2007'02.01.Thu
February 13, 2006
22% Consolidated Revenue Growth For The Quarter;
Hospital and Equipment Divisions Report Profitable Operations;
Closedown of Distribution Division in Process
Hospital and Equipment Divisions Report Profitable Operations;
Closedown of Distribution Division in Process
BETHESDA, Md., Feb. 13 /Xinhua-PRNewswire/ -- Chindex
International, Inc. (Nasdaq: CHDX), an independent American
provider of Western healthcare products and medical services
in the People's Republic of China, today announced results
for the quarter ended December 31, 2005. The Company will
report a 22% increase in consolidated revenue over the same
quarter of the prior fiscal year and an after-tax loss. The
Medical Capital Equipment and Healthcare Services divisions
both reported profitable operations while the Healthcare
Products Distribution division accounted for the loss in
the quarter as closedown of operations in this division
were initiated.
Revenue for the quarter ended December 31, 2005 was
$27.2 million with a loss from operations of $516,000 and a
net loss of $463,000 or a loss per share of $0.07. This
compares to revenue of $22.3 million with a loss from
operations of $3.3 million and a net loss of $3.7 million,
or a loss per share of $0.69, for the quarter ended
December 31, 2004.
Revenue for the nine months ended December 31, 2005 was
$77.8 million with a loss from operations of $2.8 million
and a net loss of $2.5 million, or a loss per share of
$0.39. This compares to revenue of $76.6 million with a
loss from operations of $2.8 million and a net loss of $3.6
million, or a loss per share of $0.68, for the nine months
ended December 31, 2004.
Roberta Lipson, President and CEO of Chindex commented
from the Company's offices in Beijing: "During the
recent quarter we reported strong revenue growth in the
Healthcare Services segment of 91%, as compared to the
prior year period. We reported modest revenue growth in
the Medical Capital Equipment segment of 7% in spite of
continuing market challenges. The results for the period
were a significant improvement over the prior year with
both the equipment and hospital divisions reporting
profitable operations. In addition, we had a significant
decrease in expenses at the parent company level. Although
we reported a consolidated loss, it was attributable to the
results of the Healthcare Products Distribution division
which we began closing down following our announcement on
November 23, 2005.
"In the Healthcare Services segment we are very
pleased to see that the United Family Hospital network has
continued to increase its profitability on a consolidated
basis this quarter based on revenue growth system-wide.
Growth continues in both the Beijing and Shanghai markets
and we expect continued profitability from this division.
We closed on a long-term financing package with the
International Finance Corporation of the World Bank for
approximately $8 million during the quarter which is now
providing us with capital funding for expansion projects
throughout the United Family Hospital network and which has
allowed us to restructure our balance sheet debt along more
traditional hospital ratios. Our formal accreditation from
the Joint Commission International of the United Family
Hospital network operations in Beijing sets us distinctly
apart from any other healthcare network in Asia. It is a
strong, global affirmation from the premier accreditation
agency in the health services industry of our quality
standard at United Family Hospitals. This is the hallmark
of our brand value. We are the first hospital network in
Asia to receive this accreditation.
"In the Medical Capital Equipment segment our
results included delivery of goods under the current phase
of our German KfW financing package which helped to offset
the continuation of several factors which are impacting our
results so far this year. These include lacklustre sales in
certain product categories due to maturing product life
cycle issues, increased competition in certain mid-tier
product markets and delays due to product registrations in
other product categories. We continue to focus on cost
containment and have new premium and mid-tier market
product releases scheduled during the fourth quarter. In
addition, the product registration process has recently
been completed for another line of products that has
allowed sales to proceed. We have experienced such down
periods in the capital equipment business before in China.
We believe there is basically no change to the underlying
demand for the products and services we provide to the
Chinese hospital markets.
"On November 23, 2005, we announced that we would
close down operations of the retail pharmacy distribution
business, which comprises most of the operations of the
Healthcare Products Distribution segment. The logistics
operations of the segment will migrate to the parent
company level and continue to provide services to other
business units of the Company. During the recent quarter,
the business operations of the segment generally continued
to be routine as the closedown process began. The
closedown process of the retail pharmacy business is
continuing at the time of this release. Our objective is
to minimize the overall costs to the Company through the
careful migration of personnel where possible and
realization of assets. Although we originally expected the
closedown to be substantially completed by December 31,
2005, managing the process in order to reduce associated
costs to us has extended the implementation timeline beyond
our original estimate by a few months."
