BEIJING, Feb. 18, 2011 /PRNewswire-Asia-FirstCall/ --
China Medical Technologies, Inc. (the "Company") (Nasdaq: CMED), a
leading China-based advanced
in-vitro diagnostic ("IVD") company, announced its unaudited
financial results for the third fiscal quarter ended December 31, 2010 ("3Q FY2010") today.
3Q FY2010 Highlights
|
For the
Three Months Ended
|
|
|
|
December
31,
2009
|
December
31,
2010
|
December
31,
2010
|
|
|
|
RMB
|
RMB
|
US$
|
%
change
|
|
|
(in
thousands except for per ADS information)
|
|
|
Revenues,
net
|
172,320
|
223,948
|
33,932
|
30.0
|
|
Adjusted
EBITDA
|
92,133
|
131,544
|
19,931
|
42.8
|
|
Non-GAAP net
income
|
45,618
|
75,642
|
11,461
|
65.8
|
|
Non-GAAP diluted earnings per
ADS*
|
1.74
|
2.87
|
0.43
|
64.9
|
|
|
|
|
|
|
Nine Months FY2010 Highlights
|
For the Nine
Months Ended
|
|
|
|
December
31,
2009
|
December
31,
2010
|
December
31,
2010
|
|
|
|
RMB
|
RMB
|
US$
|
%
change
|
|
|
(in
thousands except for per ADS information)
|
|
|
Revenues,
net
|
547,343
|
611,952
|
92,720
|
11.8
|
|
Adjusted
EBITDA
|
287,989
|
353,010
|
53,486
|
22.6
|
|
Non-GAAP net
income
|
135,819
|
198,054
|
30,008
|
45.8
|
|
Non-GAAP diluted earnings per
ADS*
|
5.15
|
7.55
|
1.14
|
46.6
|
|
|
|
|
|
|
Outlook for 4Q FY2010
- Target revenues are expected to be approximately RMB234.0 million (US$35.5
million), representing a year-over-year increase of
33.2%.
- Target non-GAAP net income is expected to be approximately
RMB71.0 million (US$10.8 million), representing a year-over-year
increase of 37.9%. The Company has taken into account the impact of
incremental cash interest arising from the issuance of 2016
Convertible Notes in December 2010 to
refinance its 2011 Convertible Notes.
- Target non-GAAP diluted earnings per ADS* is expected to be
approximately RMB2.69 (US$0.41), representing a year-over-year increase
of 35.9%.
Outlook for FY2010
- Target revenues are expected to be approximately RMB846.0 million (US$128.2
million), representing a year-over-year increase of
17.0%.
- Target non-GAAP net income is expected to be approximately
RMB269.1 million (US$40.8 million), representing a year-over-year
increase of 43.7%.
- Target non-GAAP diluted earnings per ADS* is expected to be
approximately RMB10.24 (US$1.55), representing a year-over-year increase
of 43.6%.
The above targets are based on the Company's current views on
the operating and market conditions, which are subject to
change.
*One American Depositary Share ("ADS") = 10 ordinary
shares
See "Non-GAAP Measure Disclosures" below, where the impact of
certain items on reported results is discussed.
"We are pleased with the results of our 3Q FY2010," commented
Mr. Xiaodong Wu, Chairman and Chief
Executive Officer of the Company. "The business of HPV-DNA chips
started to contribute increasing revenue to our molecular
diagnostic division. We expect our molecular diagnostic revenues to
keep driving the growth of the Company."
3Q FY2010 Unaudited Financial Results
The Company reported revenues of RMB223.9
million (US$33.9 million) for
3Q FY2010, representing a 30.0% increase from the corresponding
period of FY2009.
The Company's revenues are currently generated from two
segments, molecular diagnostic systems and immunodiagnostic
systems. The molecular diagnostic system segment includes FISH
products and SPR products while the immunodiagnostic system segment
consists of ECLIA products. The customers of the molecular
diagnostic system segment, that is, Tier 1 hospitals in
China, are being served by the
Company's direct sales personnel.
Molecular diagnostic system sales for 3Q FY2010 were
RMB135.1 million (US$20.5 million), representing a 40.5% increase
from the corresponding period of FY2009. The year-over-year
increase was primarily due to the increase in usage of the
Company's FISH probes by existing and new hospital customers as
well as the sales of SPR-based HPV-DNA chips of RMB9.2 million (US$1.4
million) to hospitals during 3Q FY2010.
Immunodiagnostic system sales for 3Q FY2010 were RMB88.9 million (US$13.5
million), representing a 16.7% increase from the
corresponding period of FY2009. The year-over-year increase was
primarily due to the increase in sales of the Company's ECLIA
reagent kits to existing and new distributors.
Gross margin was 58.1% for 3Q FY2010 which decreased
year-over-year from 63.4% for the corresponding period of FY2009.
The year-over-year decrease was primarily due to the classification
of amortization of SPR intangible assets from operating expenses to
cost of revenues after the commencement of sales of HPV-DNA chips
in 2Q FY2010. Non-GAAP gross margin was 79.9% for 3Q FY2010 which
increased year-over-year from 76.4% for the corresponding period of
FY2009. The year-over-year increase in non-GAAP gross margin was
primarily due to more contribution from the sales of FISH probes
which generate higher gross margin.
Research and development expenses were RMB12.3 million (US$1.9
million) for 3Q FY2010, representing a 15.0% year-over-year
increase. Non-GAAP research and development expenses were
RMB11.2 million (US$1.7 million) for 3Q FY2010, representing a
22.2% year-over-year increase. The year-over-year increase was
primarily due to product research and development for FISH probes
and SPR chips.
Sales and marketing expenses were RMB24.4
million (US$3.7 million) for
3Q FY2010, representing a 28.2% year-over-year increase. Non-GAAP
sales and marketing expenses were RMB24.2
million (US$3.7 million) for
3Q FY2010, representing a 27.2% year-over-year increase. The
year-over-year increase was primarily due to an increase in direct
sales efforts for molecular diagnostic systems.
General and administrative expenses were RMB21.0 million (US$3.2
million) for 3Q FY2010, representing an 18.8% year-over-year
decrease. Non-GAAP general and administrative expenses were
RMB13.7 million (US$2.1 million) for 3Q FY2010, representing a
20.6% year-over-year decrease. The year-over-year decrease was
primarily due to decrease in professional fees and traveling
expenses for 3Q FY2010.
Interest expense on convertible notes was RMB32.8 million (US$5.0
million) for 3Q FY2010. Non-GAAP interest expense on
convertible notes was RMB26.7 million
(US$4.0 million) for 3Q FY2010. As of
