TSX-V: CHO OTCQX: CHLBF www.chinahealthlabs.com TORONTO,
April 17, 2012 /CNW/ - China Health Labs & Diagnostics Ltd.
("China Health" or the "Company") , is pleased to announce the
financial results for the year ended December 31, 2011. The Company
continues to show strong performance in being the leading provider
of total solutions for medical diagnostics and food safety testing
in China and achieved its business and financial goals for the year
ended December 31, 2011: -- Revenue grew by 35% to $45.611 million
and profit grew by 53% to $8.072 million for the year ended
December 31, 2011 compared to the year ended December 31, 2010; --
Earnings per share increased to $0.12 per basic and diluted share
for year ended December 31, 2011 compared to $0.10 for the year
ended December 31, 2010. -- Increased installed base of BK Clinlab
total solution diagnostic labs ("BK Clinlabs") to 833 rural
hospitals, from 210 locations at the start of 2011. Completed
installation of 623 BK Clinlabs total lab solutions in rural
hospitals, with 587 installed in Jilin Province, 20 in Guizhou
Province and 16 in Chongqing. -- Revenues from point of care
technology ("POCT") solutions and products grew 98% to $10.97
million in fiscal 2011, compared with POCT revenues of $5.53
million in fiscal 2010; -- Delivered 67 POCT diagnostic solutions
and 30 POCT backpacks, compared with 35 POCT diagnostic solutions
and nil backpacks delivered in fiscal 2010. The deliveries in 2011
included sales to new customers such as the China's National
Emergency Rescue Team, Chinese Armed Police Force and the Beijing
Emergency Affairs Office; and -- Completed a $9.938 million (RMB
61.5 million) sales order to deliver food safety total lab
solutions to the Beijing municipal government during the fourth
quarter of 2011, representing a 77% increase in food safety
revenues compared to fiscal 2010. "In 2011, our growth was driven
by a breakthrough year for our total lab solutions business, where
we provide our customers with turn-key solutions for medical
diagnostic labs and food safety testing. The growth of our
revenues and margins are a result of the value our solutions
deliver to our customers," said Wilson Yao, CEO of China Health.
"We achieved a key milestone by completing our first provincial
level installation of 587 diagnostic labs in rural hospitals in
Jilin province, showing provincial decision makers in China that we
can deliver a large project, including the implementation of a
service network to provide an ongoing reagents, consumables and
maintenance. Our investment in R&D for product
development helped us add new customers for our POCT business and
facilitated the growth of our food safety business with new and
improved software for our lab management system. We worked
with our customers in 2011 to develop and improve solutions that
leverage our proprietary expertise and technology for lab
management, resulting in the launching of new products this year
that will help us serve our customers and deliver strong growth for
our shareholders in 2012 and beyond." Revenue for the year ended
December 31, 2011 increased by 35% to $45.611 million, compared to
$33.705 million for the year ended December 31, 2010. The growth in
revenues was largely due to increased sales for each of the
Company's total lab solution business sectors, being the rural
hospital and clinics, point of care technology solutions and food
safety. Revenues from total lab solutions, including all three
sectors, increased by 99% to comprise 58% of total revenues in
2011, compared to 40% of total revenues in 2010. Gross margin for
the year ended December 31, 2011 increased by 51% to $20.044
million, compared to $13.235 million for the year ended December
31, 2010 due to increased revenue in the total lab solution
business sectors in 2011. Gross margin as a percentage of revenues
for the year ended December 31, 2011 was 44% compared to 39% for
the year ended December 31, 2010. The increase in gross margin as a
percentage of revenue was due to changes in sales mix. The
higher gross margin as a percentage of revenue for year ended
December 31, 2011 was due to strong growth in higher margin POCT
solution sales and revenues from the installation of the 607 BK
Clinlabs. The total revenues from POCT solutions and BK Clinlabs
was approximately 38% of total revenues for the year ended December
31, 2011, compared to 24% for the year ended December 31, 2010. In
the year ended December 31, 2010, 60% of Company's revenues
consisted of sales of in-vitro diagnostic equipment to large urban
hospitals, compared to 42% in 2011, which generate lower gross
margin as compared to the sales of POCT solutions and BK Clinlab
rural total lab solutions. Administrative expenses for the year
ended December 31, 2011 increased by 25% to $7.319 million,
compared to $5.855 million for the year ended December 31, 2010.
