BEIJING, May 9, 2012 /PRNewswire-Asia-FirstCall/ --
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 its first
quarter ended March 31, 2012.
(Logo: http://photos.prnewswire.com/prnh/20100422/CNTH001LOGO
)
First Quarter 2012 Financial and Operating Highlights
(percentage comparisons are year over year)
- Revenues of $3.3 million, up
12.3%
- Gross profit of $1.2 million, up
24.4%; gross margin improved to 37.4% from 33.8%
- Income from operations of $454,820, an increase of 52.4%
- Net income attributable to the Company of $126,021, or $0.03
per basic and diluted share, compared to $205,414, or $0.04
per diluted share in the prior year. Net income included a
non-cash change in fair value of warrants liability of $199,508 in the first quarter of 2012.
Mr. Ping Chen, Chief Executive
Officer of Dehaier Medical, stated, "In the first quarter of 2012,
we continued to show strong growth in China and have begun to enter international
markets. We continue to grow our medical device distribution
platform business, which includes working with a number of larger
international manufacturers. We recently extended our
exclusive agreement with Timesco of London Ltd., a progressive
surgical and medical company. Simultaneously, we are
developing our own branded product line domestically and
abroad. Within China, our homecare medical products, focused
primarily on sleep disorder and respiratory ailments, continued to
gain traction among Chinese consumers."
Mr. Chen continued, "We are also continuing to diversify our
revenues. In the first quarter of 2012, we focused on
implementing state-level government-contracted projects. We
have placed a strong emphasis on obtaining provincial contracts
throughout China, which are larger
in size and scale. In March, Dehaier won a new bid to implement a
government procurement project to provide imaging equipment for
township hospitals in Xi'an,
Shaanxi, China. We believe
this bid demonstrates how far our Company has grown, indicates the
government's faith in our ability to complete these projects, and
could significantly contribute to our revenues in 2012."
Financial Review
Ms. Aileen Qi, Chief Financial
Officer of Dehaier, commented, "We were pleased with our first
quarter financial results, which were in line with the Company's
expectations. Our favorable mix of product sales and market
share gains led to a 12.3% revenue increase over the prior-year's
quarter. Dehaier's growth was mainly driven by sales of our
traditional medical devices and government procurement
projects. We have also focused on streamlining our costs and
improving our inventory management and were pleased to lower our
operating expenses as a percentage of sales. This has
benefitted the Company considerably during a time of inflationary
pressures on our products and has allowed Dehaier to remain
cost-competitive."
First Quarter 2012 Financial Highlights
- Total revenues increased by 12.3% to $3.3 million for the three months ended
March 31, 2012 from $3.0 million in the prior-year quarter, largely
as a result of wider distribution of third-party products and the
expansion of Dehaier's own branded respiratory products.
- The Company's gross profit for the quarter ended March 31, 2012 was $1.2
million, or 37.4% of revenue, compared to $1.0 million, or 33.8% of revenue in the
prior-year period. Gross margin improved largely as a result
of improved inventory management by the Company, along with
increased operating effectiveness.
- Dehaier's income from operations improved 52.4% to $454,820 in the 2012 first quarter from
$298,368 in the prior-year period,
largely as a result of increased sales, improved gross margin, and
lower selling, general, and administrative expenses ("SG&A") as
a percent of revenue.
- The Company reported net income attributable to the Company of
$126,021, or $0.03 per diluted share in the 2012 first
quarter, compared to $205,414, or
$0.04 per diluted share in the prior
year. The decrease in net income per diluted share was due to a
non-cash expense related to changes in the fair value of warrant
liability of $199,508, compared to a
gain for the prior year period of $9,526.
Balance Sheet Highlights
(in millions except
for percentages)
|
|
3/31/2012
|
|
12/31/2011
|
%
Change
|
Cash and Cash
Equivalents
|
$
|
2.3
|
$
|
3.7
|
-37.8%
|
Working
Capital
|
|
27.5
|
|
27.0
|
2%
|
Total Long-term
Debt
|
|
0
|
|
0
|
N/A
|
Stockholders'
Equity
|
|
30.5
|
|
30.2
|
0.8%
|
The Company believes that its currently available working
capital of $27.5 million, including
cash of $2.3 million, should be
adequate to meet its anticipated cash needs and sustain its current
operations for at least 12 months.
Outlook for 2012
Mr. Chen concluded, "Over the next few months, our primary focus
is to utilize our existing distribution business as a platform to
expand and grow into new revenue streams. We launched our
home oxygen therapy service ("HOTS") in Beijing in the third quarter of 2011, and our
management team remains focused on development and research of
products as well as identifying the target customers, which we feel
will contribute significantly to our future growth. We also
have continued our expansion into the International healthcare
market. In early 2012, we received CE Mark approval for our
sleep diagnostic devices and air compressors, which will facilitate
our efforts to sell our products in the European Union. We are
seeking new and cost-effective means of distributing our products
worldwide and are always looking for ways to corporate with others.
