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BETHESDA, MARYLAND -- August 8, 2007 - Chindex International, Inc. (NASDAQ: CHDX), an independent American provider of Western healthcare services and products in the People's Republic of China, today announced profitable results for the quarter ended June 30, 2007, including a 58% increase in net income
Revenue for the quarter ended June 30, 2007 was $26.8 million, a 10% increase over revenue of $24.4 million in the quarter ended June 30, 2006 . Net income from continuing operations for the quarter ended June 30, 2007 was $.8 million, or earnings per basic share on continuing operations of $0.11. This compares to a net income from continuing operations of $.5 million, or earnings per basic share on continuing operations of $0.08 for the quarter ended June 30, 2006 .
The Company's balance sheet as of June 30, 2007 shows cash, cash equivalents and restricted cash of $17.9 million, total assets of $67.1 million, a current ratio of 1.7:1 and stockholders' equity of $30.2 million.
Roberta Lipson, Chindex CEO commented on the results for the quarter: "Our continuing bottom line profitability on a consolidated basis this quarter was led by an increase in the profitability of our Healthcare Services division. This was fueled by continued growth in inpatient and outpatient results in both the Beijing and Shanghai markets. Our development program for new United Family Healthcare facilities in Guangzhou and Beijing is gaining momentum. We are currently finalizing details of our market entry program in Guangzhou with a clinic operation which will precede our main hospital facility development program . In May we also announced that we had entered into a management agreement for the operation of the Wuxi United Family International Healthcare Center . We are finalizing plans for its opening this fall. This expands our geographic reach in Eastern China and will also serve as a feeder clinic for our Shanghai hospital.
"The Medical Products division reported a loss for the quarter due primarily to unusual delays in the timing of revenues -- the major components of which were delays in finalizing sales contracts under the recently re-authorized US-Export-Import Bank financing program and high-value surgical system sales in Hong Kong and mainland China . Since the quarter close we have had three significant developments in the products division. We announced that once again we have been awarded the exclusive supply for high end color clinical application ultrasound to the PLA hospital system. Last week we announced the finalization of the first of the U.S. Ex-Im financed sales contracts. Finally, yesterday we announced the official award of the tender for the supply of another Intuitive Surgical Robotic S ystem in Hong Kong . Our outlook for the Medical Products division continues to be optimistic. The conditions are aligned for substantially improved performance in this division in the future."
About Chindex International, Inc.
Chindex is an American healthcare company that provides healthcare services and supplies medical capital equipment, instrumentation and products to the Chinese marketplace, including Hong Kong . It provides healthcare services through the operations of its United Family Hospitals and Clinics, a network of private primary care hospitals and affiliated ambulatory clinics in China . The Company's hospital network currently operates in the Beijing and Shanghai metropolitan areas. The Company sells medical products manufactured by various major multinational companies, including Siemens AG, which is the Company's exclusive distribution partner for the sale and servicing of color doppler ultrasound systems. It also arranges financing packages for the supply of medical products to hospitals in China utilizing the export loan and loan guarantee programs of both the U.S. Export-Import Bank and the German KfW Development Bank. With twenty- six years of experience, 1,000 employees, and operations in China , Hong Kong , the United States and Germany , the Company's strategy is to expand its cross-cultural reach by providing leading edge healthcare technologies, quality products and services to Greater China's professional communities. Further company information may be found at the Company's websites, www.chindex.com and www.unitedfamilyhospitals.com .
Statements made in this press release relating to plans, strategies, objectives, economic performance and trends and other statements that are not descriptions of historical facts may be forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking information is inherently subject to risks and uncertainties, and actual results could differ materially from those currently anticipated due to a number of factors, which include, but are not limited to, the factors set forth under the heading "Risk Factors" in our annual report on Form 10-K for the year ended March 31, 2007,. Forward-looking statements may be identified by terms such as "may", "will", "should", "could", "expects", "plans", "intends", "anticipates", "believes", "estimates", "predicts", "forecasts", "potential", or "continue" or similar terms or the negative of these terms. Although we believe that the expectations reflected in the forward-looking statements are reasonable, we cannot guarantee future results, levels of activity, performance or achievements. We have no obligation to update these forward-looking statements.
