TIANJIN, China, April 16, 2021 /PRNewswire/ -- MDJM LTD (Nasdaq:
MDJH) (the "Company" or "MDJH"), a real estate services company in
China, today announced its
financial results for the fiscal year ended
December 31, 2020.
Fiscal Year 2020 Financial Highlights
|
|
For the Years
Ended December 31,
|
($'000, except per
share data)
|
|
2020
|
|
2019
|
|
%
Change
|
Revenue
|
|
$5,869
|
|
$5,680
|
|
3.3%
|
Operating
expenses
|
|
$5,628
|
|
$5,321
|
|
5.8%
|
Income from
operations
|
|
$241
|
|
$359
|
|
-32.8%
|
Operating profit
margin
|
|
4.1%
|
|
6.3%
|
|
-2.2%
|
Net income
attributable to MDJH ordinary shareholders
|
|
$258
|
|
$453
|
|
-43.1%
|
Earnings per
share
|
|
$0.02
|
|
$0.04
|
|
-50.0%
|
|
|
|
|
|
|
|
- Revenue increased by 3.3% to $5.87
million for 2020, primarily attributable to the improvement
of our commission rate in 2020.
- Operating expenses increased by 5.8% to $5.63 million for 2020. The increase was
primarily related to an increase in payroll expenses that offset
the decrease in selling expenses, professional fees, operating
lease expense, and other general and administrative expenses.
- Operating profit margin was 4.1% for 2020, compared to 6.3% for
the same period of last year.
- Net income was $0.25 million for
2020, compared to $0.30 million for
the same period of last year.
- Net income attributable to MDJH ordinary shareholders was
$0.26 million, or earnings per share
of $0.02, for 2020, compared to
$0.45 million, or earnings per share
of $0.04, for the same period of last
year.
Mr. Siping Xu, Chairman and Chief
Executive Officer of the Company, commented, "With revenue
increasing by 3.3% year-over-year, our full-year 2020 financial
results underscore continued strength in our primary real estate
agency services business despite the negative impact of the
COVID-19 pandemic on our operations and the overall economy.
However, our profit margin and net income decreased as a result of
the increased operating expenses. We continued our planned
geographical expansion, with Chengdu, Suzhou, and Yangzhou markets
contributing 35% of our total revenue in 2020, while closely
monitoring opportunities entering into other geographic markets.
Looking ahead, we are cautiously optimistic about 2021 as the
Chinese economy, particularly its housing market, recovers from the
pandemic."
Full Year 2020 Financial Results
Revenue
For 2020, revenue increased by $0.19
million, or 3.3%, to $5.87
million from $5.68 million for
the same period of last year. The increase in revenue was primarily
attributable to the improvement of our commission rate in 2020.
Primary real estate agency services and consulting and other
services accounted for 98.2% and 1.8% of revenue, respectively, for
2020, compared to 97.1% and 2.9%, respectively, for the same period
of last year. On a geographical basis, revenue from primary real
estate agency services in Tianjin,
Chengdu, Yangzhou, and Suzhou
accounted for 65%, 30%, 2%, and 3% of the primary real estate
agency service revenue, respectively, for 2020, compared to 83%,
5%, 9%, and 3%, respectively, for the same period of last
year.
Operating Expenses
|
For the Years
Ended December 31,
|
($'000)
|
2020
|
|
2019
|
|
%
Change
|
Selling
expenses
|
$
|
95
|
|
$
|
187
|
|
-49.0%
|
Payroll, payroll
taxes and others
|
|
4,669
|
|
|
3,711
|
|
25.8%
|
Professional
fees
|
|
405
|
|
|
634
|
|
-36.2%
|
Operating lease
expense
|
|
117
|
|
|
185
|
|
-36.9%
|
Depreciation and
amortization
|
|
22
|
|
|
15
|
|
44.9%
|
Provision (reduction)
for doubtful accounts, net
|
|
4
|
|
|
(39)
|
|
-109.7%
|
Other general and
administrative
|
|
317
|
|
|
629
|
|
-49.6%
|
Total operating
expenses
|
$
|
5,628
|
|
$
|
5,321
|
|
-5.8%
|
Selling expenses decreased by $0.09
million, or 49.0%, to $0.10
million for 2020 from $0.19
million for the same period of last year. The decrease in
selling expenses was attributable to reduced selling activities in
the first half of 2020 due to the impact of the Covid-19
pandemic.
Payroll, payroll taxes and others increased by $0.96 million, or 25.8%, to $4.67 million for 2020 from $3.71 million for the same period of last year.
