CHINA NEPSTAR CHAIN DRUGSTORE LTD.(ADR) In the news release, China Nepstar Chain Drugstore Ltd. Reports First Quarter 2015 Financial Results, issued
China Nepstar Chain Drugstore Ltd. Reports First Quarter 2015 Financial Results
SHENZHEN, China, May 26, 2015 /PRNewswire/ -- China Nepstar Chain Drugstore Ltd. (NYSE: NPD) ("Nepstar" or the "Company"), a leading retail drugstore chain in China based on the number of directly operated stores, today announced its unaudited financial results for the first quarter ended March 31, 2015.
Financial Highlights
-- Same store sales increased by 13.6% compared to the first quarter of
2014
-- Revenue increased by 11.9% to RMB759.1 million (US$122.5 million)
compared to RMB678.3 million in the first quarter of 2014
-- Net loss decreased to RMB3.4 million (US$0.5 million) from a net loss
of RMB18.2 million in the first quarter of 2014
-- Basic and diluted losses per ADS were RMB0.03 (US$0.006) compared to
basic and diluted losses per ADS of RMB0.18 in the first quarter of 2014
Ms. Rebecca Yingnan Zhang, Chief Executive Officer of Nepstar, "We are pleased to report strong growth in same store sales and revenue, as well as significant improvement in reducing administrative expenses compared to the same period of last year. We have leveraged our store network and increased in-store promotions as well as marketing efforts for pharmaceutical products. Enhancement in our operating efficiencies and cost streamlining also contributed to the growth in sales and revenue as well as improvement in administrative expense reduction as compared to the first quarter of 2014."
First Quarter Results
During the first quarter of 2015, the Company opened 26 new stores and closed 37 stores. As of March 31, 2015, the Company had a total of 1,969 directly operated stores.
Revenue for the first quarter of 2015 increased by 11.9% to RMB759.1 million (US$122.5million) from RMB678.3 million for the same period in 2014. Same store sales (for the 1,819 stores opened before December 31, 2013 and which remained in operation as of March 31, 2015) for the first quarter of 2015 increased by 13.6% compared to the same period in 2014. The increases in revenue and same store sales were mainly due to our increased in-store promotional initiatives and marketing of pharmaceutical products.
First quarter revenue contribution by product category was 23.7% from prescription drugs (23.3% for the same period in 2014); 41.2% from over-the-counter ("OTC") drugs (40.3% for the same period in 2014); 12.3% from nutritional supplements (14.8% for the same period in 2014); 4.6% from herbal products (4.5% for the same period in 2014); and 18.2% from convenience and other products (17.1% for the same period in 2014).
First quarter gross profit increased to RMB309.4 million (US$49.9 million) from RMB278.4 million in the same period of 2014. Gross profit margin in the first quarter of 2015 was 40.8%, compared with 41.0% in the same period of 2014.
The Company's portfolio of private label products expanded to 2,146 types of products as of March 31, 2015. Sales of private label products represented approximately 15.4% of total revenue and 22.7% of total gross profit for the first quarter of 2015.
Sales, marketing and other operating expenses slightly increased for the first quarter of 2015 compared to the same period of 2014, but its percentage as of revenue decreased to 36.5% from 39.9%.
General and administrative expenses as a percentage of revenue were 4.3% for the first quarter of 2015 compared to 5.4% for the same period of 2014. This decrease primarily resulted from management's efforts to streamline costs.
Loss from operations in the first quarter of 2015 was RMB0.2 million (US$30.5 thousand) compared with loss from operations of RMB28.8 million in the same period of 2014.The significant reduction in loss was mainly due to increased sales and our cost control measures in the first quarter of 2015.
Interest income for the first quarter of 2015 was RMB1.7 million (US$0.3 million), compared with RMB2.5 million for the same period of 2014.
The Company's income tax expense was RMB6.8 million (US$1.1 million) for the first quarter of 2015, compared with tax credit of RMB3.1 million for the same period in 2014.The effective tax rate for the first quarter of 2015 was 198.6%. The difference in the effective income tax rate and the PRC statutory tax rate of 25% applicable to our major operating subsidiaries was primarily due to non-deductible expenses and the operating losses from certain loss-making subsidiaries, for which full valuation allowances were made on their deferred tax assets, when compared to the overall results of operation of the Company. Shareholders are reminded that in the PRC, losses in companies which are part of a group are not allowed to be off-set against profits arising from other companies in the same group.
