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BETHESDA,
MARYLAND - August 10, 2005 -
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 its fiscal
year 2006 first quarter ended June 30, 2005. The Company reported
a consolidated 5% decrease in revenues and a net loss for the period.
The healthcare services segment continued its rapid growth and showed
improvement in earnings, while the medical capital equipment segment
experienced quarter to quarter delays in shipments.
Revenue
for the quarter ended June 30, 2005 was $25.2 million, a 5% decrease
from revenue of $26.7 million in the quarter ended June 30, 2004.
The
net loss for the quarter ended June 30, 2005 was $1.4 million, or
a loss per share of $0.21. This compares to net income of $244,000,
or earnings per share of $0.05, for the quarter ended June 30, 2004.
The
Company's balance sheet as of June 30, 2005 shows cash and cash equivalents
of $6.1 million, total assets of $56.6 million, and a current ratio
of 1.2:1 and stockholders' equity of $23.4 million.
Roberta
Lipson, President and CEO of Chindex, commented on the results:
"Our
results in the healthcare services division for the first quarter
showed continuing rapid revenue growth of 36% and improving operating
results as our hospital in Shanghai continues to grow. In the medical
capital equipment division, revenues were down 7% as a result of delays
in the opening of letters of credit by our customers. This decrease
was accompanied by an abnormal increase in merchandise inventory at
quarter-end. In the healthcare products distribution division revenues
were down 27% for the quarter as we continue to experience lackluster
results as we seek to reposition the division with a new strategic
partner in the retail pharmacy business unit. As a result of these
factors we reported a loss on the period.
"Our
business operations in fiscal 2006 have begun to focus on cost reduction
programs at the corporate level and cost containment programs at the
operating division level. Over the twelve month period, we expect
revenue growth to continue generally in line with levels achieved
in 2005 in the medical capital equipment and healthcare services segments.
We have reorganized certain hospital product offerings in the healthcare
products distribution division and are continuing with our search
for a strategic partner in the retail pharmacy business unit of that
segment.
"In
the healthcare services division w e
will continue to ramp-up operations in Shanghai, and expand services
at all facilities. We also expect to receive JCI accreditation for
our main facility in Beijing during the year. In the medical capital
equipment division we will expand our market penetration through the
sales
of new products and continued growth in the use of local sub distributor
networks. In the healthcare products distribution
division we are focusing on the strategic
positioning of the retail pharmacy business unit as we pursue opportunities
to diversify our supplier base through strategic relationships with
potential business partners."
Chindex
is an American company operating in several healthcare sectors of
the Chinese marketplace, including Hong Kong. It provides representative
and distribution services to a number of major multinational companies
including Siemens AG (ultrasound systems) and Guidant (interventional
cardiology products including stents, balloon catheters and guide
wires). Its distribution channels to the retail pharmacy industry
in China have been developed through a relationship with a major multinational
cosmetics manufacturer. It also provides healthcare services through
the operations of its private hospitals in China. With twenty-four
years of experience, over 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 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.
Some
of the information in this 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 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, 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 and those other factors contained in the section titled
"Risk Factors" as set forth on page 6 of the Company's Registration
Statement on Form S-3 (File No. 333-123975) declared effective by
the Securities and Exchange Commission on April 20, 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.
#
# # #
Financial
Summary Attached
CHINDEX
INTERNATIONAL, INC.
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
(thousands
except share and per share data)
(Unaudited)
|
Three
months ended June 30, |
2005
|
2004
|
Product
sales |
$17,341
|
$20,879
|
Healthcare
services revenue |
7,896
|
5,796
|
Total
revenue |
25,237
|
26,675
|
|
|
|
Cost
and expenses |
|
|
|
Product
sales costs |
14,202
|
16,898
|
|
Healthcare
services costs |
7,742
|
4,896
|
|
Selling
and marketing expenses |
2,954
|
2,826
|
|
General
and administrative expenses |
1,854
|
1,552
|
(Loss)
income from operations |
(1,515)
|
503
|
Other
(expenses) and income |
|
|
|
Interest
expense |
(94)
|
(42)
|
|
Interest
income |
37
|
8
|
|
Miscellaneous
income (expense) - net |
23
|
(39)
|
(Loss)
income before income taxes |
(1,549)
|
430
|
Benefit
from (provision for) income taxes |
185
|
(186)
|
Net
(loss) income |
$(1,364)
|
$
244 |
Net
(loss) income per common share - basic |
$
(0.21) |
$
0.05 |
Weighted
average shares outstanding - basic |
6,503,443
|
4,995,910
|
Net
(loss) income per common share - diluted |
$(
0.21) |
$
0.04 |
Weighted
average shares outstanding - diluted |
6,503,443
|
5,729,748
|
CHINDEX
INTERNATIONAL, INC.