Our employee compensation was based on sales performance, and our
sales related compensation, such as bonuses and commission,
increased primarily due to the increase of our revenue in 2020.
Professional fees were $0.40
million for 2020, compared to $0.63 for the same period of last year.
Professional fees consist of attorney, audit, investor
relationship, and other expenses. The decrease in professional fees
was due to the Company incurring the majority of its expenses
associated with its initial public offering in 2019.
Operating lease expenses decreased by $0.07 million, or 36.9%, to $0.12 million for 2020 from $0.18 million for the same period of last year.
Currently, the Company has one long-term lease, which became
effective on January 1, 2019, and
will expire on December 31, 2023.
Depreciation and amortization expenses were $21,966 for 2020, compared to $15,180 for the same period of last year. The
increase in depreciation and amortization expenses was a result of
new equipment purchased for $13,416
and $66,354 in 2020 and 2019,
respectively.
Changes in allowance for doubtful accounts was an increase of
$3,786 for 2020, compared to the net
decrease of $38,883 for the same
period of last year.
Other general and administrative expenses decreased by
$0.31 million, or 49.6%, to
$0.32 million for 2020 from
$0.63 million for the same period of
last year.
As a result, total operating expenses increased by $0.31 million, or 5.8%, to $5.63 million for 2020 from $5.32 million for the same period of last
year.
Operating Income (Loss)
Income from operations was $0.24
million for 2020, compared to $0.36
million for the same period of last year.
The operating profit margin was 4.1% for 2020, compared to 6.3%
for the same period of last year. The decrease in operating margin
was due to the increases in operating expenses as discussed
above.
Other Income
Total other income, including government grants, interest
income, and other income (expenses), was $45,935 for 2020, compared to $42,176 for the same period of last year.
Income before Income Tax
Income before income tax was $0.29
million for 2020, compared to $0.40
million for the same period of last year.
The Company incurred income tax of $0.03
million for 2020, compared to $0.10
million for the same period of last year.
Net Income
Net income was $0.25 million for
2020, compared to $0.30 million for
the same period of last year. After deduction of non-controlling
interest, net income attributable to MDJH ordinary shareholders was
$0.26 million, or earnings per share
of $0.02, for 2020, compared to
$0.45 million, or earnings per share
of $0.04, for the same period of last
year.
Financial Conditions
As of December 31, 2020, the
Company had cash and cash equivalents of $6.11 million, compared to $6.55 million as of December 31, 2019. Account receivable was
$4.06 million as of December 31, 2020, compared to $2.16 million as of December 31, 2019. As of December 31, 2020, the Company had current assets
of $10.29 million and current
liabilities of $1.48 million, leading
to working capital of $8.81 million,
compared to current assets, current liabilities, and working
capital of $8.84 million,
$0.69 million and $8.15 million, respectively, as of December 31, 2019.
Net cash used in operating activities was $0.60 million for 2020, compared to $1,501 for the same period of last year. Net cash
provided by investing activities was $1,076 for 2020, compared to net cash used in
investing activities of $0.19 million
for the same period of last year. Net cash provided by financing
activities was $0.11 million for
2020, compared to $0.07 million for
the same period of last year.
Recent Developments
Because of the quarantines and travel restrictions mandated by
the Chinese government in response to the COVID-19 pandemic, from
the end of January to mid-March of 2020, many real estate projects
the Company was promoting and selling were suspended, which
adversely impacted its business during that period. However,
because the Company's operating income and earnings have
historically been lower during the first quarter than other
quarters due to the winter and the Chinese New Year holiday period,
the Company believes this seasonality partially mitigated the
adverse impact on its full-year operating results. Starting from
the end of March 2020, these real
estate projects began to reopen. Although the Company believes its
operations have resumed to the level prior to the COVID-19 outbreak
and expects to continue its normal business operations going
forward, any future development of the COVID-19 outbreak may
further impact the Company's operations. If a new wave of the
COVID-19 outbreak were to occur in the autumn and winter seasons,
it could have a material adverse effect on the Company's business,
results of operations, financial condition, and cash flows.
About MDJM LTD
With branch offices in Tianjin,
Chengdu, Suzhou, and Yangzhou,
China, MDJM provides primary real
estate agency services to, as well as real estate consulting and
independent training services to real estate developer clients. The
Company also provides tourism development services, including real
estate marketing and planning services, real estate agency
services, and advertisement planning services. For more information
regarding the Company, please visit: http://ir.mdjhchina.com.
