Net Sales Increase 24.2% to $9.8 Million with Gross Margins of
36.5% SHANGHAI, China, Aug. 21 /Xinhua-PRNewswire-FirstCall/ --
Aamaxan Transport Group, Inc. (the "Company" or "ATG") (OTC:AAXT)
(BULLETIN BOARD: AAXT) , through its subsidiaries, including
Shanghai Medical Technology Co., Ltd. ("Shanghai Medical"), a PRC
company and a leading provider of Hemodialysis equipment ("HDE")
and other related supplies and services, including disposable and
diagnostic products, throughout Eastern China, reported its un-
audited financial results for the second quarter of 2008 which
ended June 30, 2008. Second Quarter 2008 Results Q2 2008 Q2 2007
vs. Q1 2007 Revenue $9.8 million $7.9 million +24.2% Gross Profit
$3.6 million $3.0 million +18.5% Net Income $1.6 million $1.7
million -4.7% EPS (Fully Diluted) $0.11 $0.11 - 0 - Business
Highlights -- In April 2008, the Company completed a private
placement with institutional and accredited investors which
resulted in gross proceeds to the Company of approximately $12.5
million. -- Shanghai Medical is one of the largest single
distributors of HD equipment and supplies in the PRC. The Company's
customers include over 200 medical facilitates, which are comprised
of 60 hospitals (including Shanghai's top five), blood bank and
diagnostic centers in Shanghai and Eastern China, and thirty public
health centers. -- Shanghai Medical utilizes over 20 distributors
to reach Eastern China and has strategically partnered with a major
global provider of blood dialysis and diagnostic equipment, to
ensure that it meets the growing demand for Chinese dialysis
products. Second Quarter of 2008 Results (Unaudited): Net revenues
for the second quarter of 2008 increased 24.2% to $9.8 million
compared to $7.9 million for the same period last year. Revenues
during the second quarter of 2008 were derived from an increase in
sales volume throughout the Shanghai area, as the company added new
customers including hospitals and clinics, and patients covered by
government reimbursement plans. Hemodialysis equipment and related
disposables generated a majority of net sales for the second
quarter of 2008, while disposables comprised approximately 50% of
net sales. Gross profit for the second quarter of 2008 was up 18.5%
to $3.6 million, compared to $3.0 million for the same period last
year, yielding gross margins of 36.5% and 38.3%, respectively. The
slight decrease in gross margins was due to increasing competition,
which caused pricing pressure especially at the larger hospitals.
Operating expenses for the second quarter were $1.35 million
compared to $0.48 million for the same period last year. The
increase was due primarily to financing costs, sales and marketing
expenditures in entering new markets and management's decision to
expand the organization to accommodate future growth while
targeting larger volume sales. Operating margins were 22.7%
compared to 32.2% for the second quarter of 2008 and 2007,
respectively. Net income for the second quarter of 2008 decreased
4.7% to $1.6 million or $0.11 per diluted share, compared to $1.7
million or $0.11 per diluted share, in the second quarter of 2007.
For the second quarter of 2008, the company used weighted average
shares outstanding of 15 million. However, during the second
quarter, the company completed a capital raise on April 15, 2008.
Assuming a conversion of the convertible preferred shares, the
company has 20.0 million shares outstanding post the merger and 2.0
million warrants. Six Month Financial Results: Net Revenues
increased approximately 26.3% to $20 million for the six months
ended June 30, 2008 as compared to $15.8 million for the same
period last year. Operating expenses for the six months ended June
30, 2008 were $2.3 million compared to $0.96 million for the same
period in 2007, an increase of 139.5%. Operating income for the six
months ended June 30, 2008 was $5 million, an increase of 2.4%
compared to $5.1 million for the six months ended June 30, 2007.
Net income was $3.55 million for the six months ended June 30,
2008, an increase of $0.16 million, or approximately 4.8% compared
to the same period last year. This equated to earnings of $0.18 per
diluted share, compared to $0.23 per diluted share for the first
six months of 2007 based on 20 and 15 million diluted shares,
respectively. Liquidity and Capital Resources: Cash and cash
equivalents totaled $10.8 million as of June 30, 2008 compared to
$2.3 million on December 31, 2007, which includes the $12.5 million
financing completed on April 15, 2008. The company had $14.6
million in working capital and a current ratio of 2.57 to 1.
Accounts receivable were $4.0 million. On June 30, 2008
Shareholders' Equity was $24.3 million compared to $14.1 million on
December 31, 2007. Mr. Chen concluded, "Our vision and growth
strategy is to become a dominant integrated service provider of
Hemodialysis (HD) and Renal Care products in China. We will strive
to be innovative, while improving operating efficiencies and
profitability." Growth Strategy Shanghai Medical's goal is to
become the dominant provider of Hemodialysis and renal care
equipment, supplies, and related support services in Eastern China.
-- Expand and Strengthen Existing Product Lines -- Leverage
existing relationships and technical expertise to expand product
offerings, including new pharmaceutical and medical devices to its
product line. -- Integrating products and services to create a
vertically integrated organization. -- Expand and Strengthen
Distribution Network in the PRC -- Expand distribution to other
strategic regions of the PRC and capitalize on possible
acquisitions. -- Build a nationwide Service Center network for HD
services, drugs and related medical devices expanding beyond the
Shanghai market -- Create a stable, recurring revenue stream which
will complement growth. About Shanghai Medical Technology Co., Ltd.
