China Health Labs & Diagnostics Ltd. announces $10.1 million sales order for its food safety business
November 28 2011 - 9:00AM
PR Newswire (Canada)
TSX-V: CHO OTCQX: CHLBF TORONTO, Nov. 28, 2011 /CNW/ -
China Health Labs & Diagnostics Ltd. ("China Health" or the
"Company") , is pleased to announce that it has secured a sales
order of RMB 61.5 million ($10.1 million) for food safety testing
equipment, lab management system ("LMS") software and hardware, and
installation services from the Beijing municipal government,
through a bidding agent, Oriental Scientific Instruments Import and
Export Corporation. The sales order is for delivery in 2011,
and includes a LMS software developed by the Company to connect all
the Beijing food safety labs, enabling more efficient
communications and operations. This sales order represents growth
of 100% for the food safety business compared to 2010, when the
Company had revenues of $33.7 million of which 15% or $5.5 million
was from the food safety business. "Improving food safety is a high
priority for the Chinese government at the central and municipal
levels. The Chinese government established the State Council Food
Safety Commission last year and this year, the SCFSC announced a
five-year program for food safety education," said Wilson Yao, CEO
of China Health. "We have used our expertise in lab
management and design to assist the Beijing municipal government to
establish an effective network of food testing labs that operate
with our proprietary lab management system. In the future, we
plan to use our track record in Beijing as a reference to expand
our food safety sales to other cities in China." In 2008, China
Health entered the food safety market by installing food-testing
labs mandated and paid for by the Beijing municipal government in
response to concerns due to the growing number of high profile food
safety incidents and the need to improve safety for the Beijing
Olympics. In 2009 and 2010, the Company developed and
provided food safety lab solutions, including the Company's
proprietary LMS software, for major food distribution centres in
Beijing and a mobile lab solution based on the need for on-site
rapid testing, which generated increasing revenues in each
year. Currently, the Company's food safety lab solutions test
for, among other things: (1) heavy metal residue, such as mercury,
cadmium and lead; (2) pesticide residue, such as alpha-BHC,
formothion, oryzalin, pyraflufen-ethyl, DDT and nitenpyram; (3)
veterinary drug residue, such as ampicillin, amoxicillin,
altrenogest and bacitracin; (4) pathogenic micro-organisms, such as
salmonella, shigella, vibrio parahaemolyticus and clostridium
botulinum; and (5) poisonous food additives, such as lean meat
powder, melamine, plasticizer and malachite green. The food safety
lab solutions include equipment assembled at the Company's Beijing
manufacturing facility and sourced from other manufacturers. To
date, China Health has installed 17 major labs, 250 mini-labs (in
food distribution and manufacturing facilities) and supplied 17
mobile labs to the Beijing municipal government to improve food
safety. About China Health Labs & Diagnostics Ltd. China
Health, operating in China as the Biochem Group, is a leading
diagnostic lab solution provider for the public healthcare industry
in China. The Company develops and sells Biochem Group branded and
third-party medical diagnostic products and services to diagnostic
facilities in China. Customers include large urban hospitals, rural
hospitals, Chinese military and rescue operations, the Beijing
government and third-party distributors. In 2010, China Health had
revenues of approximately $33.7 million, and intends to expand its
business by focusing its efforts on expanding its sales network in
three areas where it provides proprietary solutions, has limited
competition and which are supported by Chinese government policies
and budgets: BK Clinlab total lab solutions for rural hospitals and
clinics, food safety solutions for military and emergency rescue
services, and food safety solutions for large cities in China.
Neither TSX Venture Exchange nor its Regulation Services Provider
(as that term is defined in the policies of the TSX Venture
Exchange) accepts responsibility for the adequacy or accuracy of
this release. FORWARD LOOKING INFORMATION AND NON-GAAP MEASURES
This press release contains forward-looking statements and
information that are based on the beliefs of management and reflect
China Health's current expectations. When used in this press
release, the words "estimate", "project", "belief", "anticipate",
"intend", "expect", "plan", "predict", "may" or "should" and the
negative of these words or such variations thereon or comparable
terminology are intended to identify forward-looking statements and
information. The forward-looking statements and information
in this press release includes information relating to sales of
food safety products, the delivery schedule of food safety
products, and the revenue and profit growth of food safety
products. The forward-looking information is based on certain
assumptions, which could change materially in the future, including
the assumption that the orders for food safety products will result
in sales, payment and revenue recognition, the delivery of food
safety products will be on schedule, and food safety products will
be key drivers of the Company's revenue and profit growth.
Such statements and information reflect the current view of China
Health with respect to risks and uncertainties that may cause
actual results to differ materially from those contemplated in
those forward-looking statements and information. By their
nature, forward-looking statements involve known and unknown risks,
uncertainties and other factors which may cause our actual results,
performance or achievements, or other future events, to be
materially different from any future results, performance or
achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the risks
that the food safety product orders from may not result in sales,
the Company may not be able to deliver the food safety products on
schedule, and the Company's food safety products may not contribute
to revenue and profit growth as expected. China Health
cautions that the foregoing list of material factors is not
exhaustive. When relying on China Health's forward-looking
statements and information to make decisions, investors and others
should carefully consider the foregoing factors and other
uncertainties and potential events. China Health has assumed
a certain progression, which may not be realized. It has also
assumed that the material factors referred to above will not cause
such forward-looking statements and information to differ
materially from actual results or events. However, the list
of these factors is not exhaustive and is subject to change and
there can be no assurance that such assumptions will reflect the
actual outcome of such items or factors. China Health has also
included in this press release figures based on orders received,
which is a non-GAAP measure. Readers are cautioned that such
a measure is not recognized under Canadian GAAP and should not be
construed to be an indicator of performance or liquidity or cash
flows. China Health's method of calculating this measure may
differ from the method used by other entities and accordingly China
Health's measure may not be comparable to the measure used by other
entities. THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS PRESS
RELEASE REPRESENTS THE EXPECTATIONS OF CHINA HEALTH AS OF THE DATE
OF THIS PRESS RELEASE AND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER
SUCH DATE. READERS SHOULD NOT PLACE UNDUE IMPORTANCE ON
FORWARD-LOOKING INFORMATION AND SHOULD NOT RELY UPON THIS
INFORMATION AS OF ANY OTHER DATE. WHILE CHINA HEALTH MAY
ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATION AT ANY
PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITH APPLICABLE
LAWS. CHINA HEALTH LABS & DIAGNOSTICS CONTACT: Judyanna
ChenChief Financial OfficerChina Health Labs & Diagnostics
Ltd.T: (416) 865-3351Email: jchen@chinahealthlabs.comBabak
PedramInvestor RelationsTMX EquicomT: (416) 815-0700 ext. 264Email:
bpedram@equicomgroup.com
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