Forward-Looking Statements
This press release contains forward-looking statements. All
statements other than statements of historical fact in this press
release are forward-looking statements. These forward-looking
statements involve known and unknown risks and uncertainties,
including any future impact of the Covid-19 pandemic on our
operations, and are based on current expectations and projections
about future events and financial trends that the Company believes
may affect its financial condition, results of operations, business
strategy and financial needs. Investors can identify these
forward-looking statements by words or phrases such as "may,"
"will," "expect," "anticipate," "aim," "estimate," "intend,"
"plan," "believe," "potential," "continue," "is/are likely to" or
other similar expressions. The Company undertakes no obligation to
update forward-looking statements to reflect subsequent occurring
events or circumstances, or changes in its expectations, except as
may be required by law. Although the Company believes that the
expectations expressed in these forward-looking statements are
reasonable, it cannot assure you that such expectations will turn
out to be correct, and the Company cautions investors that actual
results may differ materially from the anticipated results and
encourages investors to review other factors that may affect its
future results in the Company's annual report on Form 20-F and in
its other filings with the Securities and Exchange
Commission.
For more information, please contact Investor Relations at:
Sherry Zheng
Weitian Group LLC
Email: shunyu.zheng@weitian-ir.com
Phone: +1-718-213-7386
MDJM LTD and
Subsidiaries
|
Consolidated
Statements of Operations and Comprehensive Income (Loss)
|
For the Years Ended
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
Revenue
|
|
$
|
5,868,725
|
|
|
$
|
5,679,977
|
|
|
$
|
2,408,448
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling
expenses
|
|
|
95,207
|
|
|
|
186,641
|
|
|
|
82,225
|
|
Payroll, payroll
taxes and others
|
|
|
4,668,507
|
|
|
|
3,710,697
|
|
|
|
2,214,975
|
|
Professional
fees
|
|
|
404,850
|
|
|
|
634,372
|
|
|
|
-
|
|
Operating leases
expenses
|
|
|
116,532
|
|
|
|
184,802
|
|
|
|
141,959
|
|
Depreciation and
amortization
|
|
|
21,996
|
|
|
|
15,180
|
|
|
|
12,575
|
|
Provision (reduction)
for doubtful accounts, net
|
|
|
3,786
|
|
|
|
(38,883)
|
|
|
|
(146,174)
|
|
Other general and
administrative
|
|
|
316,989
|
|
|
|
628,608
|
|
|
|
667,267
|
|
Total Operating
Expenses
|
|
|
5,627,867
|
|
|
|
5,321,417
|
|
|
|
2,972,827
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) from
Operations
|
|
|
240,858
|
|
|
|
358,560
|
|
|
|
(564,379)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income
(Expense):
|
|
|
|
|
|
|
|
|
|
|
|
|
Gain on sale of
asset
|
|
|
-
|
|
|
|
1,705
|
|
|
|
-
|
|
(Loss) gain on
foreign currency transactions
|
|
|
(31,109)
|
|
|
|
12,072
|
|
|
|
-
|
|
Loss on disposal of
subsidiary
|
|
|
-
|
|
|
|
(4,970)
|
|
|
|
-
|
|
Interest
income
|
|
|
68,701
|
|
|
|
30,662
|
|
|
|
26,565
|
|
Other
income
|
|
|
8,343
|
|
|
|
2,707
|
|
|
|
-
|
|
Total other
income
|
|
|
45,935
|
|
|
|
42,176
|
|
|
|
26,565
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income (loss) before
income tax
|
|
|
286,793
|
|
|
|
400,736
|
|
|
|
(537,814)
|
|
Income tax
|
|
|
(32,900)
|
|
|
|
(101,372)
|
|
|
|
-
|
|
Net income
(loss)
|
|
|
253,893
|
|
|
|
299,364
|
|
|
|
(537,814)
|
|
Net loss attributable
to noncontrolling interest
|
|
|
(4,146)
|
|
|
|
(153,742)
|
|
|
|
(21,843)
|
|
Net income (loss)
attributable to MDJM Ltd ordinary shareholders
|
|
$
|
258,039
|
|
|
$
|
453,106
|
|
|
$
|
(515,971)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss) per