Net loss for the first quarter of 2015 was RMB3.4 million (US$0.5 million), or RMB0.03 (US$0.006) basic and diluted losses per ADS, compared to net loss of RMB18.2 million, or RMB0.18 basic and diluted losses per ADS for the first quarter of 2014. As of March 31, 2015, the Company had 197.4 million outstanding ordinary shares. Each ADS represents two ordinary shares of the Company.
In the first quarter of 2015, net cash flow provided by operating activities was RMB51.9 million (US$8.4 million), compared to net cash outflow of RMB22.6 million for the same period in 2014. This reversal of cash outflow was primarily due to improved operating performance during the first quarter of 2015, compared to the same period in 2014.
As of March 31, 2015, the Company's total cash, cash equivalents, bank deposits and restricted cash were RMB327.9 million (US$52.9 million) and its shareholders' equity was RMB828.2 million (US$133.6 million), compared to RMB316.9 million and RMB831.6 million, respectively, as of December 31, 2014.
Business Outlook
"We are excited by the momentum in our business development in the first quarter of 2015 and will continue to focus on maintaining growth, managing expenses and improving margins. We believe that our strong store network, optimized product offerings and proactive steps to improve customer experience and loyalty, will continue to drive store traffic and revenue in the near term," commented Ms. Zhang.
Conference Call Information
The Company will host a conference call, to be simultaneously webcasted, on Tuesday, May 26, 2015 at 8:00 a.m. Eastern Time / 8:00 p.m. Beijing Time. Interested parties may participate in the conference call by dialing +1-877-407-9210 (North America) or +1-201-689-8049 (International) approximately five minutes before the call start time. A live web cast of the call will be available on the Nepstar website at www.nepstar.cn.
A replay of the call will be available shortly after the conclusion of the conference call through June 2, 2015 at 11:59 p.m. Eastern Time. An archived web cast of the conference call will be available on the Nepstar website at http://www.nepstar.cn. Interested parties may access the replay by dialing +1-877-660-6853 (North America) or +1-201-612-7415 (International) and entering conference ID number 13609556.
About China Nepstar Chain Drugstore Ltd.
China Nepstar Chain Drugstore Ltd. (NYSE: NPD) is a leading retail drugstore chain in China. As of March 31, 2015, the Company had 1,969 directly operated stores across 74 cities, one headquarter distribution center and 15 regional distribution centers in China. Nepstar uses directly operated stores, centralized procurement and a network of distribution centers to provide its customers with high-quality, professional and convenient pharmaceutical products and services and a wide variety of other merchandise, including OTC drugs, nutritional supplements, herbal products, personal care products, family care products, and convenience products. Nepstar's strategy of centralized procurement, competitive pricing, customer loyalty programs and private label offerings has enabled it to capitalize on the continuing economic growth in China and take advantage of the demographic trend in China to achieve a strong brand and leading market position. For further information, please go to http://www.nepstar.cn.
Safe Harbor Statement
This press release contains forward-looking statements. These statements constitute "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "will," "expects," "anticipates," "future," "intends," "plans," "believes," "estimates" and similar statements. Among other things, the quotations from management in this press release and the Company's strategic operational plans and business outlook, contain forward-looking statements. Such statements involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking statements. Further information regarding these and other risks is included in the Company's filings with the U.S. Securities and Exchange Commission, including its annual report on Form 20-F. The Company does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
Exchange Rate Information
The United States dollar (US$) amounts disclosed in this press release are presented solely for the convenience of the reader. Translations of amounts from RMB into United States dollars were calculated at the certified exchange rate ofUS$1.00 = RMB6.1990 on March 31, 2015 as set forth in the H.10 weekly statistical release of the Federal Reserve Board. No representation is made that the RMB amounts could have been, or could be, converted into US$ at that rate or at any other date. The percentages stated are calculated based on RMB amounts.
Contacts
Zixin Shao
China Nepstar Chain Drugstore Ltd.
Chief Financial Officer
+86-755-2641-4065
ir@nepstar.cn
Shiwei Yin
Grayling
Investor Relations
+1-646-284-9474
npd@grayling.com
(Tables Follow)
China Nepstar Chain Drugstore Ltd.