December 31, 2010, the Company's
outstanding convertible notes of US$29.1
million, US$248 million and
US$150 million bear interest at 3.5%,
4% and 6.25% per annum, respectively, and will mature in
November 2011, August 2013 and December
2016, respectively.
Interest expense on amortization of convertible notes issuance
costs was RMB3.9 million
(US$0.6 million) for 3Q FY2010.
Interest expense on amortization of share lending costs was
RMB2.4 million (US$0.4 million) for 3Q FY2010.
Other income, net for 3Q FY2010 was RMB22.4 million (US$3.4
million), primarily due to a gain on repurchase of 2011
Convertible Notes. Non-GAAP other expense, net was RMB3.7 million (US$0.6
million) for 3Q FY2010.
Income tax expense was RMB25.2
million (US$3.8 million) for
3Q FY2010. The significant income tax expense was primarily because
certain expenses of the Company such as stock compensation expense,
amortization of acquired intangible assets and interest expense of
convertible notes were not deductible for income tax purpose. In
addition, the Company was required to accrue for withholding income
tax on distributable earnings generated in China during 3Q FY2010.
Net income was RMB35.8 million
(US$5.4 million) for 3Q FY2010, which
improved significantly from the net loss of RMB24.7 million for the corresponding period of
FY2009. Non-GAAP net income was RMB75.6
million (US$11.5 million) for
3Q FY2010, representing a 65.8% increase from the corresponding
period of FY2009. The significant year-over-year increase was
primarily due to the increase in both molecular diagnostic system
sales and immunodiagnostic system sales.
Earnings before interest, taxes, depreciation and amortization
("EBITDA") was RMB148.9 million
(US$22.6 million) for 3Q FY2010,
representing an 81.8% increase from the corresponding period of
FY2009. The significant year-over-year increase in EBITDA was
primarily due to the increase in both molecular diagnostic system
sales and immunodiagnostic system sales as well as a gain on
repurchase of 2011 Convertible Notes.
Adjusted EBITDA was RMB131.5
million (US$19.9 million) for
3Q FY2010, representing a 42.8% increase from the corresponding
period of FY2009. The reason for the increase is also due to
increased sales in 3Q FY2010.
Stock compensation expense for 3Q FY2010 was RMB8.8 million (US$1.3
million), of which RMB0.1
million was allocated to cost of revenues, RMB1.2 million to research and development
expenses, RMB0.2 million to sales and
marketing expenses and RMB7.3 million
to general and administrative expenses.
Amortization of acquired intangible assets for 3Q FY2010 was
RMB48.7 million (US$7.4 million) which was all allocated to cost
of revenues.
As of December 31, 2010, the
Company's cash and cash equivalents were RMB1,119.4 million (US$169.6 million). Net cash generated from
operating activities for 3Q FY2010 was RMB49.7 million (US$7.5
million). Net cash generated from investing activities for
3Q FY2010 was RMB77.9 million
(US$11.8 million). Net cash generated
from financing activities for 3Q FY2010 was RMB190.5 million (US$28.9
million).
As of December 31, 2010, the
Company's net accounts receivable was RMB397.7 million (US$60.3
million), representing an increase of 19.4% from the balance
at September 30, 2010. The increase
in net accounts receivable was primarily due to the increase in
molecular diagnostic system sales to hospital customers.
Issuance of 2016 Convertible Notes
In December 2010, the Company
issued US$150 million 6.25%
convertible senior notes due December
2016 ("2016 Convertible Notes"). The Company used a large
portion of the net proceeds from the 2016 Convertible Notes to
repurchase US$105.9 million aggregate
principal amount of its outstanding convertible notes due
November 2011 ("2011 Convertible
Notes") and recorded a gain of approximately US$4.8 million and a reduction of additional
paid-in capital of approximately US$8.6
million. The remaining balance of 2011 Convertible Notes was
US$29.1 million in principal amount
on December 31, 2010. The Company
will continue to look for opportunities to repurchase the remaining
2011 Convertible Notes before maturity in November 2011. Approximately 900,000 ADSs were
returned to the Company as treasury stock following the repurchase
of 2011 Convertible Notes under the prepaid forward arrangement in
connection with the issuance of 2011 Convertible Notes. Upon
the issuance of 2016 Convertible Notes, the Company expensed off
the costs of approximately US$0.8
million in connection with the suspended high yield note
offering in December 2010.
Nine Months FY2010 Unaudited Financial Results
Revenues were RMB612.0 million
(US$92.7 million) for the nine months
ended December 31, 2010, representing
an 11.8% increase from the corresponding period of FY2009. The
year-over-year increase in revenues was primarily due to the
increase in molecular diagnostic system sales.
Gross margin was 59.8% for the nine months ended December 31, 2010 which decreased year-over-year
from 67.9% for the corresponding period of FY2009. The
year-over-year decrease was primarily due to the classification of
amortization of SPR intangible assets from operating expenses to
cost of revenues after the commencement of sales of HPV-DNA chips
in 2Q FY2010. Non-GAAP gross margin was 79.6% for the nine months
ended December 31, 2010 which
decreased year-over-year from 80.2% for the corresponding period of
FY2009. The year-over-year decrease in non-GAAP gross margin was
primarily due to the impact of the price reduction for ECLIA
reagent kits.
Research and development expenses were RMB33.9 million (US$5.1
million) for the nine months ended December 31, 2010, representing a 6.0%
year-over-year increase. Non-GAAP research and development expenses
were RMB30.1 million (US$4.6 million) for the nine months ended
December 31, 2010, representing an
11.4% year-over-year increase. The year-over-year increase was
primarily due to product research and development for FISH probes
and SPR chips.
Sales and marketing expenses were RMB64.2
million (US$9.7 million) for
the nine months ended December 31,
2010, representing a 35.5% year-over-year increase. Non-GAAP
sales and marketing expenses were RMB63.7
million (US$9.6 million) for