ordinary share attributable to MDJM Ltd ordinary
shareholders
|
|
$
|
0.02
|
|
|
$
|
0.04
|
|
|
$
|
(0.05)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted-average
shares outstanding, basic and diluted
|
|
|
11,
652,882
|
|
|
|
11,640,661
|
|
|
|
10,400,408
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Comprehensive income
(loss):
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
253,893
|
|
|
$
|
299,364
|
|
|
$
|
(537,814)
|
|
Other comprehensive
income (loss), net of tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in foreign
currency translation adjustments
|
|
|
251,919
|
|
|
|
(53,156)
|
|
|
|
(170,344)
|
|
Comprehensive income
(loss)
|
|
|
505,812
|
|
|
|
246,208
|
|
|
|
(708,158)
|
|
Comprehensive income
(loss) attributable to non-controlling interest
|
|
|
9,132
|
|
|
|
(2,398)
|
|
|
|
(823)
|
|
Comprehensive income
(loss) attributable to MDJM Ltd ordinary shareholders
|
|
$
|
496,680
|
|
|
$
|
248,606
|
|
|
$
|
(707,335)
|
|
MDJM LTD and
Subsidiaries
|
Consolidated Balance
Sheets
|
|
|
|
December 31,
2020
|
|
|
December 31,
2019
|
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
|
|
Cash, cash
equivalents, and restricted cash
|
|
$
|
6,110,693
|
|
|
$
|
6,552,677
|
|
Accounts receivable,
net of allowance for doubtful accounts of $15,477 and $10,774,
respectively
|
|
|
4,062,343
|
|
|
|
2,155,158
|
|
Prepaid
expenses
|
|
|
23,346
|
|
|
|
60,020
|
|
Other
receivables
|
|
|
92,168
|
|
|
|
69,977
|
|
Total Current
Assets
|
|
|
10,288,550
|
|
|
|
8,837,832
|
|
|
|
|
|
|
|
|
|
|
Property and
equipment, net
|
|
|
65,703
|
|
|
|
70,154
|
|
|
|
|
|
|
|
|
|
|
Other
Assets
|
|
|
|
|
|
|
|
|
Deferred tax
assets
|
|
|
24,890
|
|
|
|
33,440
|
|
Operating lease
assets, net
|
|
|
319,828
|
|
|
|
391,871
|
|
Other receivable -
long term
|
|
|
53,794
|
|
|
|
99,532
|
|
Total Other
Assets
|
|
|
398,512
|
|
|
|
524,843
|
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$
|
10,752,765
|
|
|
$
|
9,432,829
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
Liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable and
accrued liabilities
|
|
$
|
1,147,530
|
|
|
$
|
460,690
|
|
VAT and other taxes
payable
|
|
|
207,352
|
|
|
|
107,662
|
|
Deferred
income
|
|
|
18,780
|
|
|
|
26,429
|
|
Operating lease
liabilities, current
|
|
|
102,056
|
|
|
|
91,737
|
|
Total Current
Liabilities
|
|
|
1,475,718
|
|
|
|
686,518
|
|
|
|
|
|
|
|
|
|
|
Long-term operating
lease liabilities
|
|
|
161,559
|
|
|
|
247,382
|
|
|
|
|
|
|
|
|
|
|
Total
Liabilities
|
|
|
1,637,277
|
|
|
|
933,900
|
|
|
|
|
|
|
|
|
|
|
Equity:
|
|
|
|
|
|
|
|
|
Ordinary shares:
50,000,000 shares authorized, par value: $0.001 per
share,
11,675,216 and
11,640,820 shares issued and outstanding as of December
31,
2020 and 2019,
respectively
|
|
|
11,675
|
|
|
|
11,641
|
|
Additional paid in
capital
|
|
|
6,845,394
|
|
|
|
6,734,681
|
|
Statutory
reserve
|
|
|
327,140
|
|
|
|
262,954
|
|
Retained
earnings
|
|
|
2,142,657
|
|
|
|
1,948,804
|
|
Accumulated other
comprehensive loss
|
|
|
(37,558)
|
|
|
|
(280,345)
|
|
Total MDJM Ltd
stockholders' equity
|
|
|
9,289,308
|
|
|
|
8,677,735
|
|
Noncontrolling
interest
|
|
|
(173,820)
|
|
|
|
(178,806)
|
|
Total Liabilities and
Equity
|
|
$
|
10,752,765
|
|
|
$
|
9,432,829
|
|
|
|
|
|
|
|
|
|
|
MDJM LTD and
Subsidiaries
|
Consolidated
Statements of Cash Flows
|
For the Years Ended
December 31,
|
|
|
|
2020
|
|
|
2019
|
|
|
2018
|
|
Cash Flows from
Operating Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income
(loss)
|
|
$
|
253,893
|
|
|
$
|
299,364
|
|
|
$
|
(537,814)
|
|
Adjustments to
reconcile net income (loss) to net cash used in operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