Unaudited Condensed Consolidated Statements of Operation
(amounts in thousands - except per-share and per-ADS data)
Three-month period ended
March 31,
2014 2015 2015
RMB RMB USD
Revenue 678,281 759,119 122,458
Cost of goods sold (399,904) (449,769) (72,555)
-------- -------- -------
Gross profit 278,377 309,350 49,903
Sales, marketing and
other operating
expenses (270,760) (277,203) (44,717)
General and
administrative
expenses (36,378) (32,336) (5,216)
Loss from operations (28,761) (189) (30)
Interest income 2,529 1,719 277
Dividend income from
cost method
investments 4,932 1,022 165
Other income - 890 143
(Loss)/income before
income tax expense (21,300) 3,442 555
Income tax benefit/
(expense) 3,111 (6,835) (1,103)
Net loss (18,189) (3,393) (548)
======= ====== ====
Basic losses per
ordinary share (0.092) (0.017) (0.003)
Basic losses per ADS (0.184) (0.034) (0.006)
Diluted losses per
ordinary share (0.092) (0.017) (0.003)
Diluted losses per
ADS (0.184) (0.034) (0.006)
====== ====== ======
Net loss (18,189) (3,393) (548)
Other comprehensive (loss)/income, net of tax:
Foreign currency
translation
adjustments (161) 6 1
Comprehensive loss (18,350) (3,387) (547)
======= ====== ====
China Nepstar Chain Drugstore Ltd.
Unaudited Condensed Consolidated Balance Sheets
(amounts in thousands)
As of As of As of
December
31, March 31, March 31,
2014 2015 2015
RMB RMB USD
ASSETS
Current assets
Cash and cash
equivalents 252,174 278,240 44,885
Short-term bank time
deposits 24,000 9,000 1,452
Long-term bank time
deposits due within
one year 3,256 3,256 525
Restricted cash 37,423 37,355 6,026
Short-term
investments - 27,000 4,356
Accounts receivable,
net of allowance for
doubtful accounts 136,568 126,581 20,420
Bills receivable 400 - -
Amounts due from
related parties 3,366 4,035 651
Prepaid expenses,
deposits and other
current assets 245,254 207,292 33,439
Inventories 546,312 554,826 89,502
Deferred tax assets 2,038 3,611 582
----- ----- ---
Total current assets 1,250,791 1,251,196 201,838
--------- --------- -------
Non-current assets
Property and
equipment, net 137,750 141,735 22,864
Rental deposits 42,257 41,315 6,665
Cost method
investments 12,638 12,638 2,039
Intangible assets,
net 2,509 2,509 405
Goodwill 51,819 51,819 8,359
Deferred tax assets 16,340 14,990 2,418
------ ------ -----
Total non-current
assets 263,313 265,006 42,750
------- ------- ------
Total assets 1,514,104 1,516,202 244,588
========= ========= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable 409,428 430,160 69,392
Amounts due to
related parties 25,636 24,489 3,950
Accrued expenses and
other payables 122,236 102,680 16,564
Income tax payable 25,743 27,792 4,484
Deferred income 25,715 30,704 4,953
------ ------ -----
Total current
liabilities 608,758 615,825 99,343
------- ------- ------
Non-current liabilities
Deferred income 15,677 14,326 2,311
Deferred tax
liabilities 14,711 14,308 2,308
Other non-current
liabilities 43,326 43,498 7,017
------ ------ -----
Total non-current
liabilities 73,714 72,132 11,636
------ ------ ------
Total liabilities 682,472 687,957 110,979
------- ------- -------
Shareholders' equity
Share capital 158 158 25
Additional paid-in
capital 640,341 640,341 103,297
Accumulated other
comprehensive loss (41,746) (41,740) (6,733)
Retained earnings 232,879 229,486 37,020
------- ------- ------
Total shareholders'
equity 831,632 828,245 133,609
------- ------- -------
Total liabilities and
shareholders' equity 1,514,104 1,516,202 244,588
========= ========= =======
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/china-nepstar-chain-drugstore-ltd-reports-first-quarter-2015-financial-results-300088150.html
SOURCE China Nepstar Chain Drugstore Ltd.