the nine months ended December 31,
2010, representing a 34.5% year-over-year increase. The
year-over-year increase was primarily due to an increase in direct
sales efforts for molecular diagnostic systems.
General and administrative expenses were RMB71.2 million (US$10.8
million) for the nine months ended December 31, 2010, representing a 39.6%
year-over-year decrease. Non-GAAP general and administrative
expenses were RMB47.0 million
(US$7.1 million) for the nine months
ended December 31, 2010, representing
a 49.5% year-over-year decrease. The year-over-year decrease was
primarily because the Company incurred costs for the independent
internal investigation during the nine-month period ended
December 31, 2009 which did not recur
in 2010 and lower allowance for doubtful accounts.
Net income was RMB66.5 million
(US$10.1 million) for the nine months
ended December 31, 2010, which
improved significantly from the net loss of RMB74.4 million for the corresponding period of
FY2009. Non-GAAP net income was RMB198.1
million (US$30.0 million) for
the nine months ended December 31,
2010, representing a 45.8% increase from the corresponding
period of FY2009.
EBITDA was RMB397.9 million
(US$60.3 million) for the nine months
ended December 31, 2010, representing
a 54.1% increase from the corresponding period of FY2009.
Adjusted EBITDA was RMB353.0
million (US$53.5 million) for
3Q FY2010, representing a 22.6% increase from the corresponding
period of FY2009.
Stock compensation expense for the nine months ended
December 31, 2010 was RMB28.6 million (US$4.3
million), of which RMB0.3
million was allocated to cost of revenues, RMB3.7 million to research and development
expenses, RMB0.5 million to sales and
marketing expenses and RMB24.1
million to general and administrative expenses.
Amortization of acquired intangible assets for the nine months
ended December 31, 2010 was
RMB147.8 million (US$22.4 million), of which RMB120.5 million was allocated to cost of
revenues and RMB27.3 million to
operating expenses.
For the convenience of readers, certain RMB amounts have been
translated into U.S. dollars at the rate of RMB6.6000 to US$1.00, the noon buying rate in
New York City for cable transfers
of RMB per U.S. dollar as set forth in the H.10 weekly statistical
release of the Federal Reserve Board, as of Thursday, December 30, 2010. No representation is
made that the RMB amounts could have been or could be converted
into U.S. dollars at that rate or at any other rate on December 30, 2010 or at any other dates.
Update on Receivable from Chengxuan
As of December 31, 2010, the
remaining amount of receivable due December
31, 2010 from Chengxuan, one of the Company's major
shareholders and owned by Mr. Xiaodong
Wu, was reduced from US$30 million to
US$18 million. This receivable relates to the sale of the
Company's HIFU business to Chengxuan. Chengxuan made two payments
to the Company in the amount of US$8
million and US$4 million
during 3Q FY2010. Subsequently, Chengxuan made another payment of
US$3 million to the Company in
January 2011. Chengxuan indicated to
the Company that payments will be made to the Company to pay off
the remaining balance together with interest thereon before
June 30, 2011.
Non-GAAP Measure Disclosures
The Company reported its operating results in accordance with
U.S. generally accepted accounting principles ("GAAP") for the
three months and nine months ended December
31, 2009 and 2010, respectively. The Company also presented
non-GAAP information, which included EBITDA and adjusted EBITDA,
for the three months and nine months ended December 31, 2009 and 2010, respectively. The
non-GAAP measures are defined below:
- Non-GAAP gross profit represents gross profit reported
in accordance with GAAP, adjusted for the effects of stock
compensation expense and amortization of acquired intangible
assets.
- Non-GAAP gross margin represents non-GAAP gross profit
divided by net revenues.
- Non-GAAP research and development expenses represent
research and development expenses reported in accordance with GAAP,
adjusted for the effects of stock compensation expense.
- Non-GAAP sales and marketing expenses represent sales
and marketing expenses reported in accordance with GAAP, adjusted
for the effects of stock compensation expense.
- Non-GAAP general and administrative expenses represent
general and administrative expenses reported in accordance with
GAAP, adjusted for the effects of stock compensation expense.
- Non-GAAP operating income represents operating income
reported in accordance with GAAP, adjusted for the effects of stock
compensation expense and amortization of acquired intangible
assets.
- Non-GAAP interest expense on convertible notes
represents interest expense on convertible notes reported in
accordance with GAAP, adjusted for the effects of non-cash interest
expense of convertible notes.
- Non-GAAP other income (expense),
net represents other income and expense, net reported in
accordance with GAAP, adjusted for the effects of gain on
repurchase of convertible notes as well as high yield note offering
expenses.
- Non-GAAP net income represents net income reported in
accordance with GAAP, adjusted for the effects of stock
compensation expense, amortization of acquired intangible assets,
non-cash interest expense of convertible notes, non-cash interest
expense for amortization of share lending costs, gain on repurchase
of convertible notes as well as high yield note offering
expenses.
- Non-GAAP earnings per ADS represents non-GAAP net income
divided by the weighted average number of ADSs used in computing
basic and diluted earnings per ADS in accordance with GAAP.
- EBITDA represents net income reported in accordance with
GAAP, adjusted for the effects of interest income, interest
expenses, income tax expense, depreciation and amortization.
- Adjusted EBITDA represents EBITDA adjusted for the
effects of stock compensation expense, gain on repurchase of
convertible notes as well as high yield note offering
expenses.
Non-GAAP financial measures are used by the Company in its
financial and operating decision-making because management believes
they reflect the Company's ongoing business in a manner that allows