The principal reason for the increase was higher overhead costs
including new employees and expanded facilities to support a
growing customer base and sales, as well as additional costs
associated with being a public company on the TSX-V since October
2010, and the increase is offset by qualifying transaction costs of
$1.710 million expensed in 2010. Administrative expenses as a
percentage of revenues decreased to 16% for the year ended December
31, 2011, in comparison to 17% for the year ended December 31,
2010. Share-based compensation for the year ended December 31, 2011
was $0.795 million, compared with $0.379 million for the year ended
December 31, 2010. The share-based compensation expense is a result
of granting stock options to its employees including directors and
officers in October 2010 and September 2011 and to employees in
April 2011. Research and development ("R&D") expenditures for
the year ended December 31, 2011 increased by 45% to $0.647
million, compared to $0.446 million for the year ended December 31,
2010. Research and development expense as a percentage of
revenues was approximately 1% for the years ended December 31, 2011
and 2010. In 2010, research and development focused on POCT
products for the Chinese military and improving the automation for
certain diagnostic equipment. In 2011, research and development was
focused on developing a full range of POCT solutions and improving
the LMS system. The Company is accelerating product development to
maintain its competitive advantages in the areas where it has
developed unique proprietary solutions. Since the Company often
collaborates with its customers to develop solutions, it is able to
keep costs under control while developing products tailor made to
customer needs. In March 2012, the Company launched four new
products: Type C POCT Diagnostic Field Lab, Rural Emergency Rescue
Medical Total Solution, BK Early Diagnosis System for
Cardio-Cerebral Vascular Disease and BK Food Safety Rapid Test
System. These new products were developed to meet specific
medical diagnostic and food testing needs and according to the
Company's knowledge of Chinese government policy and budget
priorities. Selling expenses for the year ended December 31, 2011
increased by 122% to $2.170 million, compared to $0.977 million for
the year ended December 31, 2010. Selling expense as a percentage
of revenues was 5% for the year ended December 31, 2011, compared
to 3% for the year ended December 31, 2010. Selling expenses are
expected to increase in subsequent periods due to plans to expand
the rural lab solution business to additional Chinese provinces and
the food safety business to additional Chinese cities. Selling and
marketing expenditures include salaries and benefits, travel,
promotion and advertising costs. Government subsidy income for the
year ended December 31, 2011 was $0.449 million, compared with
$0.412 million for the year ended December 31, 2010. From time to
time, the Company will receive government subsidies for one of its
PRC subsidiaries' that qualifies as a high-tech Company and is
involved in developing the Company's lab management software, and
also for another PRC subsidiary that is located in a certain
district and is eligible for government grant for outstanding
performance. Current income tax expense for the year ended December
31, 2011 was $2.038 million, compared with $0.990 million for the
year ended December 31, 2010. The increase in income taxes is
mainly due to an overall increase in taxable income being earned by
the legal entities subject to the 25% tax rate, in comparison to
the taxable income earned by legal entities which are subject to
preferential tax rates. Operating profit for the year ended
December 31, 2011 increased by 63% to $10.357 million, compared to
$6.369 million for the year ended December 31, 2010. Profit for the
year ended December 31, 2011 increased by 53% to $8.072 million,
compared to $5.281 million for the year ended December 31,
2010. Profit includes operating profit, interest expense,
interest income and foreign exchange loss. Profit in the year ended
December 31, 2011 represents 18% of revenue, compared to 16% of
revenue for the year ended December 31, 2010. The increase in
operating profit and profit is due to the growing customer base and
revenues, and to the growth in sales of rural lab solutions and
POCT total lab solutions, which generate higher margins than the
Company's other products. Profit as a percentage of revenues was
higher in the year ended December 31, 2011 due to the increased
sales of rural lab solutions and POCT total labs solutions relative
to the Company's other products. However, the higher margins
generated were partially offset by higher administrative expenses
incurred to support overall increase in the Company's operations,
share-based compensation expenses and additional costs associated
with being a public company on the TSX-V since October 2010. Basic
and fully diluted EPS was $0.12 for the year ended December 31,
2011, compared to $0.10 for the year ended December 31, 2010 due to
increased profit partially offset by issuing new shares from the
exercise of stock options and share purchase warrants. The average
number of basic ordinary shares outstanding for the year ended
December 31, 2011 was 65,348,870 (fully diluted 67,218,937),
compared to 54,651,427 (fully diluted 55,188,352) average shares
outstanding for the year ended December 31, 2010. Cash and
short-term investments totaled $5.661 million as at December 31,
2011, compared with $5.726 million of cash and short-term
investments as at December 31, 2010. The Company's working
capital as of December 31, 2011 was $26.538 million, compared with
a $16.063 million working capital as of December 31, 2010.
Working capital increased by $10.475 million, or 65%, mainly due to
an increase in inventories by $4.228 million, increase in trade and
other receivables by $4.213 million and a decrease in deferred
revenue by $2.274 million and loans payable by $1.146 million,
which was offset by $1.515 million increase in income taxes payable
and $1.177 million decrease in loans receivable. The Company is
well positioned to expand its business for rural lab total
solutions, POCT lab solutions and food safety lab solutions.
