Chindex International, Inc. Announces Fiscal 2004 Year End and Fourth Quarter Results; SARS Epidemic and Delayed Government Approvals Impact Results.BETHESDA, Md. -- Chindex International, Inc. (NASDAQ NASDAQ in full National Association of Securities Dealers Automated Quotations U.S. market for over-the-counter securities. Established in 1971 by the National Association of Securities Dealers (NASD), NASDAQ is an automated quotation system that reports on : CHDX), a leading independent American company providing Western healthcare products distribution and medical services in the People's Republic People's Republic n. A political organization founded and controlled by a national Communist party. 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 Delayed opening Postponement of the start of trading in a stock until correction of a gross imbalance in buy and sell orders. Such an imbalance is likely to follow on the heels of a significant event such as a takeover offer. See: Suspended trading. 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 $88.18 million, with a loss on operations of $1.58 million and a net loss of $1.99 million or a loss per share of $0.53. 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 $70.62 million, with income on operations of $133,000 and a net profit of $259,000 or earnings per share of $0.07. Revenue for the fourth quarter of fiscal 2004 was $25.02 million, with income on operations of $213,000 and a net loss of $484,000 or a loss per share of $0.13. This compares to revenue for the three months ended March 31, 2003 of $21.85 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 $6.79 million, total assets of $47.85 million and shareholders' equity Shareholders' Equity A firms' total assets minus its total liabilities. Equivalently, it is share capital plus retained earnings minus treasury shares. Shareholders' equity is the amount by which a company is financed through common and preferred shares. of $17.20 million. Chindex Chairperson chairperson Chairman The head of an academic department. See 'Chair.', Cf Chief. , President and CEO (1) (Chief Executive Officer) The highest individual in command of an organization. Typically the president of the company, the CEO reports to the Chairman of the Board. , 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 Business operations are those activities involved in the running of a business for the purpose of producing value for the stakeholders. Compare business processes. The outcome of business operations is the harvesting of value from assets 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 United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. 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 See finalization. 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 pharmacy, art of compounding and dispensing drugs and medication. The term is also applied to an establishment used for such purposes. Until modern times medication was prepared and dispensed by the physician himself. In the 18th cent. 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, expansion of the clinical services offered at Beijing United and the development process at our proposed third hospital in Xiamen. By the fourth quarter we had substantially resumed our expected growth rates Growth Rates The compounded annualized rate of growth of a company's revenues, earnings, dividends, or other figures. Notes: Remember, historically high growth rates don't always mean a high rate of growth looking into the future. 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 Hong Kong (hŏng kŏng), Mandarin Xianggang, special administrative region of China, formerly a British crown colony (2005 est. pop. 6,899,000), land area 422 sq mi (1,092 sq km), adjacent to Guangdong prov. . It provides representative and distribution services to a number of major multinational companies including Siemens AG Siemens AG German electrical-equipment manufacturer. The first Siemens company, Siemens & Halske, was founded in Berlin in 1847 to build telegraph installations. (diagnostic color ultrasound ultrasound or sonography, in medicine, technique that uses sound waves to study and treat hard-to-reach body areas. In scanning with ultrasound, high-frequency sound waves are transmitted to the area of interest and the returning echoes recorded scanners under the Acuson and Siemens brand names), Becton-Dickinson (including vascular access vascular access Clinical medicine The ability to enter the vascular system; the ease with which the vascular system can be entered for administering therapy or obtaining blood for testing , infusion and critical care systems), Johnson & Johnson (clinical chemistry analyzers), and Guidant (interventional cardiology interventional cardiology Cardiology The subspecialty of cardiology dedicated to the diagnosis, medical and mechanical therapy, pre- and post-procedure management of adult patients with acute and chronic forms of cardiovascular disease amenable to catheter-based products including stents, balloon catheters balloon catheter n. A catheter with an inflatable balloon at its tip, used especially to expand a partially obstructed blood vessel or bodily passage and to measure blood pressure in a blood vessel. Also called balloon-tip catheter. 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 forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks and uncertainties, including risks associated with uncertainties pertaining per·tain intr.v. per·tained, per·tain·ing, per·tains 1. To have reference; relate: evidence that pertains to the accident. 2. 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 here·of adv. Of this. hereof Adverb Formal or law of or concerning this Adv. 1. hereof - of or concerning this; "the twigs hereof are physic" . 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 CIRCUMSTANCES, evidence. The particulars which accompany a fact. 2. The facts proved are either possible or impossible, ordinary and probable, or extraordinary and improbable, recent or ancient; they may have happened near us, or afar off; they are public or after the date hereof or to reflect the occurrence of unanticipated events.
CHINDEX INTERNATIONAL, INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
Three Three Year Year
months months ended ended
ended ended
03/31/04 03/31/03 03/31/04 12/31/02
(Unaudited)
Total Revenue 25,024 21,849 88,183 70,617
Costs and Expenses
Costs of goods sold 16,777 15,147 59,608 47,549
Salaries and payroll
taxes 4,411 3,977 16,952 13,463
Travel and entertainment 845 419 2,905 2,601
Other 2,778 2,084 10,300 6,871
Income (loss) from
operations 213 222 (1,582) 133
Minority interest (8) 0 (8) 50
Loss on equity investments (222) 0 (222) (38)
Other income and (expense)
Interest expense (63) (51) (249) (54)
Interest income 5 14 44 59
Miscellaneous income
(loss), net 4 (29) 94 (131)
Total other (loss) (54) (66) (111) (126)
(Loss) income before income
taxes (71) 156 (1,923) 19
(Provision for) benefit
from income taxes (413) (80) (64) 240
Net (loss) income (484) 76 (1,987) 259
Net (loss) Income per
common share - basic (0.13) 0.02 (0.53) 0.07
Weighted average shares
outstanding - basic 3,824,819 3,708,232 3,758,170 3,699,052
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