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BETHESDA,
MARYLAND (JUNE 29, 2004) . . . June 29, 2004 - Chindex International,
Inc. (NASDAQ: CHDX), a leading independent American company providing
Western healthcare products distribution and medical services in the
People's Republic of China, today announced results for its fiscal
year and fourth quarter ended March 31, 2004. Due to the negative
impact of the SARS epidemic, the delayed opening of its hospital in
Shanghai and delayed governmental approvals of financing programs,
the Company reported a net loss for the fiscal year.
Revenue
for fiscal 2004 was $88.2 million, with a loss on operations of $1.8
million and a net loss of $1.9 million or a loss per share of $0.50.
This compares to revenue for the twelve months ended December 31,
2002 (the most recently-completed full fiscal year prior to the change
in 2003 of the Company's fiscal year end from December 31 to March
31) of $70.6 million, with income on operations of $95,000 and a net
profit of $259,000 or earnings per share of $0.07.
Revenue
for the fourth quarter of fiscal 2004 was $25.0 million, with income
on operations of $213,000 and a net loss of $384,000 or a loss per
share of $0.10. This compares to revenue for the three months ended
March 31, 2003 of $21.9 million with income on operations of $222,000
and a net profit of $76,000 or earnings per share of $0.02.
As
of March 31, 2004, the Company had cash and cash equivalents of $6.8
million, total assets of $47.9 million, a current ratio of 1.3:1,
and shareholders' equity of $17.3 million.
Chindex Chairperson, President
and CEO, Roberta Lipson, speaking from Beijing, commented on the results
and year's performance:
"Our operating results
throughout fiscal 2004 were impacted in all three of our divisions
by several events beyond our control.
First was the extraordinary
impact of the SARS epidemic. From April through July of 2003, we saw
a substantial slow-down of business operations here in China. It was
a factor in our reduced revenue growth in all divisions throughout
the year, while our budgeted expense commitments for the year were
based on higher revenue expectations.
Second was the delay in
the opening of our second United Family Hospital in Shanghai. This
was also largely attributable to the SARS epidemic, as the delay was
related to design changes and resulting government reapproval procedures
that were necessary in the post-SARS environment. As a result of this
delay, we were forced to continue to incur expense costs in that project
throughout the year without having revenue to offset them. The hospital
is now scheduled to open in September 2004.
Third was the impact of
the delays in finalizing the governmental framework agreements between
China and the United States that are necessary for our loan programs
to be executed. Our division that sells medical capital equipment
has had significant revenue from these financings in prior periods,
but there were no such financings in fiscal 2004. These framework
agreements are aspects of the bilateral trade relationship between
China and the U.S. and are up for multiyear renewal this year. Although
there have been delays in the renewal negotiation process, we expect
the framework agreements to be finalized later this year.
In spite of these adverse
developments, each of our divisions contributed to our consolidated
revenue growth of 25% over the prior year. Our division that distributes
healthcare products reported revenue growth of 33% and continues to
focus on the growth of its distribution channels and product offerings
in both its retail pharmacy and hospital sales units. Our division
that sells medical capital equipment reported revenue growth of 18%
and continues to focus on the expansion of sales channels to hospital
equipment markets. Our division that provides healthcare services
reported revenue growth of 23% and continues to focus on the opening
of Shanghai United Family Hospital in mid-2004, expansion of the clinical
services offered at Beijing United and the development process at
our third hospital in Xiamen. By the fourth quarter we had substantially
resumed our expected growth rates in each division.
We regularly invest in building
platforms that position the Company for growth and profitability in
the Chinese marketplace. As in our past experiences of adverse developments
beyond our control, during fiscal 2004 we made determined and proactive
decisions to continue to implement our long term strategy. Accordingly,
we continued to invest prudently at both the corporate level and the
operating division level in the development of infrastructure systems
to support future growth. Since the end of fiscal 2004, we successfully
completed a private placement of our common stock that will provide
additional funding for our growth programs," Lipson concluded.
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 700
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, (vi) the timing of the opening of new hospital facilities,
and (vii) the availability of loan funds. 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.
# # #
Financial Summary Attached
| U.S.-CHINA INDUSTRIAL EXCHANGE,
INC. CONSOLIDATED STATEMENTS OF OPERATIONS |
| |
Three Months Ended |
|
Year Ended |
| |
03/31/04 (Unaudited) |
|
03/31/03 |
|
03/31/04 |
|
12/31/02 |
|
| Total sales and service revenue |
|
$ |
25,024,000 |
|
$ |
21,849,000 |
|
$ |
88,183,000 |
|
$ |
70,617,000 |
|
| Cost and Expenses |
Cost
of goods sold
|
|
16,777,000 |
|
15,147,000 |
|
59,608,000 |
|
47,549,000 |
|
Salaries
and payroll taxes
|
|
4,411,000 |
|
3,977,000 |
|
16,952,000 |
|
13,463,000 |
|
Travel
and entertainment
|
|
845,000 |
|
419,000 |
|
2,905,000 |
|
2,601,000 |
|
Other
|
|
2,778,000 |
|
2,084,000 |
|
10,300,000 |
|
6,871,000 |
|
| Income (loss) from operations |
|
213,000 |
|
222,000 |
( |
1,582,000 |
|
) |
133,000 |
|
| Minority Interest |
( |
8,000 |
) |
|
0 |
|
( |
8,000 |
|
) |
50,000 |
|
| Loss on equity investments |
( |
222,000 |
) |
|
0 |
|
( |
222,000 |
) |
( |
38,000 |
) |
| Other income and (expense) |
Interest
expense
|
|
( |
63,000 |
) |
( |
51,000 |
) |
( |
249,000 |
) |
( |
54,000 |
) |
Interest
income
|
|
5,000 |
|
14,000 |
|
44,000 |
|
59,000 |
|
Miscellaneous
income (loss), net
|
|
|
4,000 |
|
( |
29,000 |
) |
|
94,000 |
|
( |
131,000 |
) |
Total other (loss)
|
|
( |
54,000 |
) |
( |
66,000 |
) |
( |
111,000 |
) |
( |
126,000 |
) |
| (Loss) income before income taxes |
( |
71,000 |
) |
156,000 |
( |
1,923,000 |
) |
19,000 |
|
| (Provision for) benefit from income taxes |
|
( |
313,000 |
) |
( |
80,000 |
) |
|
36,000 |
|
|
240,000 |
|
| Net (loss) income |
|
( |
384,000 |
) |
|
76,000 |
|
( |
1,887,000 |
) |
|
259,000 |
|
| Net (loss) income per common share - basic |
|
( |
0.10 |
) |
|
0.02 |
|
( |
0.50 |
) |
|
0.07 |
|
| Weighted average shares outstanding - basic |
|
3,824,819 |
|
3,708,232 |
|
3,758,170 |
|
3,699,052 |
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