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Chindex
Press Room
U.S.-CHINA
INDUSTRIAL EXCHANGE (CHINDEX) REPORTS
YEAR END RESULTS; RESTRUCTURING OF OPERATIONS
BETHESDA, MARYLAND
- March 31, 1998 - U.S. - CHINA INDUSTRIAL
EXCHANGE, INC. (NASDAQ:CHDX), today announced
that due to its increased focus on, and its
investment in, its most promising business
segments in healthcare, and also to a substantial
restructuring of operations, which includes a
one-time charge in the fourth quarter of $1.5
million, the Company reported a loss for the year
ended December 31, 1997. The net loss for the
1997 year was $4.6 million, or a loss of $0.74
per share, compared to the prior years net
income of $576,000, or $0.15 per share. Revenues
for the 1997 year rose slightly to $24.4 million,
compared to revenues of $22.9 for the full year
ended 1996.
Chindex
Chairperson, President and CEO Roberta Lipson,
commented, "We have instituted a program
that will focus our future efforts by eliminating
unprofitable operations and concentrating
exclusively on continuing our growth solely as an
American healthcare company in China. This will
include the elimination of all non-healthcare
related lines of business, as well as several of
our less profitable medical equipment lines.
"We intend to
further reduce costs throughout the Company in
order to bring operating expenses in line with
near term anticipated revenues as rapidly as
possible," she said. "We believe our
program, which includes reducing overall
non-hospital staff levels by 18 percent and the
restructuring charge involving additional
reserves for closing non-essential operations and
severance pay, will achieve this goal without
sacrificing either our established core medical
business or the new initiatives we have been
developing in healthcare services and products
distribution." Lipson continued, "As
part of our cost reductions, the executive
management team has agreed to take a 10 percent
reduction in salary and to forego any
bonuses."
"While we are
certainly disappointed by these results,"
she said, "we continue to be encouraged by
our medical business and prospects and have
decided that it is in the Companys best
interest to focus our efforts solely in the
healthcare field."
The Company noted
that SG&A expense for the 1997 year was $12.6
million including the one-time restructuring
charge of $1.5 million, up from $7.9 million for
the same period last year. In addition to the
restructuring charge, the increase was due to
costs associated with increased personnel,
startup expenses related to the opening in
September of the Companys Beijing United
Family Hospital, and other costs related to
expanded selling efforts.
The Companys
balance sheet as of December 31, 1997 showed cash
and equivalents of $6.2 million, total assets of
$26.6 million, a current ratio of 1.8:1 and
shareholders equity of $14.2 million.
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U.S.-CHINA INDUSTRIAL
EXCHANGE, INC. (CHINDEX)
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Consolidated Statements of
Operations
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Twelve Months Ended
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December 31,
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1997
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1996
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Net sales |
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$
23,849,000
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$
22,060,000
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Cost of goods sold |
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17,487,000
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15,078,000
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Gross profit on
sales |
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6,362,000
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6,982,000
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Net commission
income |
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532,000
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841,000
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Total gross profit
on sales |
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and net commission
income |
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6,894,000
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7,823,000
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Selling, general
and administrative |
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Salaries and
payroll taxes |
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4,726,000
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3,536,000
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Travel and
entertainment |
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2,214,000
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1,796,000
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Other |
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4,180,000
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2,564,000
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Restructuring |
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1,472,000
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-
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Net operating loss |
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(5,698,000)
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(73,000)
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Other income and
expenses |
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Interest expense |
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(31,000)
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(119,000)
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Interest income |
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452,000
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408,000
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Miscellaneous
income - net |
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554,000
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501,000
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(Loss) income
before benefit from/ |
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(provision for)
income taxes |
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(4,723,000)
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717,000
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Benefit
from/(provision for) income taxes |
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75,000
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(141,000)
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Net (loss)/income |
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$
(4,648,000)
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$
576,000
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Net (loss)/income
per common share |
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$
(0.74)
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$
0.15
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Weighted average
shares outstanding |
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6,322,500
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3,809,078
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* *
* * *
Chindex
is a leading American company in healthcare in
the Greater Chinese marketplace including Hong
Kong and Macau. It provides representative and
distribution services to a number of Fortune 500
companies including Acuson, Johnson &
Johnson, Kendall Healthcare Products, and
Schering AG. It also operates a private hospital
corporation in China. With over sixteen years
experience, 200 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 Chinas
professional communities. Chindex is listed on
NASDAQ under the ticker symbol CHDX.
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