Dehaier Medical Announces 2013 First Half Year Financial Results
27 August 2013 - 7:30AM
Dehaier Medical Systems Ltd. (Nasdaq:DHRM)
("Dehaier" or the "Company"), an emerging leader in the
development, assembly, marketing and sale of medical devices and
homecare medical products, today announced its financial results
for the half year ended June 30, 2013.
Mr. Ping Chen, Chief Executive Officer of Dehaier Medical,
stated, "We are pleased to have expanded into China's burgeoning
sleep respiratory market by entering into a strategic agreement
with an Israeli medical signal processing company. As WideMed's
exclusive partner in China, we have marketed and distributed our
newly-developed sleep holter to hospitals across the whole country
as an accurate and user-friendly sleep apnea diagnosis solution.
These products are in registration with China's SFDA and we expect
to obtain SFDA approval soon. Because we believe this kind of
device and business model addresses the needs of patients and the
market, we expect the firm foundation we laid in the first half of
the year will generate considerable revenue during the remainder of
the year."
Mr. Ping Chen continued, "At the same time, we have continued to
focus on our government medical procurement and key account
business initiatives. We successfully bid to provide Color Doppler
Ultrasound machines to county hospitals and clinics in Guizhou
province and have also established a positive relationship with
multinational companies like Mindray to broaden our key account
business. We will continue to balance our development between our
traditional business and new business initiatives and expect to
drive a more diverse and robust revenue stream to the Company."
Operating Highlights for 6 months 2013
- In January 2013, the Company won a bid to implement a
government procurement project to provide Color Doppler Ultrasound
machines to county hospitals and clinics in Guizhou, China.
- In February 2013, the Company assisted Mindray Medical with a
national medical procurement bid for 79 units of Mindray's M7 color
Doppler ultrasound machines.
- In April 2013, the Company became the exclusive after-sales
service agent of Heyer Medical AG ("Heyer") for its anesthesia
machine and ultrasound nebulizer products.
- In May 2013, the Company entered into a strategic cooperation
agreement with WideMed Ltd. (TASE:WDMD), a leading Israeli company
engaged in the research, development and sale of innovative
products for the growing bio-medical signal diagnostics and
treatment market, to become WideMed's exclusive partner in China to
market the Morpheus Ox System, a cost-effective, portable home
sleep diagnostic and monitoring solution which enables to diagnose
sleep disorders using a standard oximeter recording plethysmograph
signal.
Half Year 2013 Financial Overview
- Our total revenues decreased by 19.16% from $10.30 million for
the six months ended June 30, 2012 to $8.33 million for the six
months ended June 30, 2013. In the first half of 2013, we
continuously developed our sales channels for traditional medical
devices sales. At the same time, we also began to adjust our
operating strategy to expand into government procurement projects
and the burgeoning sleep respiratory and oxygen therapy market.
Because the company reduced the marketing expenses in its
traditional medical device business and invested additional
resources to develop its sleep respiratory business, our revenues
and net income are lower than during the same period in 2012.
- Our gross profit decreased from $3.98 million in the six months
ended June 30, 2012 to $3.27 million in the same period of 2013,
while our gross margin increased slightly from 38.66% in 2012 to
39.23% in 2013 due to the faster decrease in cost than revenues.
Management believes the Company's gross margin is likely to remain
relatively stable over the near term.
- As a result of the foregoing, we generated operating income of
approximately $1.91 million in the six months ended June 30, 2013,
compared to approximately $2.38 million in the same period of 2012.
Operating income decreased by 19.67%, mainly because of the reduced
revenues.
- Our net income was approximately $1.52 million in the six
months ended June 30, 2013, compared to approximately $1.81 million
in 2012, a decrease by 16.13%, mainly because of the decrease of
revenues. After deduction of non-controlling interest in income,
net income attributable to Dehaier was approximately $1.53 million
and $1.82 million in the six months ended June 30, 2013 and 2012,
respectively.
- As of June 30, 2013, we had $1,343,246 cash and cash
equivalents. As a result of the total cash activities, net cash
decreased from $3,505,330 at December 31, 2012, mainly because we
invested in purchasing manufacturing equipment and devices for our
future development of sleep respiratory business.
- We believe that our currently available working capital of
$30,035,112, including cash, should be adequate to meet our
anticipated cash needs and sustain our current operations for at
least 12 months.
About Dehaier Medical Systems
Ltd.