meaningful period-to-period comparison. The Company's management
believes that these non-GAAP financial measures provide useful
information to investors and others in understanding and evaluating
the Company's current operating performance and future prospects in
the same manner as management does, if they so choose.
The presentation of this additional financial information is not
intended to be considered in isolation or as a substitute for the
financial information prepared and presented in accordance with
GAAP. For a reconciliation of the non-GAAP financial measures to
the most directly comparable GAAP financial measures, please see
the financial information included with this earnings
announcement.
Conference Call
The Company's senior management team will host an earnings
conference call at 8:00 a.m. U.S.
Eastern Time on February 18, 2011 (or
9:00 p.m. Beijing/Hong
Kong time on the same date) to discuss the results following
this earnings announcement.
The dial-in details for the live conference call are as
follows:
- U.S. Toll Free
Number 1-866-783-2141
|
|
- International Dial-in
Number 1-857-350-1600
|
|
Passcode: CMEDCALL
|
|
|
A live webcast of the conference call will be available on
http://ir.chinameditech.com.
A replay of this webcast will be available for one month on this
website.
A telephone replay of the call will be available after the
conclusion of the conference call through 10:00 a.m. U.S. Eastern Time on February 19, 2011.
The dial-in details for the replay are as follows:
- U.S. Toll Free
Number 1-888-286-8010
|
|
- International Dial-in
Number 1-617-801-6888
|
|
Passcode: 46276526
|
|
|
About China Medical Technologies, Inc.
China Medical Technologies, Inc. is a leading China-based advanced IVD company using
molecular diagnostic technologies including Fluorescent in situ
Hybridization (FISH) and Surface Plasmon Resonance (SPR) and an
immunodiagnostic technology, Enhanced Chemiluminescence Immunoassay
(ECLIA), to develop, manufacture and distribute diagnostic products
used for the detection of various cancers, diseases and disorders
as well as companion diagnostic tests for targeted cancer drugs.
The Company generates all of its revenues in China through the sale of diagnostic
consumables including FISH probes, SPR-based DNA chips and ECLIA
reagent kits to hospitals which are recurring users of the
consumables for their patients. The Company sells FISH probes and
SPR chips to large hospitals through its direct sales personnel and
ECLIA reagent kits to small and mid-size hospitals through
distributors. For more information, please visit
http://www.chinameditech.com.
Safe Harbor Statement
This press release contains forward-looking statements. These
statements constitute "forward-looking" statements within the
meaning of Section 21E of the Securities Exchange Act of 1934, as
amended, and as defined in the U.S. Private Securities Litigation
Reform Act of 1995. These forward-looking statements can be
identified by terminology such as "expects," "anticipates,"
"future," "intends," "plans," "believes," "estimates" and similar
statements. Among other things, the quotations from management in
this press release, as well as its outlook for 4Q FY2010 and full
year FY2010, contain forward-looking statements. Such statements
involve certain risks and uncertainties that could cause actual
results to differ materially from those in the forward-looking
statements. Further information regarding these and other risks is
included in the Company's filings with the U.S. Securities and
Exchange Commission, including its annual report on Form 20-F. The
Company does not undertake any obligation to update any
forward-looking statement as a result of new information, future
events or otherwise, except as required under applicable law.
Contacts
|
|
|
|
Sam Tsang and Winnie
Yam
|
|
Tel:
852-2511-9808
|
|
Email: IR@chinameditech.com
|
|
|
China Medical Technologies,
Inc.
|
|
Unaudited Condensed Consolidated
Balance Sheets
|
|
|
|
|
As
of
|
|
|
September
30, 2010
|
December
31, 2010
|
|
|
RMB
|
RMB
|
US$
|
|
|
(in
thousands)
|
|
Assets
|
|
|
|
|
Current
assets
|
|
|
|
|
Cash and cash
equivalents
|
805,901
|
1,119,384
|
169,604
|
|
Trade accounts receivable,
net
|
333,123
|
397,739
|
60,264
|
|
Inventories
|
21,351
|
16,640
|
2,521
|
|
Prepayments and other
receivables
|
19,093
|
9,503
|
1,439
|
|
Convertible notes issuance
costs
|
-
|
1,018
|
154
|
|
Due from a related
party
|
200,715
|
118,800
|
18,000
|
|
Total
current assets
|
1,380,183
|
1,663,084
|
251,982
|
|
|
|
|
|
|
Property, plant and
equipment, net
|
147,355
|
144,251
|
21,857
|
|
Land use rights
|
6,954
|
6,906
|
1,046
|
|
Goodwill
|
8,654
|
8,654
|
1,311
|
|
Intangible assets,
net
|
3,128,820
|
3,042,474
|
460,981
|
|
Convertible notes issuance
costs
|
34,782
|
60,163
|
9,116
|
|
Share lending
costs
|
27,905
|
25,133
|
3,808
|
|
Total
assets
|
4,734,653
|
4,950,665
|
750,101
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
Current
liabilities
|
|
|
|
|
Trade accounts
payable
|
43,958
|
44,477
|
6,739
|
|
Accrued liabilities and
other payables
|
173,693
|
174,978
|
26,512
|
|
Convertible
notes
|
-
|
186,763
|
28,297
|
|
Income taxes
payable
|
59,334
|
63,859
|
9,676
|
|
Total current
liabilities
|
276,985
|
470,077
|
71,224
|
|
|
|
|
|
|
Convertible
notes
|
2,528,848
|
2,626,800
|
398,000
|
|
Deferred income
taxes
|
78,408
|
84,936
|
12,869
|
|
Total
liabilities
|
2,884,241
|
3,181,813
|
482,093
|
|
|
|
|
|
|
Shareholders'
equity
|
|
|
|
|
Ordinary shares US$0.1 par
value:
|
|
|
|
|
500,000,000 authorized;
322,680,001 issued and
|
|
|
|
|
outstanding as of
September 30, 2010 and December
|
|
|
|
|
31,
2010
|
258,840
|
258,840
|
39,218
|
|
Additional paid-in
capital
|
830,016
|
869,439
|
131,733
|
|
Treasury stock
|
(47,108)
|
(201,362)
|
(30,509)
|
|
Accumulated other
comprehensive loss
|
(74,412)
|
(76,923)
|
(11,655)
|
|
Retained
earnings
|
883,076
|
918,858
|
139,221
|
|
Total
shareholders' equity
|
1,850,412
|
1,768,852
|
268,008
|
|
Total liabilities
and shareholders' equity
|
4,734,653
|
4,950,665
|
750,101
|
|
|
|
|
|
China Medical Technologies,
Inc.
|
|
Unaudited Condensed Consolidated
Statements of Income and
|
|
Reconciliations of GAAP Measures
to Non-GAAP Measures
|
|
 
