Chindex International Inc. Announces Second Quarter 1998 Results.

BETHESDA, Md.--(BW HealthWire)--Aug. 14, 1998--Chindex International Inc. (Nasdaq:CHDX) (U.S.-China Industrial Exchange, Inc.), the leading independent American company providing Western healthcare products distribution and medical services in the People's Republic of China, Friday announced results for its second quarter and six months ended June 30, 1998. The company showed improvements on the quarterly results over the prior year.

Revenue for this year's second quarter was $5.5 million with a net loss of $671,000, or a loss per share of $0.11. This compares with revenue of $3.8 million with a net loss of $761,000 or loss per share of $0.12 for the same period last year.

Revenue for this year's six month period was $8.4 million with a net loss of $2.1 million or a loss per share of $0.33. This compares with revenue of $9.5 million with a net loss of $596,000 or a loss per share of $0.09 for the same period last year.

The company noted, however, that the foregoing financial results were and continue to be impacted negatively by a variety of factors including delay in the opening of letters of credit for previously signed contracts. The company believes that these delays are principally attributable to bureaucratic delays resulting from the recent restructuring of the Chinese Government and uncertainties regarding exchange rates due to the ongoing Asian financial crisis.

Chindex Chairperson, President and Chief Executive Officer Roberta Lipson, speaking from Beijing, commented on the second quarter results and the factors currently impacting Chindex business: "Our results for the second quarter and six months show the growing positive impact of our restructuring and cost reduction measures we implemented at the end of 1997. Our strategy is to position Chindex for future growth as the premier American company in healthcare products and services in the China market.

"We have effectively implemented our restructuring and cost containment programs in the first half of this year and see the positive effect of that in our results. We expect continued improvement in our future operating results as our revenue diversification program in both healthcare products and services continues to grow.

"We have already announced several exciting new distribution relationships in healthcare instruments, consumables and pharmaceuticals this year. I am also happy to report that the first Chindex private hospital, Beijing United, was formally opened during a ceremony presided over by Secretary of State William Daley this past June during President Clinton's visit to China.

"We will have additional announcements of new distribution relationships as the year goes on. We also expect to announce the first formal expansion of Beijing United, the addition of a dental clinic, before the end of the year.

"The biggest hurdle we face in the near term is financing for our Chinese customers. During President Clinton's visit to China in June, we officially announced the $15 million loan program to provide funding guaranteed by the U.S. Export Import Bank for the purchase of our equipment. We are working hard to secure the final government approvals which would allow this loan to be processed this year.

"In recent months we have seen the impact of the Asian economic problems here in China. We are experiencing delays in our regular foreign trade contract processing. We attribute these factors to general uncertainties in the domestic and international economies related to the ongoing Asian economic situation. These factors, in part, account for the sluggish revenue performance we have seen over the first half of the year compared to last year. We continue to be encouraged by the determination of the Chinese government to limit the impact of these economic conditions."

Chindex is a leading American company in healthcare in the Greater Chinese marketplace including Hong Kong and Macau. It provides representative and distribution services to a number of multinational companies including Acuson, Johnson & Johnson, Kendall Healthcare Products, and Schering AG. It also operates a private hospital corporation in China.

With over sixteen years experience, 200 employees, and operations in the United States, China and Hong Kong, the Chindex strategy is to expand its cross-cultural reach by providing leading edge technologies, quality products and services to Greater China's professional communities. Chindex is listed on Nasdaq under the ticker symbol CHDX. More information is available at the company's Web site: www.chindex.com.

The statements in this news 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 customer orders, demand for products and services, development of markets for the company's products and services and