Chindex Press Room

U.S.-CHINA INDUSTRIAL EXCHANGE, INC. (CHINDEX)
REPORTS THIRD QUARTER AND NINE-MONTH RESULTS

BETHESDA, MARYLAND - November 14, 1997 - U.S. -CHINA INDUSTRIAL EXCHANGE, INC. (NASDAQ:CHDX), today announced that sales for its fiscal third quarter ended September 30, 1997 grew strongly to $6.8 million, up approximately 59 percent from last year’s third quarter sales of $4.3 million. Sales for the first nine months of this year were $16.0 million compared to sales for last year’s first nine months of $16.8 million. As a result of investing in business expansion and the development of its international-standard private healthcare services business, the net losses for this year’s third quarter and nine months were $456,000, or a loss per share of $0.07, and $1.1 million, or a loss per share of $0.17, respectively. This compares to a net loss for last year’s third quarter of $136,000, or a loss per share of $0.04, and net income for last year’s first nine months of $737,000, or $0.22 per share.

Contributing to this year’s third quarter and nine-month losses were significant increases in selling, general and administrative (SG&A) expenses, due primarily to the Company’s accelerated investment in three major growth initiatives: primary healthcare services, wholesale products distribution and pharmaceutical business development. These expenses include the hiring of additional key employees, expanded travel and related expenses.

According to Chindex Chairperson, President and CEO Roberta Lipson, "Sales in our core businesses for the third quarter of fiscal 1997 remained strong. We saw sales increases during the quarter in our medical, industrial and wholesale distribution businesses and we believe our sales performance in these areas will continue to improve in coming quarters.

"Beijing United Family Hospital (BJU) is the first step in the Chindex primary healthcare program," she continued, "and we plan to open several of these international-standard private hospitals, together with supporting satellite facilities, over the next few years in major cities in China. Not only have we seen a tremendous response from the Expatriate community for these services, but there is a rapidly growing number of Chinese who not only can afford, but who are starting to demand, more personalized international-standard primary healthcare. With BJU, Chindex has opened the first private foreign-invested hospital in China and is well ahead of any other efforts to capitalize on this emerging trend. Opening BJU has been a three-year project for us and has required a strategic investment of approximately $3.1 million. We began a gradual phased opening of hospital services in September of this year, and while we have only recorded a small amount of revenue from patients in this initial phase, we are carrying most of the overhead expenses of a fully operational hospital. We look forward to significant future revenue contributions from Beijing United Family Hospital beginning in the middle of fiscal 1998."

Executive Vice President Finance Lawrence Pemble commented, "Sales for the first nine months of this year declined slightly, when compared to the same period last year, due in part to the non-availability for our customers this year of Export-Import bank financing. During the first nine months of last year, approximately one-half of our sales were facilitated by Export-Import bank financing. While this did impact our sales, our customers with our help, and in some cases our financing, did find other means to finance sales. We are continuing to seek additional sources to assist our customers in financing sales."

SG&A expense for this year’s third quarter increased to $2.9 million from $1.8 million for the previous year’s third quarter and SG&A expense for the first nine months of this year was $7.3 million, up from $5.3 million for the same period last year.

The Company’s balance sheet at September 30, 1997 showed cash and equivalents of $6.8 million, total assets of $28.5 million, a current ratio of 2.4:1 and shareholders’ equity of $17.8 million.

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U.S.-China Industrial Exchange, Inc. (Chindex) provides market representation, sales and consulting services in China to a number of multinational and Fortune 500 companies including Volvo Construction Equipment, Ingersoll-Rand, Acuson, Johnson & Johnson and Kendall. With over sixteen years experience, 135 employees, and operations in the United States, China and Hong Kong, the Chindex strategy is to expand its cross-cultural reach by providing leading edge technologies, quality products and services to Greater China's growing professional communities. Chindex is listed on NASDAQ under the ticker symbol CHDX.