|
|
 
|
For the
Three Months Ended
|
For the
Three Months Ended
|
|
 
|
December 31,
2009
|
December 31,
2010
|
|
 
|
GAAP
|
Adjustments
|
Non-GAAP
|
GAAP
|
Adjustments
|
Non-GAAP
|
|
 
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|
 
|
As adjusted
(9)
|
 
|
 
|
 
|
 
|
 
|
 
|
|
 
|
(in
thousands except for per ADS information)
|
|
 
|
|
|
|
|
|
|
|
|
Revenues, net
(1)
|
172,320
|
-
|
172,320
|
223,948
|
-
|
223,948
|
33,932
|
|
Cost of revenues
(2)
|
(62,996)
|
22,412
|
(40,584)
|
(93,903)
|
48,786
|
(45,117)
|
(6,836)
|
|
Gross profit
|
109,324
|
22,412
|
131,736
|
130,045
|
48,786
|
178,831
|
27,096
|
|
Operating expenses
|
 
|
 
|
 
|
 
|
 
|
 
|
 
|
|
Research
and
|
|
|
|
|
|
|
|
|
development
(3)
|
(10,738)
|
1,592
|
(9,146)
|
(12,348)
|
1,175
|
(11,173)
|
(1,693)
|
|
Sales and
marketing (3)
|
(19,058)
|
-
|
(19,058)
|
(24,426)
|
185
|
(24,241)
|
(3,673)
|
|
General
and
|
|
|
|
|
|
|
|
|
administrative (3)
|
(25,844)
|
8,642
|
(17,202)
|
(20,989)
|
7,339
|
(13,650)
|
(2,068)
|
|
Amortization
of
|
|
|
|
|
|
|
|
|
SPR
intangible
|
|
|
|
|
|
|
|
|
assets
(4)
|
(27,343)
|
27,343
|
-
|
-
|
-
|
-
|
-
|
|
Total operating
expenses
|
(82,983)
|
37,577
|
(45,406)
|
(57,763)
|
8,699
|
(49,064)
|
(7,434)
|
|
Operating
income
|
26,341
|
59,989
|
86,330
|
72,282
|
57,485
|
129,767
|
19,662
|
|
Interest
income
|
4,332
|
-
|
4,332
|
5,387
|
-
|
5,387
|
816
|
|
Interest
expense –
|
|
|
|
|
|
|
|
|
convertible notes (5)
|
(35,421)
|
7,618
|
(27,803)
|
(32,782)
|
6,104
|
(26,678)
|
(4,042)
|
|
Interest expense
–
|
 
|
 
|
 
|
 
|
 
|
 
|
 
|
|
amortization
of
|
 
|
 
|
 
|
 
|
 
|
 
|
 
|
|
convertible
notes
|
|
|
|
|
|
|
|
|
issuance
costs
|
(4,378)
|
-
|
(4,378)
|
(3,941)
|
-
|
(3,941)
|
(597)
|
|
Interest
expense –
|
|
|
|
|
|
|
|
|
amortization of
|
|
|
|
|
|
|
|
|
share
lending costs (6)
|
(2,756)
|
2,756
|
-
|
(2,414)
|
2,414
|
-
|
-
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
, net
(7)
|
225
|
-
|
225
|
22,449
|
(26,143)
|
(3,694)
|
(560)
|
|
Income (loss)
before
|
|
|
|
|
|
|
|
|
income
tax
|
(11,657)
|
70,363
|
58,706
|
60,981
|
39,860
|
100,841
|
15,279
|
|
Income tax
expense
|
(13,088)
|
-
|
(13,088)
|
(25,199)
|
-
|
(25,199)
|
(3,818)
|
|
Net income
(loss)
|
(24,745)
|
70,363
|
45,618
|
35,782
|
39,860
|
75,642
|
11,461
|
|
Earnings (loss) per
ADS
|
 