Dehaier is an emerging leader in the development, assembly,
marketing and sale of medical products, including respiratory and
oxygen homecare medical products. The company develops and
assembles its own branded medical devices and homecare medical
products from third-party components. The company also distributes
products designed and manufactured by other companies, including
medical devices from IMD (Italy), Welch Allyn (USA), HEYER
(Germany), Timesco (UK), eVent Medical (US) and JMS (Japan).
Dehaier's technology is based on six patents, nine software
copyrights and proprietary technology. More information may be
found at http://www.dehaier.com.cn
Forward-looking Statements
This news release contains forward-looking statements as defined
by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events, government approvals
or performance, and underlying assumptions and other statements
that are other than statements of historical facts. These
statements are subject to uncertainties and risks including, but
not limited to, product and service demand and acceptance, changes
in technology, economic conditions, the impact of competition and
pricing, government regulation, future developments in payment for
and demand for medical equipment and services and other risks
contained in reports filed by the company with the Securities and
Exchange Commission. All such forward-looking statements, whether
written or oral, and whether made by or on behalf of the company,
are expressly qualified by the cautionary statements and any other
cautionary statements which may accompany the forward-looking
statements. In addition, the company disclaims any obligation to
update any forward-looking statements to reflect events or
circumstances after the date hereof.
DEHAIER MEDICAL SYSTEMS
LIMITED AND AFFILIATE |
|
CONDENSED CONSOLIDATED
INTERIM BALANCE SHEETS |
(UNAUDITED) |
|
June 30, |
December 31, |
|
2013 |
2012 |
|
US$ |
US$ |
|
|
|
ASSETS |
|
|
CURRENT ASSETS: |
|
|
Cash and cash equivalents |
1,343,246 |
3,505,330 |
Accounts receivable |
|
|
-less allowance for doubtful
accounts of $906,506 and $865,769 |
12,935,416 |
11,960,193 |
Contract Deposits |
2,834,619 |
3,027,616 |
Other receivables -less
allowance for doubtful accounts of $598,747 and $598,747
|
587,645 |
556,635 |
Advances to Suppliers |
6,759,857 |
4,470,756 |
Prepayment and other current assets |
5,198,100 |
4,069,975 |
Inventories, net |
4,745,328 |
4,654,827 |
Tax receivable |
337,113 |
328,208 |
Deferred tax asset |
121,269 |
119,437 |
Total Current Assets |
34,862,593 |
32,692,977 |
|
|
|
Property and equipment, net |
3,833,499 |
2,895,523 |
Intangible assets, net |
2,663,691 |
2,694,439 |
Total Assets |
41,359,783 |
38,282,939 |
|
|
|
LIABILITIES AND EQUITY |
|
|
CURRENT LIABILITIES: |
|
|
Short-term borrowings |
2,444,115 |
2,407,200 |
Accounts payable |
39,066 |
37,640 |
Advances from customers |
348,764 |
248,940 |
Accrued expenses and other current
liabilities |
700,801 |
406,452 |
Taxes payable |
950,871 |
401,574 |
Warranty obligation |
343,864 |
338,671 |
Total Current
Liabilities |
4,827,481 |
3,840,477 |
|
|
|
OTHER LIABILITIES |
|
|
Warrants liability |
378,579 |
374,166 |
Total Liabilities |
5,206,060 |
4,214,643 |
Commitments
and Contingency |
|
|
Equity |
|
|
Common shares, $0.002731 par value,
18,307,038 shares authorized, 4,620,000 shares issued and
outstanding |
12,618 |
12,618 |
Additional paid in capital |
13,544,584 |
13,500,847 |
Retained earnings |
17,682,139 |
16,147,723 |
Accumulated other comprehensive income |
3,458,347 |
2,967,202 |
Total Dehaier Medical Systems Limited
shareholders' equity |
34,697,688 |
32,628,390 |
Non-controlling interest |
1,456,035 |
1,439,906 |
Total equity |
36,153,723 |
34,068,296 |
Total liabilities and
equity |
41,359,783 |
38,282,939 |
|
DEHAIER MEDICAL SYSTEMS
LIMITED AND AFFILIATE |
|
CONDENSED CONSOLIDATED
INTERIM STATEMENTS OF INCOME AND COMPREHENSIVE INCOME |
(UNAUDITED) |