21,996
|
|
|
|
15,180
|
|
|
|
12,575
|
|
Changes in allowance
for doubtful accounts
|
|
|
3,786
|
|
|
|
(38,883)
|
|
|
|
(146,174)
|
|
Gain on foreign
currency transactions
|
|
|
31,109
|
|
|
|
(12,072)
|
|
|
|
-
|
|
Gain on sale of
asset
|
|
|
-
|
|
|
|
(1,705)
|
|
|
|
-
|
|
Non cash operating
lease expense
|
|
|
92,621
|
|
|
|
88,632
|
|
|
|
-
|
|
Non cash interest
income
|
|
|
(5,926)
|
|
|
|
-
|
|
|
|
-
|
|
Decrease in deferred
tax assets
|
|
|
10,180
|
|
|
|
101,166
|
|
|
|
72,975
|
|
Changes in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Increase in accounts
receivables
|
|
|
(1,676,789)
|
|
|
|
(374,592)
|
|
|
|
(83,189)
|
|
Decrease (increase)
in other receivables
|
|
|
24,282
|
|
|
|
(4,630)
|
|
|
|
41,441
|
|
Decrease (increase)
in prepaid expense
|
|
|
38,346
|
|
|
|
174,113
|
|
|
|
(150,273)
|
|
Decrease (increase)
in prepaid income tax
|
|
|
-
|
|
|
|
3,605
|
|
|
|
(3,762)
|
|
Increase (decrease)
in accounts payable and accrued expenses
|
|
|
622,118
|
|
|
|
(107,980)
|
|
|
|
131,876
|
|
Increase (decrease)
in VAT and other tax payable
|
|
|
87,761
|
|
|
|
(28,518)
|
|
|
|
18,843
|
|
Decrease in operating
lease liabilities
|
|
|
(92,621)
|
|
|
|
(141,838)
|
|
|
|
-
|
|
(Decrease) increase
in deferred income
|
|
|
(8,889)
|
|
|
|
26,657
|
|
|
|
-
|
|
Net Cash Used in
Operating Activities
|
|
|
(598,133)
|
|
|
|
(1,501)
|
|
|
|
(643,502)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Investing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchase of office
equipment and software
|
|
|
(13,416)
|
|
|
|
(66,354)
|
|
|
|
(1,215)
|
|
Advance made to
deconsolidated subsidiary
|
|
|
-
|
|
|
|
(127,804)
|
|
|
|
-
|
|
Loan repayment
received
|
|
|
14,492
|
|
|
|
-
|
|
|
|
-
|
|
Proceeds from
disposal of asset
|
|
|
-
|
|
|
|
3,330
|
|
|
|
-
|
|
Net Cash Provided by
(Used in) Investing Activities
|
|
|
1,076
|
|
|
|
(190,828)
|
|
|
|
(1,215)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash Flows from
Financing Activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from
Regulation S offering - August 26, 2020, net of offering costs of
$2,760
|
|
|
110,747
|
|
|
|
-
|
|
|
|
-
|
|
Proceeds from initial
public offering - net of offering costs of $26,399 and $2,103,816,
respectively
|
|
|
-
|
|
|
|
70,406
|
|
|
|
4,103,479
|
|
Net Cash Provided by
Financing Activities
|
|
|
110,747
|
|
|
|
70,406
|
|
|
|
4,103,479
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Effect of exchange
rate changes on cash, cash equivalents, and restricted
cash
|
|
|
44,326
|
|
|
|
(17,957)
|
|
|
|
116,055
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net (decrease)
increase in cash, cash equivalents and restricted cash
|
|
|
(441,984)
|
|
|
|
(139,880)
|
|
|
|
3,574,817
|
|
Cash, cash
equivalents, and restricted cash - beginning of the
period
|
|
|
6,552,677
|
|
|
|
6,692,557
|
|
|
|
3,117,740
|
|
Cash, cash
equivalents, and restricted cash - end of the period
|
|
$
|
6,110,693
|
|
|
$
|
6,552,677
|
|
|
$
|
6,692,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
4,976,527
|
|
|
$
|
4,995,843
|
|
|
$
|
5,626,079
|
|
Restricted foreign
currency
|
|
|
1,134,166
|
|
|
|
1,556,834
|
|
|
|
1,066,478
|
|
Total cash, cash
equivalents, and restricted cash
|
|
$
|
6,110,693
|
|
|
$
|
6,552,677
|
|
|
$
|
6,692,557
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosure Cash Flow Information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid
for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
-
|
|
|
$
|
-
|
|
|
$
|
-
|
|
Income
taxes
|
|
$
|
39
|
|
|
$
|
-
|
|
|
$
|
271,817
|
|
View original
content:http://www.prnewswire.com/news-releases/mdjm-ltd-reports-full-year-2020-financial-results-301270775.html
SOURCE MDJM LTD