|
 
|
 
|
 
|
 
|
 
|
 
|
|
- basic
(8)
|
(0.94)
|
2.68
|
1.74
|
1.37
|
1.52
|
2.89
|
0.44
|
|
- diluted
(8)
|
(0.94)
|
2.68
|
1.74
|
1.36
|
1.51
|
2.87
|
0.43
|
|
Weighted
average
|
 
|
 
|
 
|
 
|
 
|
 
|
 
|
|
number of
ADS
|
|
|
|
|
|
|
|
|
- basic
(8)
|
26,262,471
|
-
|
26,262,471
|
26,151,808
|
-
|
26,151,808
|
26,151,808
|
|
- diluted
(8)
|
26,262,471
|
-
|
26,262,471
|
26,377,378
|
-
|
26,377,378
|
26,377,378
|
|
|
|
|
|
|
|
|
|
Notes:
 
|
For the
Three Months Ended
|
|
|
December 31,
2009
|
December 31,
2010
|
|
(1) Revenues,
net
|
RMB'000
|
RMB'000
|
US$'000
|
|
- Molecular diagnostic
systems
|
96,166
|
135,088
|
20,468
|
|
- Immunodiagnostic
systems
|
76,154
|
88,860
|
13,464
|
|
|
172,320
|
223,948
|
33,932
|
|
Molecular diagnostic
systems
|
|
|
|
|
- HPV-DNA chips
|
-
|
9,186
|
1,392
|
|
(2) Non-GAAP numbers exclude
stock compensation expense and amortization of acquired intangible
assets.
|
|
|
For the
Three Months Ended
|
|
|
December 31,
2009
|
December 31,
2010
|
|
|
RMB'000
|
RMB'000
|
US$'000
|
|
|
|
|
|
|
Stock compensation
expense
|
-
|
106
|
16
|
|
Amortization of acquired
intangible assets
|
22,412
|
48,680
|
7,376
|
|
|
22,412
|
48,786
|
7,392
|
|
|
|
(3) Non-GAAP numbers
exclude stock compensation expense.
(4) Non-GAAP numbers
exclude amortization of acquired intangible assets.
(5) Non-GAAP numbers
exclude non-cash interest expense of convertible notes.
(6) Non-GAAP numbers
exclude non-cash interest expense for amortization of share lending
costs.
(7) Non-GAAP numbers
exclude gain on repurchase of convertible notes as well as high
yield note offering expenses.
|
|
|
|
|
|
|
 
|
For the
Three Months Ended
|
|
|
December 31,
2009
|
December 31,
2010
|
|
|
RMB'000
|
RMB'000
|
US$'000
|
|
|
|
|
|
|
Gain on repurchase of
convertible notes
|
-
|
(31,379)
|
(4,754)
|
|
High yield note offering
expenses
|
-
|
5,236
|
793
|
|
|
-
|
(26,143)
|
(3,961)
|
|
|
|
|
|
|
(8) Interest expense and
amortization in connection with convertible notes were not added
back in computing GAAP diluted earnings per ADS because they were
anti-dilutive. Non-GAAP earnings per ADS represents non-GAAP net
income divided by the weighted average number of ADSs used in
computing basic and diluted earnings per ADS in accordance with
GAAP.
(9) As a result of the
adoption of new authoritative guidance governing the accounting for
own-share lending arrangements in contemplation of convertible debt
issuance or other financing effective on April 1, 2010, the
Company adjusted relevant numbers in the unaudited condensed
consolidated statements of income for the three months ended
December 31, 2009 retrospectively in accordance with
GAAP.
|
|
|
|
|
|
China Medical Technologies,
Inc.
|
|
Unaudited Condensed Consolidated
Statements of Income and
|
|
Reconciliations of GAAP Measures
to Non-GAAP Measures
|
|
 
|
|
 
|
For the Nine
Months Ended
|
For the Nine
Months Ended
|
|
 
|
December 31,
2009
|
December 31,
2010
|
|
 
|
GAAP
|
Adjustments
|
Non-GAAP
|
GAAP
|
Adjustments
|
Non-GAAP
|
|
 
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
RMB
|
US$
|
|
 
|
As adjusted
(9)
|
 
|
 
|
 
|
 
|
 
|
 
|
|
 
|
(in
thousands except for per ADS information)
|
|
 
|
|
|
|
|
|
|
|
|
Revenues, net (1)
|
547,343
|
-
|
547,343
|
611,952
|
-
|
611,952
|
92,720
|
|
Cost of revenues (2)
|
(175,926)
|
67,297
|
(108,629)
|
(245,734)
|
120,791
|
(124,943)
|
(18,931)
|
|
Gross profit
|
371,417
|
67,297
|
438,714
|
366,218
|
120,791
|
487,009
|
73,789
|
|
Operating expenses
|
 
|
 
|
 
|
 
|
 
|
 
|
 
|
|
Research
and
|
|
|
|
|
|
|
|
|
development
(3)
|
(31,941)
|
4,895
|
(27,046)
|
(33,857)
|
3,738
|
(30,119)
|
(4,563)
|
|
Sales and marketing
(3)
|
(47,360)
|
-
|
(47,360)
|
(64,165)
|
480
|
(63,685)
|
(9,649)
|
|
General
and
|
|
|
|
|
|
|
|
|
administrative
(3)
|
(117,928)
|
24,850
|
(93,078)
|
(71,186)
|
24,142
|
(47,044)
|
(7,128)
|
|
Amortization
of
|
|
|
|
|
|
|
|
|
SPR
intangible
|
 
