SHENZHEN, China, Sept. 2, 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 second quarter ended
June 30, 2015.
Financial Highlights
For the quarter ended June 30,
2015:
- Revenue increased by 12.9% to RMB775.1
million (US$125.0 million)
compared to RMB686.6 million in the
second quarter of 2014
- Same store sales increased by 16.7% compared to the second
quarter of 2014
- Net income was RMB8.7 million
(US$1.4 million) compared to a net
loss of RMB15.9 million in the second
quarter of 2014.
Ms. Rebecca Zhang, Chief
Executive Officer, commented: "Our accelerated same-store-sales
growth propelled the increase in our revenue. We are encouraged by
higher store traffic as a result of our effective promotions on
pharmaceutical products and professional store service training.
While we focus on productivity at the store level, we also managed
to achieve better operational efficiency by reducing our general
and administrative expenses and constantly optimizing our store
management."
Second Quarter Results
During the second quarter of 2015, the Company opened 38 new
stores and closed 59 stores. As of June 30,
2015, the Company had 1,948 directly operated stores in
total.
Revenue for the second quarter of 2015 increased by 12.9% to
RMB775.1 million (US$125.0 million) from RMB686.6 million for the same period in 2014.
Same store sales (for the 1,768 stores opened before December 31, 2013 and which were still operating
as of June 30, 2015) for the second
quarter increased by 16.7% compared to the same period in 2014. The
increase in same store sales was primarily due to in-store
promotional initiatives and marketing of pharmaceutical
products.
In the second quarter of 2015, the Company's revenue by product
contribution was 23.1% attributable to prescription drugs (23.9%
for the same period in 2014), 41.4% attributable to
over-the-counter ("OTC") drugs (39.0% for the same period in 2014),
18.7% attributable to convenience and other products (18.8% for the
same period in 2014), 12.1% attributable to nutritional supplements
(14.8% for the same period in 2014), and 4.7% attributable to
herbal products (3.5% for the same period in 2014).
The Company's gross profit increased by 5.7% to RMB309.5 million (US$49.9
million) for the second quarter of 2015 from RMB292.9 million for the same period in 2014.
Gross margin in the second quarter of 2015 was 39.9%, compared with
42.7% for the same period in 2014. The year-over-year decrease in
gross margin was primarily the result of proactive promotional
activities on pharmaceutical products.
The Company's portfolio of private label products included 2,155
types of products as of June 30,
2015. Sales of private label products represented
approximately 14.7% of the Company revenue and 22.0% of the gross
profit for the second quarter of 2015.
Sales, marketing and other operating expenses as a percentage of
revenue decreased to 35.7% for the second quarter of 2015 from
39.0% for the same period in 2014, as the steady growth in revenue
outpaced the increases in sales, marketing and other operation
expenses.
General and administrative expenses as a percentage of revenue
were also reduced to 3.8% for the second quarter of 2015, from 4.6%
for the second quarter of 2014. This was primarily due to the
improvements in management efficiency.
During the second quarter of 2015, the Company recognized an
impairment loss of RMB4.6 million
(US$0.7 million), compared to
RMB5.2 million for the same period in
2014, representing the reduction of the carrying amount of the
property and equipment of certain underperforming stores.
Loss from operations in the second quarter of 2015 was
RMB1.6 million (US$0.3 million) compared to loss from operations
of RMB11.5 million in the same period
of 2014. The loss from operations was mainly due to the lower gross
margin.
Interest income for the second quarter of 2015 was RMB1.9 million (US$0.3
million), compared to RMB1.9
million for the same period in 2014.
Dividend income from cost method investments for the second
quarter of 2015 was RMB2.9 million
(US$0.5 million) compared to
RMB 0.9 million for the same period
in 2014.
Income before income tax expense for the second quarter of 2015
was RMB3.3 million (US$0.5 million), while we suffered a loss before
income tax expense of RMB8.7 million
for the same period in 2014.
The Company recorded a net income tax benefit (credit) of
RMB5.5 million (US$0.9 million) for the second quarter of 2015,
compared to an income tax expense of RMB7.2
million for the same period in 2014. The change included the
decreases in the amounts of valuation allowance for certain
subsidiaries with improving operating results and certain prior
year unrecognized tax benefits being recognized during the current
period when the recognition threshold was met..