The Company may need to access additional debt or equity funding if
it seeks to accelerate its growth, if it enters into an agreement
for a large number of total lab solutions or if it pursues suitable
acquisition opportunities. Outlook & Growth Strategy The
Company believes that it can continue its strong growth in revenues
and profits and build on the leading position it has established in
China in providing total lab solutions for rural hospitals and
clinics, POCT solutions for military and emergency services, and
food safety lab solutions, based on the size and growth of the
Chinese market for medical diagnostics and food safety, the
government support for the market and the Company's proprietary
products and services and customer relationships. In 2012, China
Health intends to expand its business by focusing its efforts on
expanding its sales network to additional Chinese provinces and
cities in the areas where it has proprietary products and limited
competition. Going forward, China Health expects revenue growth
from its total lab solutions business lines to continue to be
stronger than growth from its traditional business with large urban
hospitals, and to comprise a higher percentage of revenues. China
Health will be hosting an investor conference call on Tuesday,
April 17, 2012 at 10:00am (Eastern Time). The purpose of this
conference call will be to provide investors with the fourth
quarter and year end results of the Company. Representatives of
China Health on the conference call will be: Mr. Shiping (Wilson)
Yao, President and Chief Executive Officer Ms. Judyanna Chen, Chief
Financial Officer Mr. Kim Oishi, Member of the Board of Directors
Mr. Chao Zhang, Vice President, Finance Following the update, a
question and answer session will be held. To participate, the time
and call-in instructions are as follows: DATE: Tuesday, April
17, 2012 TIME: 10:00am, Eastern Time Participant Dial-In
Number(s): North America Toll-Free Dial-In Number: 1 (888) 231-8191
For Toronto and International Callers: 1 (647) 427-7450 A Taped
Replay will be available from 12:00 pm Eastern Time on April 17,
2012 to 11:59 pm Eastern Time on May 1, 2012. Taped Replay Toll
Free Number: 1.855.859.2056 Taped Replay Local Dial-in Numbers:
(778) 371-8506 (416) 849-0833 (514) 807-9274 (403) 451-9481 (613)
667-0035 (902) 455-3955 Taped Replay Password: 70515797 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 2011, China Health had revenues of approximately
$45.6 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 that
are supported by Chinese government policy and budgets: BK Clinlab
total lab solutions for rural hospitals and clinics, POCT 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 This news 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 news 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 news release includes information relating
to an increase in selling expenses due to plans to expand the rural
lab solution business to additional Chinese provinces and the food
safety business to additional Chinese cities; the need to access
additional debt or equity funding if the Company seeks to
accelerate its growth, if it enters into an agreement for a large
number of total lab solutions or if it pursues suitable acquisition
opportunities; the continuation of the Company's strong growth in
revenues and profits and the building of its leading position in
China in providing total lab solutions for rural hospitals and
clinics, POCT solutions for military and emergency services, and
food safety lab solutions; expansion of the Company's business by
focusing on expanding its sales network to additional Chinese
provinces and cities in the areas where it has proprietary products
and limited competition; and the revenue growth from the Company's
total lab solutions business lines to continue to be stronger than
growth from its traditional business with large urban hospitals,
and to comprise a higher percentage of revenues. The
forward-looking information is based on certain assumptions, which
could change materially in the future, including the assumption
that the Company's products and services, operations, market,
marketing plans and strategies, competitive conditions, future
developments and proprietary protections continue as
projected. 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
risk that the Company may not proceed or alter its growth strategy,
the Company may not be able to obtain any required financing to
accelerate growth on acceptable terms or at all, gross margins,
revenues and profits may not continue to increase or increase less
than expected, costs and expenses may increase greater than
expected, and the Company may not be able to expand its business as
expected through its sales network in any of the areas in which it
has proprietary products, limited competition and strong government
support. These and other risks are further described under
"Risk Factors" in the Company's management's discuss and analysis
dated April 16, 2012, which is available on SEDAR and may be
accessed at www.sedar.com. 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. The Company has also included in this news release figures
based on sales orders, installation and deliveries, which are not
measures recognized under IFRS and do not have a standardized
meaning prescribed by IFRS. Readers are cautioned that such
measures are not recognized under IFRS and should not be construed
to be indicators of performance or liquidity or cash flows.
The Company's method of calculating these measures may differ from
the method used by other entities and accordingly the Company's
measures may not be comparable to the measures used by other
entities. THE FORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS
RELEASE REPRESENTS THE EXPECTATIONS OF CHINA HEALTH AS OF THE DATE
OF THIS NEWS 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 Equicom GroupT: (416) 815-0700 ext.
264Email: bpedram@equicomgroup.com
Copyright
China Health Labs And Diagnostics Ltd (TSXV:CHO)
Historical Stock Chart
From Jun 2024 to Jul 2024
China Health Labs And Diagnostics Ltd (TSXV:CHO)
Historical Stock Chart
From Jul 2023 to Jul 2024