|
 
|
 
|
 
|
 
|
 
|
 
|
|
assets
(4)
|
(82,052)
|
82,052
|
-
|
(27,329)
|
27,329
|
-
|
-
|
|
Total operating
expenses
|
(279,281)
|
111,797
|
(167,484)
|
(196,537)
|
55,689
|
(140,848)
|
(21,340)
|
|
Operating income
|
92,136
|
179,094
|
271,230
|
169,681
|
176,480
|
346,161
|
52,449
|
|
Interest
income
|
9,301
|
-
|
9,301
|
15,103
|
-
|
15,103
|
2,288
|
|
Interest expense
–
|
|
|
|
|
|
|
|
|
convertible notes
(5)
|
(106,292)
|
22,859
|
(83,433)
|
(97,306)
|
21,241
|
(76,065)
|
(11,525)
|
|
Interest expense
–
|
|
|
|
|
|
|
|
|
amortization
of
|
 
|
 
|
 
|
 
|
 
|
 
|
 
|
|
convertible
notes
|
 
|
 
|
 
|
 
|
 
|
 
|
 
|
|
issuance
costs
|
(13,139)
|
-
|
(13,139)
|
(11,859)
|
-
|
(11,859)
|
(1,797)
|
|
Interest expense
–
|
|
|
|
|
|
|
|
|
amortization
of
|
 
|
 
|
 
|
 
|
 
|
 
|
 
|
|
share lending
costs (6)
|
(8,268)
|
8,268
|
-
|
(7,345)
|
7,345
|
-
|
-
|
|
Other income
(expense)
|
|
|
|
|
|
|
|
|
, net
(7)
|
210
|
-
|
210
|
63,942
|
(73,536)
|
(9,594)
|
(1,454)
|
|
Income (loss) before
|
|
|
|
|
|
|
|
|
income tax
|
(26,052)
|
210,221
|
184,169
|
132,216
|
131,530
|
263,746
|
39,961
|
|
Income tax expense
|
(48,350)
|
-
|
(48,350)
|
(65,692)
|
-
|
(65,692)
|
(9,953)
|
|
Net income (loss)
|
(74,402)
|
210,221
|
135,819
|
66,524
|
131,530
|
198,054
|
30,008
|
|
Earnings (loss) per
ADS
|
 
|
 
|
 
|
 
|
 
|
 
|
 
|
|
- basic
(8)
|
(2.82)
|
7.97
|
5.15
|
2.55
|
5.04
|
7.59
|
1.15
|
|
- diluted
(8)
|
(2.82)
|
7.97
|
5.15
|
2.54
|
5.01
|
7.55
|
1.14
|
|
Weighted average
|
 
|
 
|
 
|
 
|
 
|
 
|
 
|
|
number of ADS
|
 
|
 
|
 
|
 
|
 
|
 
|
 
|
|
- basic
(8)
|
26,353,485
|
-
|
26,353,485
|
26,092,009
|
-
|
26,092,009
|
26,092,009
|
|
- diluted
(8)
|
26,353,485
|
-
|
26,353,485
|
26,229,552
|
-
|
26,229,552
|
26,229,552
|
|
|
|
|
|
|
|
|
|
Notes:
 
|
|
|
For the Nine
Months Ended
|
|
|
December 31,
2009
|
December 31,
2010
|
|
(1) Revenues,
net
|
RMB'000
|
RMB'000
|
US$'000
|
|
- Molecular diagnostic
systems
|
283,865
|
361,527
|
54,777
|
|
- Immunodiagnostic
systems
|
263,478
|
250,425
|
37,943
|
|
|
547,343
|
611,952
|
92,720
|
|
Molecular diagnostic
systems
|
|
|
|
|
- HPV-DNA chips
|
-
|
13,006
|
1,971
|
|
|
|
(2) Non-GAAP numbers
exclude stock compensation expense and amortization of acquired
intangible assets.
|
|
|
For the Nine
Months Ended
|
|
|
December 31,
2009
|
December 31,
2010
|
|
|
RMB'000
|
RMB'000
|
US$'000
|
|
|
|
|
|
|
Stock compensation
expense
|
-
|
275
|
42
|
|
Amortization of acquired
intangible assets
|
67,297
|
120,516
|
18,260
|
|
|
67,297
|
120,791
|
18,302
|
|
(3) Non-GAAP numbers
exclude stock compensation expense.
(4) Non-GAAP numbers
exclude amortization of acquired intangible assets.
(5) Non-GAAP numbers
exclude non-cash interest expense of convertible notes.
(6) Non-GAAP numbers
exclude non-cash interest expense for amortization of share lending
costs.
(7) Non-GAAP numbers exclude
gain on repurchase of convertible notes as well as high yield note
offering expenses.
|
|
|
|
|
|
|
 
