Happiness Biotech Announces Financial Results for Fiscal Year Ended March 31, 2020

NANPING, China, July 24, 2020  /PRNewswire/ -- Happiness Biotech Group Limited (the "Company" or Nasdaq: HAPP), an innovative China-based nutraceutical and dietary supplements producer, today announced its financial results for the fiscal year ended March 31, 2020.

FY 2020 Financial Highlights:

The revenue increase was primarily due to the increase in sales of Lucidum spore powder, its related products and other products, which offset the decrease in sales of Cordyceps mycelia products, Ejiao solution products, Vitamins and dietary supplements products and American ginseng products. Our sales from the Lucidum spore powder products had grown significantly during fiscal year 2020 due to our development of Lucidum enriched related products and Lucidum raw material products. Lucidum spore powder and its related products are our best-selling products line and the key items of our future development.

Our net income decrease was mainly caused by the increase of selling expenses. The increased selling expenses was primarily due to increases in higher allowance costs, advertising costs, and subsidy to our experience stores to support their continuity of insufficient business for the prolonged period affected by the COVID-19.

Mr. Xuezhu Wang, Chief Executive Officer of Happiness Biotech, commented, "We are pleased to announce our financial results for the fiscal year ended March 31, 2020. Although due to the impacts of COVID-19 pandemic, our experience stores were all closed in the fourth quarter, and our traditional sales channels also suffered heavy losses, we still achieved the annual revenue growth through active online sales efforts and other effective remedial measures. Although our net profit decreased due to higher allowance costs, advertising costs, and subsidy to our experience store operators, we believe they are necessary expenses to sustain our business development in the long term. After all, even they were closed in the fourth quarter, the sales of our experience store in this fiscal year still realized growth. "

Mr. Wang continued to comment, "In the past few months, in response to the outbreak of the COVID-19 in China, we produced epidemic prevention products in an effort to leverage our production facility and to satisfy market needs. With the gradual control of the epidemic situation in China, the sales from our experience stores, including our traditional sales channels, are rapidly recovering. China has officially resumed cross provincial (district, city) team tourism on July 14, 2020, which is a great news to us, after all, most of our experience store customers come from group touring. In the meanwhile, we built up our experience in online sales during the fourth quarter and decided to continue to invest in the online sales channels. Therefore, we plan to set up a dedicated e-commerce unit and the online sales are expected to become an important stream of our revenue in the future!"

Fiscal Year 2020 Financial Results

Revenue
We generated $65,061,953 in revenues for the fiscal year ended March 31, 2020, representing an increase of $1,125,768 or 1.8%, as compared with $63,936,185 for the fiscal year ended March 31, 2019.

Cost of Revenues
Total cost of revenues was $34,642,649 for the fiscal year ended March 31, 2020, representing an increase of $2,953,532 or 9.3%, compared with $31,689,117 for the fiscal year ended March 31, 2019.

Selling and Marketing Expenses
We incurred $9,179,160 in selling and marketing expenses for the fiscal year ended March 31, 2020, representing an increase of $2,887,932 or 45.9%, compared with $6,291,228 for the fiscal year ended March 31, 2019.

Income from operations
Because of the factors described above, our operating income was $15,398,717 for the fiscal year ended March 31, 2020, compared with operating income of $21,842,873 for the fiscal year ended March 31, 2019, representing a decrease of $6,444,155 or approximately 29.5%.

Net Income
Our net income for the fiscal year ended March 31, 2020 was $12,688,035, representing a decrease of $6,033,944 or 32.2%, compared with net income of $18,721,979 for the fiscal year ended March 31, 2019, which was resulted from the lower operating profit margin and lower revenue for the first quarter in 2020.

About Happiness Biotech Group Limited

Headquartered in Nanping, China, Happiness Biotech Group Limited is an innovative China-based nutraceutical and dietary supplements producer focused on the research, development, manufacturing and marketing of a variety of products made from Chinese herbal extracts and other ingredients. The Company's goal is to provide high-quality products to our consumers. Over the past 14 years, the Company has established a product portfolio consisting of 32 CFDA registered "Blue-Cap" SKUs of nutraceutical and dietary supplements products. While the Company's main products are still nutraceutical and dietary supplements, the Company also produces epidemic prevention products to satisfy market needs. For more information, please visit: www.happ.org.cn.

Forward-Looking Statements

This press release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. When the Company uses words such as "may, "will, "intend," "should," "believe," "expect," "anticipate," "project," "estimate" or similar expressions that do not relate solely to historical matters, it is making forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties that may cause the actual results to differ materially from the Company's expectations discussed in the forward-looking statements. These statements are subject to uncertainties and risks including, but not limited to, the following:  the Company's goals and strategies; the Company's future business development; product and service demand and acceptance; changes in technology; economic conditions; reputation and brand; the impact of competition and pricing; government regulations; fluctuations in general economic and business conditions in China, the COVID-19 outbreak and its impact on our operations and assumptions underlying or related to any of the foregoing and other risks contained in reports filed by the Company with the Securities and Exchange Commission.  For these reasons, among others, investors are cautioned not to place undue reliance upon any forward-looking statements in this press release. Additional factors are discussed in the Company's filings with the U.S. Securities and Exchange Commission, which are available for review at www.sec.gov. The Company undertakes no obligation to publicly revise these forward-looking statements to reflect events or circumstances that arise after the date hereof.

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SOURCE Happiness Biotech Group Limited