Shanghai Medical is a leading provider of Hemodialysis and renal
care equipment, supplies, and related support services in Eastern
China. Specifically, Shanghai Medical distributes and sells
Hemodialysis equipment ("HDE") which is mainly used by hospitals
and medical facilities and includes machines, dialyzers,
disposables and diagnostic products used in Hemodialysis,
throughout the People's Republic of China. Cautionary Statement
Regarding Forward Looking Information This press release may
contain forward-looking information about the Company, Asian Group
Management Group Ltd and Shanghai Medical. Forward- looking
statements are statements that are not historical facts. These
statements can be identified by the use of forward-looking
terminology such as "believe," "expect," "may," "will," "should,"
"project," "plan," "seek," "intend," or "anticipate" or the
negative thereof or comparable terminology, and statements which
may include discussions of strategy, and statements about industry
trends future performance, operations and products of each of the
entities referred to above. Actual performance results may vary
significantly from expectations and projections as a result of
various factors, including without limitation and the risks set
forth "Risk Factors" contained in the Company's Current Report on
Form 8-K filed on April 21, 2008. The shares of common stock issued
in connection with the transactions have not been registered under
the Securities Act of 1933, as amended, and may not be offered or
sold in the United States absent registration under the Securities
Act and applicable state securities laws or an applicable exemption
from those registration requirements. The Company has agreed to
file a registration statement covering the resale of the shares of
common stock issued in the private placement and certain other
shares, within 45 days of closing. This press release does not
constitute an offer to sell or the solicitation of an offer to buy
any of the securities referenced herein in any jurisdiction to any
person. - Financial Tables to Follow - AAMAXAN TRANSPORT GROUP,
INC. CONSOLIDATED BALANCE SHEETS AS AT JUNE 30, 2008 AND DECEMBER
31, 2007 (Stated in US Dollars)(Unaudited) June 30, December 31,
2008 2007 ASSETS Current assets Cash and cash equivalents
$10,769,286 $ 2,299,772 Trade receivables, net 4,022,912 2,408,223
Subscription receivables 394,916 371,035 Other receivables
1,222,957 197,845 Inventories 1,826,478 1,206,676 Advances to
suppliers 4,257,726 1,125,088 Prepayments 2,692 1,368 Current
portion of long term prepayments 1,455,223 1,367,222 Total current
assets $23,952,190 $ 8,977,229 Restricted cash 300,000 -- Due from
a director 54,292 6,796 Goodwill arising from acquisition 43,259
40,643 Deposit for an unlisted investment 873,134 820,333 Long term
prepayments 3,371,266 3,851,009 Plant and equipment, net 190,407
184,330 Intangible assets, net 5,043,802 5,023,174 TOTAL ASSETS
$33,828,350 $ 18,903,514 LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities Accounts payable $ 2,852,643 $ 2,538,964 Due to
a related company 135,086 54,689 Customers' deposits 24,271 49,325
Accruals 401,275 316,545 Other payables 1,213,594 719,172 Warrant
liabilities 4,028,229 -- Income tax payable 664,241 909,579 Total
current liabilities $ 9,319,339 $ 4,588,274 TOTAL LIABILITIES $
9,319,339 $ 4,588,274 Commitments and contingencies $ -- $ --
Minority interests $ 218,628 $ 217,715 Preferred Stock - $0.001 par
value 10,000,000 share authorized; 4,008,188 and nil shares
outstanding respectively $ 8,503,771 $ -- STOCKHOLDERS' EQUITY
Common stock - $0.0001 par value 200,000,000 shares authorized;
15,991,812 and 14,991,812 shares outstanding respectively $ 1,599 $
1,499 Additional paid-in capital 1,723,129 588,265 Statutory
reserves 2,529,527 2,529,527 Retained profits 9,598,089 10,085,066
Accumulated other comprehensive income 1,934,268 893,168
$15,786,612 $ 14,097,525 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY
$33,828,350 $ 18,903,514 AAMAXAN TRANSPORT GROUP, INC. CONSOLIDATED
STATEMENT OF INCOME FOR THE THREE MONTHS ENDED JUNE 30, 2008 AND
2007 (Stated in US Dollars)(Unaudited) 2008 2007 Net revenues $
9,781,453 $ 7,872,705 Cost of net revenues (6,207,537) (4,857,027)
Gross profit $ 3,573,916 $ 3,015,678 Selling expenses (287,148)
(132,750) General and administrative expenses (1,060,792) (349,801)
Income from operation $ 2,225,976 $ 2,533,127 Interest income 9,877
558 Income before income taxes $ 2,235,853 $ 2,533,685 Income taxes
(654,923) (875,724) Net income before minority interests $
1,580,930 $ 1,657,961 Minority interests 424 2,185 Net income
1,581,354 1,660,146 Net income per share: -Basic $ 0.11 $ 0.11
-Diluted $ 0.11 $ 0.11 Weighted average number of common stock
-Basic $ 14,991,812 $ 14,991,812 -Diluted $ 14,991,812 $ 14,991,812
For more information, please contact: For the Company: Mr. Chen
Zhong, CEO and Chairman Email: Investor Relations: HC
International, Inc. Ted Haberfield, Executive VP Phone:
+1-760-755-2716 Email: DATASOURCE: Shanghai Medical Technology Co.,
Ltd. CONTACT: For the Company - Mr. Chen Zhong, CEO and Chairman, ;
Investor Relations: HC International, Inc. - Ted Haberfield,
Executive VP, +1-760-755-2716, or
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