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BETHESDA,
MARYLAND - August 11, 2006 - 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 first quarter ended June 30, 2006. Both
operating divisions of the company reported profitable results.
Revenue
for the quarter ended June 30, 2006 was $24.4 million, a 10% increase
over revenue of $22.2 million in the quarter ended June 30, 2005 .
Net
income from continuing operations for the quarter ended June 30, 2006
was $525,000, or earnings per basic share on continuing operations
of $0.08. This compares to a net loss on continuing operations of
$581,000, or a loss per basic share on continuing operations of $0.09
for the quarter ended June 30, 2005 .
The
Company's balance sheet as of June 30, 2006 shows cash, cash equivalents
and restricted cash of $9.9 million, total assets of $59.0 million,
a current ratio of 1.4:1 and stockholders' equity of $23.3 million.
Roberta
Lipson, President and CEO of Chindex, commented on the results:
"We
were pleased to report profitable operations in both operating divisions
of the company during the quarter.
"Our
Healthcare Services division, which operates our network of private
healthcare facilities in China , reported 47% top line growth and
substantially increased profitability compared to the prior year.
We are increasing our patient services in both the Beijing and Shanghai
markets and pursuing a variety of aggressive growth programs in both
facilities development and contract hospital management to capitalize
on the increasing value of our United Family Hospital brand.
"Our
Medical Products division, which distributes and sells medical capital
equipment, instruments and other medical products for use in hospitals
in China and Hong Kong, reported profitable operations despite a 10%
decrease in revenues for this division compared to the prior year
due to improved gross margin on sales during the quarter. The Chinese
healthcare system has been in the midst of a campaign to reform the
procurement process for some time now. The impact of this has resulted
in various delays in revenues for us over the past several quarters,"
Lipson concluded.
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-five years of experience, 950 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, 2006 and in other
documents filed by us with the Securities and Exchange Commission
from time to time. 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
CHINDEX
INTERNATIONAL, INC.
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
(thousands
except share and per share data)
(Unaudited)
|
Three
months ended June 30, |
2006 |
2005 |
Product
sales |
$12,801 |
$14,301 |
Healthcare
services revenue |
11,614 |
7,896 |
Total
revenue |
24,415 |
22,197 |
|
|
|
Cost
and expenses |
|
|
|
Product
sales costs |
9,201 |
11,364 |
|
Healthcare
services costs |
9,468 |
7,742
|
|
|
Selling
and marketing expenses |
2,253 |
2,357 |
|
General
and administrative expenses |
1,843 |
1,498 |
Income (loss)
from continuing operations |
1,650
|
(764) |
Other
(expenses) and income |
|
|
|
Interest
expense |
(187)
|
(94)
|
|
Interest
income |
64 |
37 |
|
Miscellaneous(expense)
income- net |
(15) |
55 |
Income(loss)
from continuing operations before income taxes |
1,512 |
(766) |
(Provision
for) benefit from income taxes |
(987) |
185)
|
Net income
(loss) from continuing operations |
525
|
(581) |
Loss from
discontinued operations |
(13) |
(783) |
Net
income (loss) |
$512 |
$(1,364) |
Net
income (loss) per common share - basic |
$0.08 |
$(0.21) |
Weighted
average shares outstanding |
6,728,354 |
6,503,443 |
CONSOLIDATED
CONDENSED BALANCE SHEETS
(thousands
except share data)
|
June
30, 20056 |
March
31, 20056 |
ASSETS
|
Current
assets: |
|
Cash
and cash equivalents |
