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| CHINDEX
INTERNATIONAL, INC.
ANNOUNCES
RESULTS FOR THE QUARTER AND SIX MONTHS ENDED
SEPTEMBER
30, 2006
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BETHESDA,
MARYLAND - - November 13, 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 quarter and six months ended September 30,
2006. Both operating divisions of the Company reported profitable
results.
Revenue
for the quarter ended September 30, 2006 was $26.5 million, a 16%
increase over revenue of $22.7 million in the quarter ended September
30, 2005 . Net income from continuing operations for the quarter ended
September 30, 2006 was $1.1 million, or earnings per basic share on
continuing operations of $0.17. This compares to a net income from
continuing operations of $0.2 million, or earnings per basic share
on continuing operations of $0.03 for the quarter ended September
30, 2005 .
Revenue
for the six months ended September 30, 2006 was $50.9 million, a 13%
increase over revenue of $44.9 million in the six months ended September
30, 2005 . Net income from continuing operations for the six months
ended September 30, 2006 was $1.7 million, or earnings per basic share
on continuing operations of $0.25. This compares to a net loss from
continuing operations of $0.4 million, or a loss per basic share on
continuing operations of $0.06 for the six months ended September
30, 2005 .
The
Company's balance sheet as of September 30, 2006 shows cash, cash
equivalents and restricted cash of $8.3 million, total assets of $60.9
million, a current ratio of 1.6:1 and stockholders' equity of $24.8
million.
Roberta
Lipson, Chindex CEO commented on the results for the quarter: "During
the quarter we reported profitable results in both divisions. In the
Healthcare Services division, we also announced the first global comprehensive
Preferred Provider Organization PPO)
insurance product ever issued in China , for which our network is
the primary provider. This was a long anticipated new chapter in our
development program for the United Family Healthcare network which
will help us to further expand our market access to the local Chinese
patient base in both the Beijing and Shanghai markets. In the Medical
Products division we shipped the first
da Vinci surgical robotic system in mainland China during the quarter.
This is the latest in a long history of Chindex technology 'firsts'
in the Chinese healthcare markets."
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,
updates and additions to those "Risk Factors" in our interim
reports on Form 10-Q 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.
CHINDEX
INTERNATIONAL, INC.
CONSOLIDATED
CONDENSED STATEMENTS OF OPERATIONS
thousands
except share and per share data)
Unaudited)
|
Three
months ended
September
30, |
Six
months ended
September
30, |
2006
|
2005
|
2006
|
2005
|
Product
sales |
$15,686
|
$14,260
|
$28,487
|
$28,561
|
Healthcare
services revenue |
10,794
|
8,473
|
22,407
|
16,369
|
Total
revenue |
26,480
|
22,733
|
50,894
|
44,930
|
|
|
|
|
|
Cost
and expenses |
|
|
|
|
|
Product
sales costs |
12,048
|
10,501
|
21,248
|
21,865
|
|
Healthcare
services costs |
9,529
|
7,666
|
18,997
|
15,408
|
|
Selling
and marketing expenses |
2,334
|
2,671
|
4,587
|
5,027
|
|
General
and administrative expenses |
1,688
|
1,352
|
3,530
|
2,849
|
Income
loss) from continuing operations |
881
|
543
|
2,532
|
219)
|
Other
expenses) and income |
|
|
|
|
|
Interest
expense |
199)
|
99)
|
386)
|
193)
|
|
Interest
income |
60
|
31
|
124
|
68
|
|
Miscellaneous
income – net |
20
|
27
|
5
|
81
|
Income
loss) from continuing operations before income taxes |
762
|
502
|
2,275
|
263)
|
Benefit
from provision for) income taxes |
368
|
313)
|
619)
|
128)
|
Net
income loss) from continuing operations |
1,130
|
189
|
1,656
|
391)
|
Loss
from discontinued operations |
251)
|
906)
|
264)
|
1,689)
|
Net
income loss) |
$879
|
$
717)
|
$
1,392 |
$
2,080) |
Net
income loss) per common share - basic |
|
|
|
|
Continuing
operations |
$
.17 |
$
.03 |
$
.25 |
$
.06) |
Discontinued
operations |
.04)
|
.14)
|
.04)
|
.26)
|
Net
income loss) |
$
.13 |
$
.11) |
$
.21 |
$
.32) |
Weighted
average shares outstanding - basic |
6,753,902
|
6,514,244
|
6,741,197
|
6,508,903
|
|
|
|
|
|
Net
income loss) per common share - diluted |
|
|
|
|
Continuing
operations |
$
.15 |
$
.03 |
$
.22 |
$
.06) |
Discontinued
operations |
.03)
|
.14)
|
.04)
|
.26)
|
Net
income loss) |
$
.12 |
$.11)
|
$
.18 |
$
.32) |
Weighted
average shares outstanding - diluted |
7,557,288
|
6,922,044
|
7,535,027
|
6,508,903
|
CHINDEX
INTERNATIONAL, INC.