Net income for the second quarter of 2015 was RMB8.7 million (US$1.4
million), or RMB0.09
(US$0.01) basic and diluted income
per ADS, compared to a net loss of RMB15.9
million, or RMB0.16 basic and
diluted losses per ADS for the second quarter of 2014. As of
June 30, 2015, the Company had 197.4
million outstanding ordinary shares. Each ADS represents two
ordinary shares of the Company.
In the second quarter of 2015, net cash inflow from operating
activities was RMB12.0 million
(US$1.9 million), compared to net
cash outflow of RMB79.0 million for
the same period in 2014, as a result of our growth in net profit,
as well as the utilization of prepayments made to suppliers.
As of June 30, 2015, the Company's
total cash, cash equivalents, short-term and long-term bank
deposits and restricted cash were RMB349.6
million (US$56.4 million) and
its shareholders' equity was RMB836.9
million (US$135.0 million),
compared to RMB316.9 million and
RMB831.6 million, respectively, as of
December 31, 2014.
Business Outlook
"As we gradually achieve recovery in growth on profit, we will
focus on accelerating our organic revenue growth by fine-tuning our
store management system and improving our store image to
customers," Ms. Zhang concluded.
Conference Call Information
The Company will host a conference call, to be simultaneously
webcasted, on Wednesday, September 2,
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 webcast of the conference call will be
available on Nepstar's website at www.nepstar.cn.
A replay of the call will be available shortly after the
conclusion of the conference call through September 9, 2015 at11:59 p.m. Eastern Time. An
archived webcast of the conference call will be available on
Nepstar's 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 13617349.
About China Nepstar Chain Drugstore
Ltd.
China Nepstar Chain Drugstore Ltd. (NYSE: NPD) is a leading
retail drugstore chain in China.
As of June 30, 2015, the Company had
1,948 directly operated stores across 72 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 of US$1.00 = RMB6.2000
on June 30, 2015 as set forth in the
H.10 weekly statistical release of the Federal Reserve Board. No
representation is made that the RMB amounts could have been, or
could be, converted into US$ at that rate on June 30, 2015, 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
(Tables Follow)
China Nepstar
Chain Drugstore Ltd.
|
Unaudited Condensed
Consolidated Statements of Comprehensive Income/Loss
|
(amounts in
thousands – except per-share and per-ADS data)
|
|
|
|
Three-month period
ended
|
June
30,
|
|
2014
|
2015
|
2015
|
|
RMB
|
RMB
|
USD
|
|
|
|
|
Revenue
|
686,553
|
775,083
|
125,013
|
Cost of goods
sold
|
(393,606)
|
(465,627)
|
(75,101)
|
Gross
profit
|
292,947
|
309,456
|
49,912
|
Sales, marketing and
other operating expenses
|
(267,539)
|
(276,719)
|
(44,632)
|
General and
administrative expenses
|
(31,703)
|
(29,741)
|
(4,797)
|
Impairment losses of
property and equipment
|
(5,182)
|
(4,555)
|
(734)
|
Loss from
operations
|
(11,477)
|
(1,559)
|
(251)
|
Interest
income
|
1,863
|
1,944
|
313
|
Dividend income from
cost method investments
|
920
|
2,881
|
465
|
(Loss)/income before
income tax expense
|
(8,694)
|
3,266
|
527
|
Income tax
expense
|
(7,201)
|
5,451
|
879
|
Net(loss)/income
|
(15,895)
|
8,717
|
1,406
|
|
|
|
|
Basic and
diluted(loss)/income per ordinary share
|
(0.081)
|
0.044
|
0.007
|
Basic and diluted
(loss)/income per ADS
|
(0.162)
|
0.088
|
0.014
|
|
|
|
|
Net
(loss)/income
|
(15,895)
|
8,717
|
1,406
|
|
|
|
|
Other comprehensive
income/(loss), net of tax:
|
|
|
|
Foreign currency
translation adjustments
|
25
|
(13)
|
(2)
|
Comprehensive(loss)/income
|
(15,870)
|
8,704
|
1,404
|
China Nepstar
Chain Drugstore Ltd.
