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BETHESDA, MARYLAND
- August 14, 2003 - Chindex International, Inc. (NASDAQ:
CHDX), the leading independent American company providing Western
healthcare products and medical services in the People’s Republic
of China, today announced results for the first quarter ended June
30, 2003. Although revenue increased during the period, the Company’s
operating results reflect the significant negative impact of the SARS
epidemic which engulfed the China marketplace for the period from
April to June of this year. The Company noted that the SARS epidemic
has been brought under control as of July and business operations
have returned to normal.
Revenue for the quarter ended June
30, 2003 was $20.4 million with a net loss of $1,338,000 or a loss
per share of $0.72, after giving retroactive effect to the stock split
announced on August 6, 2003 and having a record date of August 18,
2003. This compares to revenue of $15.0 million with a net loss of
$411,000 or a loss per share of $0.24 for same period in 2002, after
giving retroactive effect to the stock split.
Roberta Lipson, President and CEO
of Chindex commented from Beijing:
“During this quarter, the SARS
epidemic delayed significant revenue shipments by our Capital Medical
Equipment (CME) and Healthcare Products Distribution (HPD) divisions.
Results of our Healthcare Services (HCS) division were impacted even
more significantly as many expatriates left the country during the
epidemic or deferred regular hospital visits. While revenues increased
substantially, we had budgeted for even larger revenue increases and
incurred expenses in line with our internal growth projections. We
believe that, as the SARS epidemic has now been brought under control,
we have returned to normal business operations and do not anticipate
the negative impact to carry beyond the quarter ended June 30th. We
expect to recover the delayed sales in our CME and HPD divisions in
subsequent periods and patient volumes at our hospital facilities
in Beijing are returning to anticipated levels. The development work
at our new hospital in Shanghai was also delayed during the SARS period
and we now expect an opening of that facility on or about year end
2003. As we have consistently disclosed in the past, our business
operates on an annualized basis. Consequently, we have had period
to period fluctuations in our results over many years.
“In the longer term, we believe
the SARS experience will in fact provide significant opportunities
for Chindex as a healthcare company in China. We believe that, as
a result of SARS, the Chinese population in general has become much
more aware of issues related to the quality of the medical care they
receive. As the premier supplier of high quality healthcare products
and services to the Chinese market, each of our operating divisions
stands to benefit from this increased awareness. The Chinese government
has also responded with very substantial programs for large scale
investment to upgrade the Chinese healthcare system, most notably
in areas related to infection control, which is an area in which the
Chindex CME and HPD divisions have been active for many years,”
Lipson concluded.
On August 6, 2003 the company announced
that its Board of Directors unanimously approved a two-for-one split
of the Company’s Common Stock, including its Class B Common
Stock. Stockholders of record as of the close of business on August
18, 2003 will receive one additional share of Common Stock for each
share owned on that date in the form of a stock dividend. The financial
results announced in this press release and the Company’s 10-Q
filing for the quarterly period ended June 30, 2003 have given affect
to this stock split retroactively.
Chindex is a leading American company
in healthcare in the Greater Chinese marketplace including Hong Kong.
It provides representative and distribution services to a number of
major multinational companies including Siemens AG (diagnostic color
ultrasound scanners under the Acuson and Siemens brand names), Becton-Dickinson
(including vascular access, infusion and critical care systems), Johnson
& Johnson (clinical chemistry analyzers), 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 hospital corporation in China. With
twenty-two years of experience, over 600 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.
The statements in this
press release that relate to future plans, events or performance are
forward-looking statements that involve risks and uncertainties, including
risks associated with uncertainties pertaining to the Company’s
(i) performance goals, including successful conclusion of efforts
to secure government-backed financing, (ii) future events and earnings,
including revenues from the Company’s developmental businesses
such as healthcare services, (iii) markets, including growth in demand
in China for the Company’s products and services, (iv) proposed
new operations, including expansion of its healthcare services business,
(v) the impact of the SARS epidemic, including the recovery of delayed
or reduced sales; and (vi) the timing of the opening of new hospital
facilities. Actual results, events and performance may differ materially.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes
no obligation to release publicly the result of any revisions to these
forward-looking statements that may be made to reflect events or circumstances
after the date hereof or to reflect the occurrence of unanticipated
events.
CHINDEX INTERNATIONAL, INC. |
CONSOLIDATED CONDENSED STATEMENTS
OF OPERATIONS
(Unaudited)
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Three
Months Ended
June 30 |
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2003 |
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2002 |
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Total sales and service revenue |
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$ |
20,373,000 |
|
$ |
14,968,000 |
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|
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Cost and Expenses |
Cost of goods and services sold |
|
14,703,000 |
|
9,995,000 |
|
|
|
|
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Salaries and payroll taxes |
|
4,344,000 |
|
3,455,000 |
|
|
|
|
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Travel and entertainment |
|
578,000 |
|
540,000 |
|
|
|
|
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Other |
|
2,484,000 |
|
1,575,000 |
|
|
|
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Loss from operations |
( |
1,726,000 |
) ( |
597,000 |
) |
|
|
|
|
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Minority interest |
|
-0- |
( |
23,000 |
) |
|
|
|
|
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Other (expenses) and income |
Interest expense |
|
( |
56,000 |
) |
( |
7,000 |
) |
|
|
|
|
|
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Interest income |
|
15,000 |
|
12,000 |
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Miscellaneous income - net |
|
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41,000 |
|
|
3,000 |
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Loss before income taxes |
( |
1,726,000 |
) ( |
612,000 |
) |
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Benefit from income taxes |
|
388,000 |
|
201,000 |
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Net Loss |
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$( |
1,338,000 |
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)$( |
411,000 |
) |
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Net loss per common share -- basic and diluted |
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$( |
0.72 |
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$( |
0.24 |
) |
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Weighted average shares outstanding -- basic and diluted |
|
1,854,149 |
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1,719,722 |
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