CONSOLIDATED
CONDENSED BALANCE SHEETS
(thousands
except share dats)
(Unaudited)
|
September
30, 2006
|
March
31, 2006 |
ASSETS
|
Current
assets: |
|
Cash
and cash equivalents |
$8,119 |
$9,034 |
| |
Restricted
cash |
201 |
383 |
|
Trade
accounts receivable, less allowance for doubtful accounts of
$2,796 and $2,250, respectively |
|
|
|
|
|
Product
sales receivables |
11,779
|
7,685 |
|
|
Patient
service receivables |
4,715 |
5,468 |
|
Inventories,
net |
8,793 |
8,681 |
|
Deferred
income tax |
1,815 |
177 |
|
Other
current assets |
4,291 |
2,322 |
| |
Current assests
of discontinued operations |
99 |
1,006 |
|
Total
current assets |
39,812 |
34,756
|
Property
and equipment, net |
19,365 |
19,119
|
Long-term
deferred income taxes |
1,318 |
2,452 |
Other
assets |
454 |
719 |
|
Total
assets |
$60,949 |
$
57,046 |
| |
|
|
|
LIABILITIES
AND STOCKHOLDERS' EQUITY |
Current
liabilities: |
|
|
|
Accounts
payable and accrued expenses |
|
$23,701 |
$
21,727 |
|
Short-term
portion of capitalized leases |
|
42 |
50
|
|
Short-term
debt and vendor financing |
|
975
|
3,080 |
|
Income
taxes payable |
|
602 |
143 |
| |
Current liabilities
of discontinued operations |
|
304 |
748 |
|
Total
current liabilities |
|
25,624
|
25,748 |
Long-term
portion of capitalized leases
|
76 |
91
|
Long-term
debt and vendor financing
|
10,450 |
8,569 |
|
Total
liabilities |
|
36,150 |
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 - 6,043,885 and 5,946,873 shares issued and outstanding
at September 30, 2006 and March 31, 2006 , respectively |
61 |
60 |
|
|
Class
B stock - 775,000 shares issued and outstanding at September
30, 2006 and March 31, 2006 |
8
|
8
|
|
Additional
paid in capital
|
37,203
|
36,436 |
|
Accumulated
other comprehensive income
|
76
|
75
|
|
Accumulated
deficit
|
12,549)
|
13,941)
|
|
Total
stockholders' equity
|
24,799 |
22,638 |
|
Total
liabilities and stockholders' equity
|
$60,949 |
$
57,046 |
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:"
|
Healthcare
Services |
Medical
Products |
Total
|
As
of September 30, 2006 :
|
|
|
|
Assets
|
$31,305,000
|
$29,545,000
|
$60,850,000
|
For
the three months ended September
30, 2006 :
|
|
|
|
Sales
and service revenue |
$10,794,000
|
$15,686,000
|
$26,480,000
|
Gross
Profit |
n/a
* |
3,638,000
|
n/a
|
Gross
Profit % |
n/a
* |
23%
|
n/a
|
Income
from continuing operations before foreign exchange |
$695,000
|
$83,000
|
$778,000
|
Foreign
exchange gain |
|
|
103,000
|
Income
from continuing operations |
|
|
$881,000
|
Other
expense), net |
|
|
119,000)
|
Income
from continuing operations before income taxes |
|
|
$762,000
|
Total
consolidated assets of $60,949,000 as of September 30, 2006 include
$99,000 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 September
30, 2005 :
|
|
|
|
Sales
and service revenue |
$8,473,000
|
$14,260,000
|
$22,733,000
|
Gross
Profit |
n/a
* |
3,759,000
|
n/a
|
Gross
Profit % |
n/a
* |
26%
|
n/a
|
Income
Loss) from continuing operations before foreign exchange |
$373,000
|
$192,000)
|
$181,000
|
Foreign
exchange gain |
|
|
362,000
|
Income
from continuing operations |
|
|
$543,000
|
Other
expense), net |
|
|
41,000)
|
Income
from continuing operations before income taxes |
|
|
$502,000
|
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.
|
Healthcare
Services |
Medical
Products |
Total
|
As
of September 30, 2006 :
|
|
|
|
Assets
|
$31,305,000
|
$29,545,000
|
$60,850,000
|
For
the six months ended September
30, 2006 :
|
|
|
|
Sales
and service revenue |
$22,407,000
|
$28,487,000
|
$50,894,000
|
Gross
Profit |
n/a
* |
7,239,000
|
n/a
|
Gross
Profit % |
n/a
* |
25%
|
n/a
|
Income
from continuing operations before foreign exchange |
$2,282,000
|
$179,000
|
$2,461,000
|
Foreign
exchange gain |
|
|
71,000
|
Income
from continuing operations |
|
|
$2,532,000
|
Other
expense), net |
|
|
257,000)
|
Income
from continuing operations before income taxes |
|
|
$2,275,000
|
Total
consolidated assets of $60,949,000 as of September 30, 2006 include
$99,000 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 six months ended September
30, 2005 :
|
|
|
|
Sales
and service revenue |
$16,369,000
|
$28,561,000
|
$44,930,000
|
Gross
Profit |
n/a
* |
6,696,000
|
n/a
|
Gross
Profit % |
n/a
* |
23%
|
n/a
|
Income
loss) from continuing operations before foreign exchange |
$148,000
|
$698,000)
|
$550,000)
|
Foreign
exchange gain |
|
|
331,000
|
Loss
from continuing operations |
|
|
$219,000)
|
Other
expense), net |
|
|
44,000)
|
Loss
from continuing operations before income taxes |
|
|
$263,000)
|
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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