About Chindex
Chindex is an American healthcare company supplying
both medical equipment and healthcare services to the
Chinese marketplace, including Hong Kong. It sells medical
equipment produced by a number of major multinational
companies including Siemens AG as its exclusive
distribution partner for the sales and servicing of color
doppler ultrasound systems. It also arranges financing
packages for the supply of medical equipment 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. It provides healthcare services
through the operations of its network of private primary
care hospitals and affiliated ambulatory clinics in China.
With twenty-four years of experience, approximately 1,000
employees, and operations in the United States, China and
Hong Kong, 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,
http://www.chindex.com and
http://www.unitedfamilyhospitals.com .
Some of the information in this press release may
contain statements regarding future expectations, plans,
prospects for performance of the Company that constitute
forward-looking statements for purposes of the safe harbor
provisions of The Private Securities Litigation Reform Act
of 1995. The Company cannot guarantee future results,
levels of activity, performance or achievements. The
numbers discussed in this press release also involve risks
and uncertainties. The following factors, among others,
could cause actual results to differ materially from those
described by such statements: our ability to manage our
growth and maintain adequate controls, our ability to
obtain additional financing, the loss of services of key
personnel, general market conditions including inflation or
foreign currency fluctuations, our dependence on
relationships with suppliers, the timing of our revenues
and fluctuations in financial performance, the availability
to our customers of third-party financings, product
liability claims and product recalls, competition, hiring
and retaining qualified sales and service personnel,
management of inventory, relations with foreign trade
corporations, dependence on sub-distributors and dealers,
completion and opening of healthcare facilities, attracting
and retaining qualified physicians and other hospital
personnel, regulatory compliance, the cost of malpractice,
our dependence on our information systems, the economic
policies of the Chinese government, the newness and
undeveloped nature of the Chinese legal system, the
regulation of the conversion of Chinese currency, future
epidemics in China such as SARS or Avian Flu, the control
over our operation by insiders, continuity of relationships
and variability of financial margins with existing
suppliers, our liquidity and availability of capital
resources to meet cash requirements, including capital
expenditures, bid and performance bonds, limitations on the
inter-entity transfers and other limitations imposed by
existing credit facilities, uncertainty about the costs
related to the closedown of the Healthcare Products
Distribution segment, and those other factors contained in
the section titled "Risk Factors" as set forth in
the Company's Registration Statement (File No. 333-114996)
declared effective by the Securities and Exchange
Commission on December 5, 2005, as well as other documents
that may be filed by the Company from time to time with the
Securities and Exchange Commission. The forward-looking
statements and numbers contained herein represent the
judgment of the Company, as of the date of this press
release, and the Company disclaims any intent or obligation
to update such forward-looking statements to reflect any
change in the Company's expectations with regard thereto or
any change in events, conditions, circumstances on which
such statements are based.
CHINDEX INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(thousands except share and per share data)
(Unaudited)
Three months ended
Nine months ended
December 31,
December 31,
2005 2004
2005 2004
Product sales $17,246 $17,141
$51,510 $60,509
Healthcare services revenue 9,920 5,188
26,289 16,050
Total revenue 27,166 22,329
77,799 76,559
Cost and expenses
Product sales costs 13,784 13,587
40,906 48,462
Healthcare services costs 9,151 6,751
24,559 16,798
Selling and marketing
expenses 3,018 3,297
9,347 8,962
General and
administrative expenses 1,729 2,039
5,743 5,190
Loss from operations (516) (3,345)
(2,756) (2,853)
Other (expenses) and income
Interest expense (203) (36)
(397) (108)
Interest income 50 33
117 66
Foreign exchange gain
(loss) 48 (20)
