishing new subsidiaries and costs of being a U.S. public company.

Net income attributable to controlling interest for the six-month period was $4.9 million compared with $3.8 million a year ago. Basic and Diluted earnings per share attributable to controlling interest increased from $0.29 to $0.36.

Balance Sheet Highlights

As of September 30, 2011, the Company had $4.59 million of cash, $36.7 million in current assets and $16.4 million in current liabilities.

Conference Call Information

The Company will host a conference call to discuss second quarter results on Wednesday, Nov. 16, 2011, at 8:00 a.m. Eastern Time. To participate in the conference call, please dial 1-877-941-1429 from North America. International participants can access the call by dialing 480-629-9666. A live audio webcast of this conference call will be available under the Investors Relations section of the Company's website at http://www.chinajojodrugstores.com. A replay of the call will be available beginning on Nov. 16 approximately 11:00 a.m. Eastern Time by dialing 1-877-870-5176 or 1-858-384-5517 (international) with pin #4488487. The replay will also be available on the company website.

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
             
SEPTEMBER 30, MARCH 31,
2011 2011
 

ASSETS

 
CURRENT ASSETS
Cash $ 4,590,274 $ 6,489,905
Restricted cash 749,015 921,876
Trade accounts receivable, net 4,705,866 1,484,850
Inventories 7,529,108 4,617,420
Other receivables 1,096,201 1,049,564
Advances to suppliers 15,166,494 16,528,772
Other current assets 2,862,349   8,364,267
Total current assets 36,699,307   39,456,654
 
PROPERTY AND EQUIPMENT, net 15,470,148   5,471,432
 
OTHER ASSETS
Long term deposit 2,620,910 2,540,758
Prepaid – noncurrent 6,830,221 6,075,478
Intangible assets, net 2,866,539   390,302
Total other assets 12,317,670   9,006,538
 
Total assets $ 64,487,125   $ 53,934,624
 

LIABILITIES AND EQUITY

 
CURRENT LIABILITIES
Accounts payable, trade $ 7,275,302 $ 3,530,204
Notes payable 2,494,643 2,704,680
Other payables 1,299,284 627,734
Other payables - related parties 939,490 880,058
Customer deposits 2,770,868 2,038,608
Taxes payable 1,119,423 1,624,558
Accrued liabilities 460,152   311,639
Total current liabilities 16,359,162   11,717,481
 
Purchase option derivative liability 56,238   153,226
Total liabilities 16,415,400   11,870,707
 
COMMITMENTS AND CONTINGENCIES
 
EQUITY
Preferred stock; $0.001 par value; 10,000,000 shares authorized; nil issued and outstanding as of September 30, 2011 and March 31, 2011 - -
Common stock; $0.001 par value; 250,000,000 shares authorized; 13,548,603 and 13,530,477 shares issued and outstanding as of September 30, 2011 and March 31, 2011, respectively 13,548 13,530
Additional Paid-in capital 16,386,071 16,333,956
Statutory reserves 1,309,109 1,309,109
Retained earnings 28,163,916 23,287,474
Accumulated other comprehensive income 2,203,336   1,119,848
Total equity 48,075,980   42,063,917
 
NONCONTROLLING INTERESTS (4,255 ) -
 
Total liabilities and equity $ 64,487,125   $ 53,934,624
 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
(UNAUDITED)
       

Three months endedSeptember 30,

Six months endedSeptember 30,

2011     2010 2011     2010
REVENUES, NET $ 22,224,947 $ 15,678,170 $ 43,652,806 $ 30,885,598
 
COST OF GOODS SOLD 15,967,051 11,270,058   30,525,587 21,863,590  
 
GROSS PROFIT 6,257,896 4,408,112   13,127,219 9,022,008  
 
SELLING EXPENSES 2,711,494 1,179,515 4,089,794 2,002,873
GENERAL & ADMINISTRATIVE EXPENSES 1,320,521 757,372   2,395,304 1,531,134  
OPERATING EXPENSES 4,032,015 1,936,887   6,485,098 3,534,007  
 