CONSOLIDATED
CONDENSED BALANCE SHEETS
(thousands
except share data)
(Unaudited)
|
June
30, 2005 |
March
31, 2005 |
ASSETS
|
Current
assets: |
|
Cash
and cash equivalents |
$6,069
|
$
8,173 |
|
Trade
accounts receivable, less allowance for doubtful accounts of
$2,016 and $1,851, respectively |
|
|
|
|
Equipment
sales receivables |
10,629
|
13,120
|
|
|
Patient
service receivables |
3,105
|
2,706
|
|
Inventories
|
13,437
|
10,856
|
|
Deferred
income tax |
497
|
222
|
|
Other
current assets |
2,163
|
2,034
|
|
Total
current assets |
35,900
|
37,111
|
Property
and equipment, net |
18,177
|
17,620
|
Long-term
deferred income taxes |
1,780
|
1,780
|
Other
assets |
781
|
777
|
|
Total
assets |
$56,638
|
$
57,288 |
LIABILITIES
AND STOCKHOLDERS' EQUITY |
Current
liabilities: |
|
|
|
Accounts
payable and accrued expenses |
|
$24,801
|
$
26,420 |
|
Short-term
portion of capitalized leases |
|
154
|
189
|
|
Short-term
debt and vendor financing |
|
4,003
|
2,839
|
|
Income
taxes payable |
|
18
|
4
|
|
Total
current liabilities |
|
28,976
|
29,452
|
Long-term
portion of capitalized leases |
|
117
|
124
|
Long-term
debt and vendor financing |
|
4,126
|
2,749
|
|
Total
liabilities |
|
33,219
|
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 - 5,728,443 shares issued and outstanding at June
30, 2005 and March
31,2005 |
57
|
57
|
|
|
Class
B stock - 775,000 shares issued and outstanding at June
30, 2005 and March
31, 2005 |
8
|
8
|
|
Additional
paid in capital |
|
35,884
|
35,884
|
|
Accumulated
other comprehensive income |
|
(163)
|
17
|
|
Accumulated
deficit |
|
(12,367)
|
(11,003)
|
|
Total
stockholders' equity |
|
23,419
|
24,963
|
|
Total
liabilities and stockholders' equity |
|
$56,638
|
$
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
Capital Equipment |
Healthcare
Services |
Healthcare
Products Distribution |
Total
|
As
of June 30, 2005: |
|
|
|
|
Assets
|
$24,125,000
|
$22,425,000
|
$10,088,000
|
$56,638,000
|
For
the quarter ended June 30, 2005: |
|
|
Sales
and service revenue |
$9,568,000
|
$7,896,000
|
$7,773,000
|
$25,237,000
|
Gross
Profit |
2,476,000
|
n/a
|
663,000
|
n/a
|
Gross
Profit % |
26%
|
n/a
|
9%
|
n/a
|
(Loss)
from operations |
$(571,000)
|
$(226,000)
|
$(718,000)
|
$(1,515,000)
|
Other
(expense) net |
(34,000)
|
Loss
before income taxes |
$(1,549,000)
|
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|
|
Medical
Capital Equipment |
Healthcare
Services |
Healthcare
Products Distribution |
Total
|
As
of March 31, 2005: |
|
|
|
|
Assets
|
$22,698,000
|
$20,878,000
|
$13,712,000
|
$57,288,000
|
For
the quarter ended June 30, 2004: |
|
|
Sales
and service revenue |
$10,302,000
|
$5,796,000
|
$10,577,000
|
$26,675,000
|
Gross
Profit |
2,928,000
|
n/a
|
1,052,000
|
n/a
|
Gross
Profit % |
28%
|
n/a
|
10%
|
n/a
|
(Loss)
income from operations |
$(25,000)
|
$665,000
|
$(137,000)
|
$503,000
|
Other
(expense) net |
(73,000)
|
Income
before income taxes |
$430,000
|
Inter-segment
transactions were eliminated for the three months ended June 30, 2005
and 2004.
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