|
Six Months
Ended |
|
June 30, |
June 30, |
|
2013 |
2012 |
|
US$ |
US$ |
|
|
|
Revenue |
8,325,382 |
10,299,059 |
|
|
|
Costs of revenue |
(5,059,745) |
(6,317,316) |
|
|
|
Gross profit |
3,265,637 |
3,981,743 |
|
|
|
Service income |
99,357 |
132,915 |
Service expenses |
(18,195) |
(37,272) |
General and administrative expense |
(868,262) |
(1,031,502) |
Selling expense |
(564,315) |
(662,852) |
|
|
|
Operating Income
(Expense) |
1,914,222 |
2,383,032 |
|
|
|
Financial expenses |
(77,863) |
(65,969) |
Other income |
-- |
395 |
Change in fair value of warrants
liability |
(4,413) |
(92,067) |
|
|
|
Income (Expense) before provision for
income tax and non-controlling interest |
1,831,946 |
2,225,391 |
|
|
|
Provision for income tax |
(314,883) |
(416,468) |
|
|
|
Net income |
1,517,063 |
1,808,923 |
|
|
|
Net loss (income) attributable to
Non-Controlling interest |
17,353 |
7,478 |
|
|
|
Net income attributable to Dehaier
Medical Systems Limited |
1,534,416 |
1,816,401 |
|
|
|
Net income |
1,517,063 |
1,808,923 |
|
|
|
Other comprehensive income
(loss) |
|
|
Foreign currency translation adjustments |
491,145 |
(226,067) |
|
|
|
Comprehensive income |
2,008,208 |
1,582,856 |
Comprehensive income (loss) attributable to
the non-controlling interest |
(16,129) |
21,019 |
|
|
|
Comprehensive income attributable to
Dehaier Medical Systems Limited |
1,992,079 |
1,603,875 |
|
|
|
Earnings per share |
|
|
-Basic |
0.33 |
0.40 |
-Diluted |
0.33 |
0.39 |
|
|
|
Weighted average number of common
shares used in computation |
|
|
-Basic |
4,620,000 |
4,566,160 |
-Diluted |
4,642,383 |
4,714,077 |
|
DEHAIER MEDICAL SYSTEMS
LIMITED AND AFFILIATE |
|
CONDENSED CONSOLIDATED
STATEMENTS OF CASH FLOWS |
(UNAUDITED) |
|
For the six
months ended June 30, |
|
2013 |
2012 |
|
US$ |
US$ |
Cash flows from operating
activities |
|
|
|
|
|
Net income |
1,517,063 |
1,808,923 |
Adjustments to reconcile net income to net
cash (used in) operating activities |
|
|
Stock-based compensation
expense |
43,737 |
124,077 |
Depreciation and
amortization |
300,840 |
246,448 |
Change in fair value of
warrants liability |
4,413 |
92,067 |
Provision for doubtful
accounts |
27,224 |
27,942 |
Changes in assets and liabilities: |
|
|
(Increase) in accounts
receivable |
(812,221) |
(282,688) |
(Increase) in prepayments and
other current assets |
(3,268,571) |
(522,831) |
Decrease (Increase) in other
receivables |
215,084 |
(1,670,623) |
Decrease (Increase) in
inventories |
(18,953) |
733,009 |
Decrease (Increase) in tax
receivable |
(3,839) |
384,599 |
Increase in accounts
payable |
840 |
6,115 |
Decrease (Increase) in advances
from customers |
95,181 |
(65,347) |
Decrease (Increase) in accrued
expenses and other current liabilities |
285,657 |
(31,931) |
Decrease (Increase) in taxes
payable |
538,466 |
(1,616,959) |
Net cash (used in) operating
activities |
(1,075,079) |
(767,199) |
|
|
|
Cash flows from investing
activities |
|
|
Capital expenditures and other additions |
(1,115,276) |
(2,405,707) |
Net cash used in investing
activities |
(1,115,276) |
(2,405,707) |
|
|
|
Cash flows from financing
activities |
|
|
Proceeds from bank loan |
2,413,250 |
2,373,145 |
Repayment of bank loan |
(2,410,176) |
(1,580,436) |
Net cash provided by financing
activities |
3,074 |
792,709 |
|
|
|
Effect of exchange rate fluctuations on cash
and cash equivalents |
25,197 |
(206,347) |
|
|
|
Net decrease in cash and cash
equivalents |
(2,162,084) |
(2,586,544) |
|
|
|
Cash and cash equivalents at beginning of
period |
3,505,330 |
3,694,486 |
|
|
|
Cash and cash equivalents at end of
period |
1,343,246 |
1,107,942 |
|
|
|
Supplemental cash flow
information |
|
|
Income tax paid |
231,371 |
779,678 |
Interest paid |
76,187 |
64,904 |
CONTACT: Dehaier Medical Systems Limited
Surie Liu
+86 10-5166-0080
lius@dehaier.com.cn
Dehaier Medical Systems Limited
Tina He
+86 10-5166-0080
hexw@dehaier.com.cn
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