INCOME FROM OPERATIONS 2,225,881 2,471,225 6,642,121 5,488,001
 
OTHER INCOME (EXPENSE), NET 187,166 5,781 206,586 (51,751 )
CHANGE IN FAIR VALUE OF PURCHASE OPTION DERIVATIVE LIABILITY 34,356 (85,993 ) 96,988 (28,049 )
 
INCOME BEFORE INCOME TAXES 2,447,403 2,391,013 6,945,695 5,408,201
 
PROVISION FOR INCOME TAXES 817,990 763,564   2,073,553 1,628,288  
 
NET INCOME 1,629,413 1,627,449 4,872,142 3,779,913
 
ADD: NET LOSS ATTRIBUTABLE TO NONCONTROLLING INTEREST 4,300 -   4,300 -  
 
NET INCOME ATTRIBUTABLE TO CONTROLLING INTEREST 1,633,713 1,627,449 4,876,442 3,779,913
 
OTHER COMPREHENSIVE INCOME

Foreign currency translation adjustments

508,923 554,610   1,083,488 654,032  
 
COMPREHENSIVE INCOME $ 2,142,636 $ 2,182,059   $ 5,959,930 $ 4,433,945  
 
WEIGHTED AVERAGE NUMBER OF SHARES
Basic 13,547,157 13,500,002   13,541,136 13,079,237  
Diluted 13,547,157 13,504,247   13,541,136 13,086,959  
 
EARNINGS PER SHARES
Basic - attributable to controlling interest $ 0.12 $ 0.12   $ 0.36 $ 0.29  
Diluted - attributable to controlling interest $ 0.12 $ 0.12   $ 0.36 $ 0.29  
 

CHINA JO-JO DRUGSTORES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
           
Six months ended
September 30,
2011     2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 4,872,142 $ 3,779,913
Adjustments to reconcile net income to net cash
(used in) provided by operating activities:
Depreciation and amortization 1,118,932 404,080
Stock compensation 52,133 58,615
Bad debt expense 182,398 -
Change in fair value of purchase option derivative liability (96,988 ) 28,049
Changes in operating assets:
Accounts receivable, trade (2,435,921 ) (353,528 )
Inventories 1,282,841 (766,479 )
Other receivables (523,817 ) (157,814 )
Advances to suppliers 2,173,332 (3,347,523 )
Other current assets 5,610,337 (755,209 )
Long term deposit (18,485 ) -
Prepaid - noncurrent 106,115 (418,806 )
Changes in operating liabilities:
Accounts payable, trade 4,279,623 2,217,876
Other payables and accrued liabilities (1,046,197 ) (336,074 )
Customer deposit 676,373 -
Taxes payable (495,891 ) (195,176 )
Net cash provided by operating activities 15,736,927   157,924  
 
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment (2,155,443 ) (206,478 )
Advance payments on equipment purchase (774,500 ) -
Additions to leasehold improvements (1,373,605 ) (503,219 )
Payments on construction-in-progress (6,729,437 ) -
Net payment for business acquisitions (3,282,727 ) -  
Net cash used in investing activities (14,315,712 ) (709,697 )
 
CASH FLOWS FROM FINANCING ACTIVITIES:
Change in restricted cash 193,300 (201,092 )
Payments on notes payable (3,703,942 ) (1,470,429 )
Proceeds from shareholder 58,862 -
Proceeds from equity financing - 15,708,608
Proceeds from short-term loans - (883,920 )
Payments on other payables-related parties -   (54,942 )
Net cash (used in) provided by financing activities (3,451,780 ) 13,098,225  
 
EFFECT OF EXCHANGE RATE ON CASH 130,934   196,988  
 
(DECREASE) INCREASE IN CASH (1,899,631 ) 12,743,440
 
CASH, beginning of period 6,489,905   801,593  
 
CASH, end of period $ 4,590,274   $ 13,545,033  
 
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest $ -   $ 23,587  
Cash paid for income taxes $ 2,428,768   $ 1,700,826  
Non-cash financing activities
Notes payable transferred to accounts payable vendors $ 3,431,091   $ 1,892,631  
 




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