$9,727
|
$
9,034 |
|
Trade accounts receivable,
less allowance for doubtful accounts of $2,549 and $2,250, respectively
|
|
|
|
|
Equipment
sales receivables |
9,511
|
7,685
|
|
|
Patient
service receivables |
4,710
|
5,468
|
|
Inventories
|
8,878
|
8,681
|
|
Deferred
income tax |
160
|
177
|
|
Other
current assets |
2,163
|
2,034
|
| |
Current assest
of discontinued operations |
36,871 |
34,756 |
|
Total
current assets |
36,871
|
34,756
|
Property
and equipment, net |
19,406
|
19,119
|
Long-term
deferred income taxes |
2,023
|
2,452
|
Other
assets |
673
|
719
|
|
Total
assets |
$58,973
|
$
57,046 |
LIABILITIES
AND STOCKHOLDERS' EQUITY |
Current
liabilities: |
|
|
|
Accounts
payable and accrued expenses |
|
$22,527
|
$
21,727 |
|
Short-term
portion of capitalized leases |
|
46
|
50
|
|
Short-term
debt and vendor financing |
|
2,347
|
3,080
|
|
Income
taxes payable |
|
288
|
143
|
|
Current liabilities
of discontinued operation |
|
633
|
748
|
|
Total
current liabilities |
25,841
|
25,748
|
Long-term
portion of capitalized leases |
|
83
|
91
|
Long-term
debt and vendor financing |
|
9,758
|
8,569
|
|
Total
liabilities |
|
35,682
|
34,408
|
| 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 - 5,957,623
and 5,946,873 shares issued and outstanding at June
30, 2006 and March
31, 2006 ,respectively
|
60
|
60
|
|
|
Class B stock - 775,000
shares issued and outstanding at June
30, 2006 and March
31, 2006 |
8
|
8
|
|
Additional
capital |
|
36,593
|
36,436
|
|
Accumulated
other comprehensive income |
|
59
|
75
|
|
Accumulated
deficit |
|
(13,429)
|
(13,941)
|
|
Total
stockholders' equity |
|
23,291
|
22,638
|
|
Total
liabilities and stockholders' equity |
|
$58,973
|
$
57,046 |
SEGMENT
INFORMATION
The
Company has two reportable segments: Healthcare Services and Medical
Products. Prior to fiscal year 2006, the Company had three reportable
segments, Medical Capital Equipment, Healthcare Products Distribution
and Healthcare Services. In fiscal 2006, the Company discontinued
the retail sales portion of the Healthcare Products Distribution segment
and the remaining portion of the segment was grouped together with
the Medical Capital Equipment segment to become the Medical Products
Division. The following segment information has been restated to reflect
the new segment structure. We evaluate performance and allocate resources
based on income or loss from continuing operations before income taxes,
not including gains or losses on our investment portfolio or foreign
exchange gains or losses.
|
|
Healthcare
Services |
Medical
Products |
Total
|
As
of June 30, 2006 :
|
|
|
|
Assets
|
$30,892,000
|
$27,424,000
|
$58,316,000
|
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
|
Total
consolidated assets of $58,973,000 as of June 30, 2006 include $657,000
of assets pertaining to our healthcare products retail business which
was discontinued in fiscal year 2006.
|
Healthcare
Services |
Medical
Products |
Total
|
As
of March 31, 2006 :
|
|
|
|
Assets
|
$29,801,000
|
$26,239,000
|
$56,040,000
|
|
For
the three months ended June
30, 2005 :
|
|
|
|
Sales
and service revenue |
$7,896,000
|
$14,301,000
|
$22,197,000
|
Gross
Profit |
n/a
|
2,938,000
|
n/a
|
Gross
Profit % |
n/a
|
21%
|
n/a
|
Loss
from continuing operations before foreign exchange |
$(226,000)
|
$(506,000)
|
$(732,000)
|
Foreign
exchange loss |
|
|
(32,000)
|
Loss
from continuing operations |
|
|
$(764,000)
|
Other
(expense), net |
|
|
(2,000)
|
Loss
from continuing operations before income taxes |
|
|
$(766,000)
|
Total
consolidated assets of $57,046,000 as of March 31, 2006 include $1,006,000
of assets pertaining to our healthcare products retail business which
was discontinued in fiscal year 2006.
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