China Jo-Jo Drugstores Reports Fiscal 2017 First Quarter Results

China Jo-Jo Drugstores, Inc. (CJJD) yesterday announced financial results for its first fiscal quarter ended June 30, 2016.

FY 2017 First Quarter Highlights:

• Revenue was $20.9 million compared to $21.3 million a year ago

• Gross profit increased 2.4% year-over-year to $4.5 million

• Gross margin increased 90bps year-over-year to 21.4%, retail pharmacy gross margin increased 280 bps to 28.5% from a year ago

• GAAP net income was $131,153 or $0.01 per diluted share compared to net income of $110,611 or $0.01 per diluted share a year ago

• Adjusted net income was $754,000 or $0.04 per diluted share compared to adjusted net income of $277,481 or $0.02 per diluted share a year ago

China Jo-Jo’s Chairman and CEO, Mr. Liu Lei commented, “Our results in the first quarter were temporarily impacted by lower pharmacy traffic due to preparation for the G20 summit in Hangzhou, and the unexpected disruption in the Yikatong referral business. We are proactively seeking referral arrangement with alternative providers of Pharmacy Benefit Management. We remain focused on increasing our gross margin and expanding the online and offline integration of our wellness offerings.”

Net revenues for the quarter were $20.9 million compared to $21.3 million in the same quarter a year ago, a decrease of $375, 377 or 1.8%. Retail drugstores sales were $12.7 million and increased 4.4% compared to the prior year period. The Company continues to launch in-pharmacy virtual doctor clinics, provide access to mobile payment and implement other operational strategies to promote same store growth. The pharmacy store count increased to 61 as of June 30, 2016, compared to 59 stores a year ago.

Online pharmacy sales for the quarter were $5.1 million compared to $6.0 million in the same quarter a year ago, a decrease of $894,689 or 15.0%. The decrease was mainly due to the decline in referral transactions from Yikatong on the Company’s own online pharmacy website. Excluding the RMB depreciation, sales via e-commerce platforms increased by 6.0% year over year. The Company is proactively seeking referral arrangements with alternative providers of Pharmacy Benefit Management.

Net income was $131,153 or $0.01 per diluted share compared to last year’s first quarter net income of $110,611 or $0.01 per diluted share.

Adjusted net income was $754,000 or $0.04 per diluted share compared to last year’s first quarter adjusted net income of $277,481 million or $0.02 per diluted share.