379 (50)
Miscellaneous (expense)
income - net (59) (31)
23 (65)
Loss before income taxes (680) (3,399)
(2,634) (3,010)
Benefit from (provision
for) income taxes 217 (314)
90 (549)
Net loss $(463) $(3,713)
$(2,544) $(3,559)
Net loss per common share -
basic and diluted $(.07) $(.69)
$(.39) $(.68)
Weighted average shares
outstanding - basic and
diluted 6,536,122 5,405,337
6,518,042 5,250,244
CHINDEX INTERNATIONAL, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(thousands except share data)
(Unaudited)
December March 31,
31,
2005 2005
ASSETS
Current assets:
Cash and cash equivalents
$7,683 $8,173
Trade accounts receivable, less
allowance for doubtful accounts of
$2,458 and $1,851, respectively
Equipment sales receivables
11,491 13,120
Patient service receivables
4,532 2,706
Inventories, net
10,755 10,856
Deferred income tax
341 222
Other current assets
2,722 2,034
Total current assets
37,524 37,111
Property and equipment, net
18,064 17,620
Long-term deferred income taxes
2,210 1,780
Other assets
725 777
Total assets
$58,523 $57,288
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued
expenses
$24,371 $26,420
Short-term portion of
capitalized leases
82 189
Short-term debt and vendor
financing
2,413 2,839
Income taxes payable
177 4
Total current liabilities
27,043 29,452
Long-term portion of capitalized
leases
103 124
Long-term debt and vendor financing
8,802 2,749
Total liabilities
35,948 32,325
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 - 5,783,515 and
5,728,443 shares issued and
at December 31, 2005 and March 31,
2005, respectively
58 57
Class B stock - 775,000 shares
issued and outstanding at
December 31, 2005 and
March 31, 2005
8 8
Additional paid in capital
35,995 35,884
Accumulated other comprehensive
income
61 17
Accumulated deficit
(13,547) (11,003)
Total stockholders' equity
22,575 24,963
Total liabilities and
stockholders' equity
$58,523 $57,288
SEGMENT INFORMATION
The Company has three reportable segments: Medical
Capital Equipment, Healthcare Services and Healthcare
Products Distribution. The Company evaluates performance
and allocates resources based on profit or loss from
operations before income taxes, not including gains or
losses on the Company's investment portfolio. The
following segment information has been provided per
Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and
Related Information:"
Medical
Healthcare
Capital Healthcare
Products
Equipment Services
Distribution Total
As of December 31, 2005
Assets $23,310,000 $26,244,000
$8,969,000 $58,523,000
For the quarter ended
December 31, 2005:
Sales and service
revenue $10,143,000 $9,920,000
$7,103,000 $27,166,000
Gross Profit 3,111,000 n/a
351,000 n/a
Gross Profit % 31 % n/a
5 % n/a
Income (loss) from
operations $15,000 $439,000
$(970,000) $(516,000)
Other (expense) net
(164,000)
Loss before income taxes
$(680,000)
Medical
Healthcare
Capital Healthcare
Products
Equipment Services
Distribution Total
As of March 31, 2005
Assets $22,698,000 $20,878,000
$13,712,000 $57,288,000
For the quarter ended
December 31, 2004:
Sales and service
revenue $9,462,000 $5,188,000
$7,679,000 $22,329,000
Gross Profit 2,520,000 n/a
1,034,000 n/a
Gross Profit % 27 % n/a
13 % n/a
Loss from operations $(1,035,000) $(1,838,000)
$(472,000) $(3,345,000)
Other (expense) net
(54,000)
Loss before income taxes
$(3,399,000)
Medical
Healthcare
Capital Healthcare
Products
Equipment Services
Distribution Total
As of December 31, 2005
Assets $23,310,000 $26,244,000
$8,969,000 $58,523,000
For the nine-months
ended December 31,
2005:
Sales and service
revenue $31,032,000 $26,289,000
$20,478,000 $77,799,000
Gross Profit 9,222,000 n/a
1,383,000 n/a
Gross Profit % 30 % n/a
7 % n/a
(Loss) income from
operations $(241,000) $586,000
$(3,101,000) $(2,756,000)
Other income net
122,000
Loss before income taxes
$(2,634,000)
Medical
Healthcare
Capital Healthcare
Products
Equipment Services
Distribution Total
As of March 31, 2005
Assets $22,698,000 $20,878,000
$13,712,000 $57,288,000
For the nine-months
ended December 31,
2004:
Sales and service
revenue $34,393,000 $16,050,000
$26,116,000 $76,559,000
Gross Profit 9,220,000 n/a
2,826,000 n/a
Gross Profit % 27 % n/a
11 % n/a
Income (loss) from
operations $90,000 $(1,446,000)
$(1,497,000) $(2,853,000)
Other (expense) net
(157,000)
Loss before income taxes
$(3,010,000)
For more information, please contact:
Lawrence Pemble or Judy Zakreski
Chindex International, Inc.
Tel: +1-30-215-7777
SOURCE Chindex International, Inc.
PR
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