|
For the Nine
Months Ended
|
|
|
December 31,
2009
|
December 31,
2010
|
|
|
RMB'000
|
RMB'000
|
US$'000
|
|
|
|
|
|
|
Gain on repurchase of
convertible notes
|
-
|
(78,772)
|
(11,935)
|
|
High yield note offering
expenses
|
-
|
5,236
|
793
|
|
|
-
|
(73,536)
|
(11,142)
|
|
|
|
|
|
|
(8) Interest expense and
amortization in connection with convertible notes were not added
back in computing GAAP diluted earnings per ADS because they were
anti-dilutive. Non-GAAP earnings per ADS represents non-GAAP net
income divided by the weighted average number of ADSs used in
computing basic and diluted earnings per ADS in accordance with
GAAP.
(9) As a result of the
adoption of new authoritative guidance governing the accounting for
own-share lending arrangements in contemplation of convertible debt
issuance or other financing effective on April 1, 2010, the
Company adjusted relevant numbers in the unaudited condensed
consolidated statements of income for the nine months ended
December 31, 2009 retrospectively in accordance with
GAAP.
|
|
|
|
|
|
China Medical Technologies,
Inc.
Unaudited Condensed
Consolidated
Statements of Cash Flows
|
|
|
For the
Three Months Ended
|
|
|
December 31,
2009
|
December 31,
2010
|
|
|
RMB
|
RMB
|
US$
|
|
|
(in
thousands)
|
|
Net cash provided by
operating activities
|
80,362
|
49,687
|
7,528
|
|
|
|
|
|
|
Net cash provided by (used
in) investing activities
|
(354,927)
|
77,913
|
11,805
|
|
|
|
|
|
|
Net cash provided
by (used in) financing
activities
|
(132,476)
|
190,458
|
28,858
|
|
|
|
|
|
|
Effect of foreign currency
exchange rate change on cash
|
232
|
(4,575)
|
(693)
|
|
Net increase
(decrease) in cash and cash
equivalents
|
(406,809)
|
313,483
|
47,498
|
|
Cash and cash
equivalents:
|
|
|
|
|
At beginning
of period
|
1,236,696
|
805,901
|
122,106
|
|
At end of
period
|
829,887
|
1,119,384
|
169,604
|
|
|
|
|
|
|
For the Nine
Months Ended
|
|
|
December 31,
2009
|
December 31,
2010
|
|
|
RMB
|
RMB
|
US$
|
|
|
(in
thousands)
|
|
Net cash provided by
operating activities
|
220,119
|
186,837
|
28,309
|
|
|
|
|
|
|
Net cash provided by (used
in) investing activities
|
(714,913)
|
75,380
|
11,421
|
|
|
|
|
|
|
Net cash provided by (used
in) financing activities
|
(131,465)
|
45,921
|
6,958
|
|
|
|
|
|
|
Effect of foreign currency
exchange rate change on cash
|
(264)
|
(4,207)
|
(637)
|
|
Net increase (decrease)
in cash and cash equivalents
|
(626,523)
|
303,931
|
46,051
|
|
Cash and cash
equivalents:
|
|
|
|
|
At beginning of
period
|
1,456,410
|
815,453
|
123,553
|
|
At end of
period
|
829,887
|
1,119,384
|
169,604
|
|
|
|
|
|
|
|
China Medical Technologies,
Inc.
EBITDA and Adjusted EBITDA
Measures
|
|
|
For the Three Months
Ended
|
|
|
December 31,
2009
|
December 31,
2010
|
|
|
RMB
|
RMB
|
US$
|
|
|
As adjusted
(1)
|
|
|
|
|
(in
thousands)
|
|
Net income (loss)
|
(24,745)
|
35,782
|
5,421
|
|
Adjustments:
|
|
|
|
|
Interest income
|
(4,332)
|
(5,387)
|
(816)
|
|
Interest expense –
convertible notes
|
35,421
|
32,782
|
4,967
|
|
Interest expense –
amortization of convertible notes issuance costs
|
4,378
|
3,941
|
597
|
|
Interest expense –
amortization of share lending costs
|
2,756
|
2,414
|
366
|
|
Income tax
expense
|
13,088
|
25,199
|
3,818
|
|
Depreciation
|
5,578
|
5,471
|
829
|
|
Amortization
|
49,755
|
48,680
|
7,376
|
|
EBITDA (2)
|
81,899
|
148,882
|
22,558
|
|
|
|
|
|
|
EBITDA (2)
|
81,899
|
148,882
|
22,558
|
|
Adjustments:
|
|
|
|
|
Stock compensation
expense
|
10,234
|
8,805
|
1,334
|
|
Gain on
repurchase of
convertible notes
|
-
|
(31,379)
|
(4,754)
|
|
High
yield note offering
expenses
|
-
|
5,236
|
793
|
|
Adjusted EBITDA (3)
|
92,133
|
131,544
|
19,931
|
|
|
|
|
For the Nine Months
Ended
|
|
|
December 31,
2009
|
December 31,
2010
|
|
|
RMB
|
RMB
|
US$
|
|
|
As adjusted
(1)
|
|
|
|
|
(in
thousands)
|
|
Net income (loss)
|
(74,402)
|
66,524
|
10,079
|
|
Adjustments:
|
|
|
|
|
Interest income
|
(9,301)
|
(15,103)
|
(2,288)
|
|
Interest expense –
convertible notes
|
106,292
|
97,306
|
14,743
|
|
Interest expense –
amortization of convertible notes issuance costs
|
13,139
|
11,859
|
1,797
|
|
Interest expense –
amortization of share lending costs
|
8,268
|
7,345
|
1,113
|
|
Income tax
expense
|
48,350
|
65,692
|
9,953
|
|
Depreciation
|
16,549
|
16,443
|
2,491
|
|
Amortization
|
149,349
|
147,845
|
22,401
|
|
EBITDA (2)
|
258,244
|
397,911
|
60,289
|
|
|
|
|
|
|
EBITDA (2)
|
258,244
|
397,911
|
60,289
|
|
Adjustments:
|
|
|
|
|
Stock compensation
expense
|
29,745
|
28,635
|
4,339
|
|
Gain on repurchase of
convertible notes
|
-
|
(78,772)
|
(11,935)
|
|
High yield note offering
expenses
|
-
|
5,236
|
793
|
|
|
|
|
|
|
Adjusted EBITDA (3)
|
287,989
|
353,010
|
53,486
|
|
(1) As a result of the
adoption of new authoritative guidance governing the accounting for
own-share lending arrangements in contemplation of convertible debt
issuance or other financing effective on April 1, 2010, the Company
adjusted relevant numbers in the unaudited condensed consolidated
statements of income for the three months and nine months ended
December 31, 2009 retrospectively in accordance with
GAAP.
(2) EBITDA represents net
income reported in accordance with GAAP, adjusted for the effects
of interest income, interest expenses, income tax expense,
depreciation and amortization.
(3) Adjusted EBITDA
represents EBITDA adjusted for the effects of stock compensation
expense, gain on repurchase of convertible notes as well as high
yield note offering expenses.
|
|
|
|
|
|
SOURCE China Medical Technologies, Inc.