Medical equipment sales and distribution will remain our main
source of revenue going forward, and we expect this segment to
develop at a stable pace and to serve as our foundation for
growth. We will continuously leverage our cross-selling
opportunities by expanding existing relationships of third-party
distributed products, seeking new distribution partners and
building international business for our proprietary
products."
Conference Call and Webcast
Dehaier will host a conference call for investors tomorrow
morning on Thursday, May 10, 2012 at
8:30 a.m. ET.
Interested parties may access the call by dialing:
Live Participant Dial In (Toll Free):
877-407-8033
Live Participant Dial In (International – Country Code - 001):
201-689-8033
For those unable to participate, the call will be available as a
live, listen-only webcast on the Company's website at
http://www.dehaier.com.cn or by clicking the following link:
http://www.investorcalendar.com/IC/CEPage.asp?ID=168495.
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),
HEYER (Germany), Timesco (UK) and
eVent Medical (US). Dehaier's technology is based on six patents
and five software copyrights; additionally Dehaier has two pending
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, implementation of
and performance under the joint venture agreement by all parties,
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.
Contact Us
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
The Equity Group Inc.
Katherine Yao
+86 10-6587-6435
kyao@equityny.com
In America
The Equity Group Inc.
Adam Prior
(212) 836-9606
aprior@equityny.com
DEHAIER MEDICAL
SYSTEMS LIMITED AND AFFILIATE
|
CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
|
(UNAUDITED)
|
|
For the three
months ended
|
|
March
31,
|
|
2012
|
|
2011
|
|
US$
|
|
US$
|
Revenue
|
3,315,931
|
|
2,952,706
|
|
|
|
|
Costs of
revenue
|
(2,074,656)
|
|
(1,955,247)
|
|
|
|
|
Gross profit
|
1,241,275
|
|
997,459
|
|
|
|
|
Service income
|
40,397
|
|
84,833
|
Service expenses
|
(17,460)
|
|
(40,697)
|
General and administrative
expense
|
(490,713)
|
|
(503,526)
|
Selling expense
|
(318,679)
|
|
(239,701)
|
|
|
|
|
Operating
Income
|
454,820
|
|
298,368
|
|
|
|
|
Financial expenses ( including
interest expense of $27,163 and $16,177)
|
(27,649)
|
|
(15,613)
|
Change in fair value of
warrants liability
|
(199,508)
|
|
9,526
|
|
|
|
|
Income before provision for
income tax
|
227,663
|
|
292,281
|
|
|
|
|
Provision for income
tax
|
(97,048)
|
|
(82,537)
|
|
|
|
|
Net income
|
130,615
|
|
209,744
|
|
|
|
|
Non-Controlling interest in
income
|
(4,594)
|
|
(4,330)
|
|
|
|
|
Net income attributable to
Dehaier Medical Systems Limited
|
126,021
|
|
205,414
|
|
|
|
|
Net income
|
130,615
|
|
209,744
|
|
|
|
|
Other comprehensive
income
|
|
|
|
Foreign currency translation
adjustments
|
42,795
|
|
187,280
|
|
|
|
|
Comprehensive
Income
|
173,410
|
|
397,024
|
Comprehensive loss (income)
attributable to the non-controlling interest
|
(6,766)
|
|
6,576
|
|
|
|
|
Comprehensive income
attributable to Dehaier Medical Systems Limited
|
166,644
|
|
403,600
|
|
|
|
|
Earnings per
share
|
|
|
|
-Basic
|
0.03
|
|
0.05
|
-Diluted
|
0.03
|
|
0.04
|
|
|
|
|
Weighted average number of
common shares used in computation
|
|
|
|
-Basic
|
4,562,611
|
|
4,502,667
|
-Diluted
|
4,710,528
|
|
4,660,167
|
DEHAIER MEDICAL
SYSTEMS LIMITED AND AFFILIATE
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(UNAUDITED)
|
|
March
31,
|
|
December 31,
|
|
2012
|
|
2011
|
|
US$
|
|
US$
|
|
|
|
|
ASSETS
|
|
|
|
CURRENT ASSETS:
|
|
|
|
Cash and cash
equivalents
|
2,299,270
|
|
3,694,486
|
Accounts receivable
-less allowance for doubtful accounts of $860,826 and
$859,509
|
12,899,579
|
|
12,159,842
|
Other receivables
|
4,223,142
|
|
2,522,136
|
Prepayment and other current
assets