|
Unaudited Condensed
Consolidated Balance Sheets
|
(amounts in
thousands)
|
|
|
|
|
|
|
|
As
of
|
|
As
of
|
|
As
of
|
December
31,
|
|
June
30,
|
|
June
30,
|
|
2014
|
|
2015
|
|
2015
|
|
RMB
|
|
RMB
|
|
USD
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
Cash and cash
equivalents
|
252,174
|
|
300,219
|
|
48,422
|
Short-term bank time
deposits
|
24,000
|
|
9,000
|
|
1,451
|
Long-term bank time
deposits due within one year
|
3,256
|
|
3,256
|
|
525
|
Restricted
cash
|
37,423
|
|
37,124
|
|
5,988
|
Accounts receivable,
net of allowance for doubtful accounts
|
136,568
|
|
130,087
|
|
20,982
|
Bills
receivable
|
400
|
|
122
|
|
20
|
Amounts due from
related parties
|
3,366
|
|
4,772
|
|
770
|
Prepaid expenses,
deposits and other current assets
|
245,254
|
|
179,284
|
|
28,917
|
Inventories
|
546,312
|
|
577,386
|
|
93,127
|
Deferred tax
assets
|
2,038
|
|
4,993
|
|
805
|
Total current
assets
|
1,250,791
|
|
1,246,243
|
|
201,007
|
|
|
|
|
|
|
Non-current
assets
|
|
|
|
|
|
Property and
equipment, net
|
137,750
|
|
145,602
|
|
23,484
|
Rental
deposits
|
42,257
|
|
41,916
|
|
6,761
|
Cost method
investments
|
12,638
|
|
12,638
|
|
2,038
|
Intangible assets,
net
|
2,509
|
|
2,509
|
|
405
|
Goodwill
|
51,819
|
|
51,819
|
|
8,358
|
Deferred tax
assets
|
16,340
|
|
15,404
|
|
2,484
|
Other non-current
assets
|
-
|
|
35,445
|
|
5,717
|
Total non-current
assets
|
263,313
|
|
305,333
|
|
49,247
|
Total
assets
|
1,514,104
|
|
1,551,576
|
|
250,254
|
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
Accounts
payable
|
409,428
|
|
451,827
|
|
72,875
|
Amounts due to
related parties
|
25,636
|
|
26,217
|
|
4,229
|
Accrued expenses and
other payables
|
122,236
|
|
113,565
|
|
18,317
|
Income tax
payable
|
25,743
|
|
20,271
|
|
3,270
|
Deferred
income
|
25,715
|
|
34,312
|
|
5,534
|
Total current
liabilities
|
608,758
|
|
646,192
|
|
104,225
|
|
|
|
|
|
|
Non-current
liabilities
|
|
|
|
|
|
Deferred
income
|
15,677
|
|
13,253
|
|
2,137
|
Deferred tax
liabilities
|
14,711
|
|
15,233
|
|
2,457
|
Other non-current
liabilities
|
43,326
|
|
39,949
|
|
6,443
|
Total non-current
liabilities
|
73,714
|
|
68,435
|
|
11,037
|
Total
liabilities
|
682,472
|
|
714,627
|
|
115,262
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
|
Share
capital
|
158
|
|
158
|
|
25
|
Additional paid-in
capital
|
640,341
|
|
640,341
|
|
103,281
|
Accumulated other
comprehensive loss
|
(41,746)
|
|
(41,753)
|
|
(6,734)
|
Retained
earnings
|
232,879
|
|
238,203
|
|
38,420
|
Total shareholders'
equity
|
831,632
|
|
836,949
|
|
134,992
|
|
|
|
|
|
|
Total liabilities
and shareholders' equity
|
1,514,104
|
|
1,551,576
|
|
250,254
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/china-nepstar-chain-drugstore-ltd-reports-second-quarter-2015-financial-results-300136726.html
SOURCE China Nepstar Chain Drugstore Ltd.