# # # #
Financial Summary Attached
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(thousands except share and per share data)
(Unaudited)
|
|
Three months ended June 30, |
||
2007 |
2006 |
||
|
Product sales |
$11,213 |
$12,801 |
|
|
Healthcare services revenue |
15,558 |
11,614 |
|
|
Total revenue |
26,771 |
24,415 |
|
|
|
|
|
|
|
Cost and expenses |
|
|
|
|
|
Product sales costs |
8,370 |
9,201 |
|
|
Healthcare services costs |
11,864 |
9,468 |
|
|
Selling and marketing expenses |
2,684 |
2,253 |
|
|
General and administrative expenses |
2,489 |
1,843 |
|
Income from continuing operations |
1,364 |
1,650 |
|
|
Other (expenses) and income |
|
|
|
|
|
Interest expense |
(187) |
(187) |
|
|
Interest income |
67 |
64 |
|
|
Miscellaneous expense – net |
(26) |
(15) |
|
Income from continuing operations before income taxes |
1,218 |
1,512 |
|
|
Provision for income taxes |
(409) |
(987) |
|
|
Net income from continuing operations |
809 |
525 |
|
|
Loss from discontinued operations |
0 |
(13) |
|
|
Net income |
$ 809 |
$ 512 |
|
|
Net income per common share - basic |
|||
|
Continuing operations |
$ .11 |
$ .08 |
|
|
Discontinued operations |
(.00) |
(.00) |
|
|
Net income |
$ .11 |
$ .08 |
|
|
Weighted average shares outstanding - basic |
7,223,363 |
6,728,354 |
|
|
|
|||
|
Net income per common share - diluted |
|||
|
Continuing operations |
$ .11 |
$ .07 |
|
|
Discontinued operations |
(.00) |
(.00) |
|
|
Net income |
$ .11 |
$.07 |
|
|
Weighted average shares outstanding - diluted |
7,694,666 |
7,105,981 |
|
CONSOLIDATED CONDENSED BALANCE SHEETS
(thousands except share data)
|
|
June 30, 2007 |
March 31, 2007 |
||||||
|
ASSETS |
||||||||
|
Current assets: |
||||||||
|
|
Cash and cash equivalents |
$16,201 |
$9,106 |
|||||
| Restricted cash |
1,721
|
1,590
|
||||||
|
|
Trade accounts receivable, less allowance for doubtful accounts of $3,557 and $2,827, respectively |
|
|
|||||
|
|
|
Productt sales receivables |
9,100 |
13,133 |
||||
|
|
|
Patient service receivables |
5,825 |
6,104 |
||||
|
|
Inventories |
8,290 |
7,835 |
|||||
|
|
Deferred income tax |
2,519 |
2,463 |
|||||
|
|
Other current assets |
3,181
|
3,153 |
|||||
| Current assest of discontinued operations |
36,871
|
34,756
|
||||||
|
|
Total current assets |
46,837 |
43,384 |
|||||
|
Property and equipment, net |
19,298 |
18,482 |
||||||
|
Long-term deferred income taxes |
609 |
607 |
||||||
|
Other assets |
452 |
434 |
||||||
|
|
Total assets |
$67,196 |
$ 62,907 |
|||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||||
|
Current liabilities: |
|
|
||||||
|
|
Accounts payable and accrued expenses |
|
$24,553 |
$ 22,877 |
||||
|
|
Short-term portion of capitalized leases |
|
33 |
36 |
||||
|
|
Short-term debt and vendor financing |
|
3,121 |
2,710 |
||||
|
|
Income taxes payable |
|
545 |
629 |
||||
|
|
Total current liabilities |
28,252 |
26,252 |
|||||
|
Long-term portion of capitalized leases |
|
50 |
58 |
|||||
|
Long-term debt and vendor financing |
|
8,654 |
8,679 |
|||||
|
|
Total liabilities |
|
36,956 |
34,989 |
||||
| Commitments and contingencies | ||||||||
|
Stockholders' equity: |
|
|
|
|||||
|
|
Preferred stock, $.01 par value, 500,000 shares authorized, none issued |
|
0 |
0 |
||||
|
|
Common stock, $.01 par value, 13,600,000 shares authorized, including 1,600,000 designated Class B: |
|
|
|
||||
|
|
|
Common stock - 6,650,830 and 6,332,345 shares issued and outstanding at June 30, 2007 and March 31, 2007 ,respectively |
66 |
63 |
||||
|
|
|
Class B stock - 775,000 shares issued and outstanding at June 30, 2007 and March 31, 2007, respectively |
8 |
8 |
||||
|
|
Additional capital |
|
40,446 |
38.947 |
||||
|
|
Accumulated other comprehensive income |
|
117 |
106 |
||||
|
|
Accumulated deficit |
|
(10,397) |
(11,206) |
||||
|
|
Total stockholders' equity |
|
30,240 |
27,918 |
||||
|
|
Total liabilities and stockholders' equity |
|
$67,196 |
$ 62,907 |
||||
SEGMENT INFORMATION
The Company operates in two businesses: Healthcare Services and Medical Products. The Company evaluates performance and allocates resources based on profit or loss from operations before income taxes, not including foreign exchange gains or losses. The following segment information has been provided per Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information:"
|
|
Healthcare Services |
Medical Products |
Total |
|
As of June 30, 2007 : |
|
|
|
|
Assets |
$40,211,000 |
$26,985,000 |
$67,196,000 |
|
For the three months ended June 30, 2007 : |
|
|
|
|
Sales and service revenue |
$15,558,000 |
$11,213,000 |
$26,771,000 |
|
Gross Profit |
n/a * |
2,843,000 |
n/a |
|
Gross Profit % |
n/a * |
25% |
n/a |
|
Income (loss) from continuing operations before foreign exchange |
$2,798,000 |
$(1,505,000) |
$1,293,000 |
|
Foreign exchange gain |
|
|
71,000 |
|
Income from continuing operations |
|
|
$1,364,000 |
|
Other expense, net |
|
|
(146,000) |
|
Income from continuing operations before income taxes |
|
|
$1,218,000 |
|
|
Healthcare Services |
Medical Products |
Total |
|
As of March 31, 2007 : |
|
|
|
|
Assets |
$34,129,000 |
$28,778,000 |
$62,907,000 |
|
For the three months ended June 30, 2006 : |
|
|
|
|
Sales and service revenue |
$11,614,000 |
$12,801,000 |
$24,415,000 |
|
Gross Profit |
n/a * |
3,600,000 |
n/a |
|
Gross Profit % |
n/a * |
28% |
n/a |
|
Income from continuing operations before foreign exchange |
$1,587,000 |
$95,000 |
$1,682,000 |
|
Foreign exchange loss |
|
|
(32,000) |
|
Income from continuing operations |
|
|
$1,650,000 |
|
Other expense, net |
|
|
(138,000) |
|
Income from continuing operations before income taxes |
|
|
$1,512,000 |
* Gross profit margins are not routinely calculated in the healthcare industry.