|
6,632,088
|
|
6,714,001
|
Inventories, net
|
4,157,547
|
|
5,532,311
|
Tax receivable
|
371,283
|
|
888,452
|
Deferred tax asset
|
118,210
|
|
118,030
|
Total Current
Assets
|
30,701,119
|
|
31,629,258
|
|
|
|
|
Property and equipment,
net
|
3,240,476
|
|
3,348,533
|
Total Assets
|
33,941,595
|
|
34,977,791
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
CURRENT
LIABILITIES:
|
|
|
|
Short-term
borrowings
|
1,747,152
|
|
1,585,890
|
Accounts
payable
|
28,386
|
|
32,925
|
Advances from
customers
|
194,197
|
|
303,000
|
Accrued expenses and other
current liabilities
|
322,523
|
|
349,158
|
Taxes payable
|
548,897
|
|
2,042,048
|
Warranty obligation
|
335,193
|
|
334,680
|
Total Current
Liabilities
|
3,176,348
|
|
4,647,701
|
|
|
|
|
OTHER
LIABILITIES
|
|
|
|
Warrants liability
|
295,977
|
|
96,469
|
Total
Liabilities
|
3,472,325
|
|
4,744,170
|
|
|
|
|
Commitments and
Contingency
|
|
|
|
|
|
|
|
Equity
|
|
|
|
Common shares, $0.002731 par
value, 18,307,038 shares authorized, 4,565,000 and 4,560,000 shares
issued and outstanding at March 31, 2012 and December 31, 2011,
respectively
|
12,467
|
|
12,454
|
Additional paid in
capital
|
13,341,429
|
|
13,281,374
|
Retained earnings
|
13,067,592
|
|
12,941,572
|
Accumulated other
comprehensive income
|
2,628,283
|
|
2,585,488
|
Total Dehaier Medical
Systems Limited shareholders' equity
|
29,049,771
|
|
28,820,888
|
Non-controlling
interest
|
1,419,499
|
|
1,412,733
|
Total equity
|
30,469,270
|
|
30,233,621
|
Total liabilities and
equity
|
33,941,595
|
|
34,977,791
|
DEHAIER MEDICAL
SYSTEMS LIMITED AND AFFILIATE
|
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(UNAUDITED)
|
|
|
For the three months
ended
|
|
|
March 31,
|
|
|
2012
|
|
2011
|
|
|
US$
|
|
US$
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
|
Net income
|
|
130,615
|
|
209,744
|
Adjustments to reconcile
net income to net cash used in operating activities
|
|
|
|
|
Stock-based compensation
expense
|
|
60,068
|
|
59,300
|
Depreciation and
amortization
|
|
118,724
|
|
109,373
|
Change in fair value of
warrants liability
|
|
199,508
|
|
(9,526)
|
Increase in accounts
receivable
|
|
(739,737)
|
|
(752,897)
|
Decrease (Increase) in
prepayments and other current assets
|
|
81,913
|
|
(2,884,433)
|
Decrease (Increase) in other
receivables
|
|
(1,701,006)
|
|
167,707
|
Decrease in
inventories
|
|
1,374,764
|
|
484,029
|
Decrease (Increase) in
tax receivable
|
|
517,169
|
|
(69,169)
|
Increase (Decrease) Increase
in accounts payable
|
|
(4,539)
|
|
116,617
|
Decrease (Increase) in
advances from customers
|
|
(108,803)
|
|
25,248
|
Increase in accrued expenses
and other current liabilities
|
|
(26,122)
|
|
(17,345)
|
(Decrease) Increase in tax
payable
|
|
(1,493,151)
|
|
447,618
|
Net cash used in
operating activities
|
|
(1,590,597)
|
|
(2,113,734)
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
Capital expenditures and
other additions
|
|
(5,758)
|
|
(8,274)
|
Advances to related
parties
|
|
-
|
|
(2,358)
|
Net cash used in
investing activities
|
|
(5,758)
|
|
(10,632)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
Proceeds from bank
loan
|
|
791,315
|
|
-
|
Repayment of bank
loan
|
|
(631,428)
|
|
(610,816)
|
Net cash provided by
(used in) financing activities
|
|
159,887
|
|
(610,816)
|
|
|
|
|
|
Effect of exchange rate
fluctuations on cash and cash equivalents
|
|
41,252
|
|
184,469
|
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
|
(1,395,216)
|
|
(2,550,713)
|
|
|
|
|
|
Cash and cash
equivalents at beginning of period
|
|
3,694,486
|
|
5,923,386
|
|
|
|
|
|
Cash and cash
equivalents at end of period
|
|
2,299,270
|
|
3,372,673
|
|
|
|
|
|
Supplemental cash
flow information
|
|
|
|
|
Income tax
paid
|
|
775,123
|
|
4,583
|
Interest paid
|
|
27,163
|
|
16,177
|
SOURCE Dehaier Medical Systems Ltd.