China Health Labs & Diagnostics Ltd. enters agreement to install 59 BK Clinlabs in Jilin province
May 29 2012 - 8:00AM
PR Newswire (Canada)
TSX-V: CHO OTCQX: CHLBF www.chinahealthlabs.com TORONTO,
May 29, 2012 /CNW/ - China Health Labs & Diagnostics Ltd.
("China Health" or the "Company") , is pleased to announce that it
has entered into an agreement with the Jilin Department of Health
to install 59 rural diagnostic lab total solutions ("BK Clinlabs"),
expected to generate approximately $0.66 million (RMB 4.1 million)
in revenues in 2012. This agreement increases the Company's
network to 965 BK Clinlabs installed or contracted for installation
in eight provinces of China, compared to 210 locations at the
beginning of 2011. After the completion of the 59 new labs, China
Health will have an installed base of 646 BK Clinlabs in Jilin
Province. In 2011, China Health installed 587 BK Clinlabs in
Jilin Province, successfully completing its largest installation to
date. "Our successful installation of 587 BK Clinlabs in Jilin,
including the service centers that provide an ongoing supply of
reagents and maintenance, gave the Jilin government the confidence
to increase its investment in our diagnostic lab total
solution. Our diagnostic lab solution is enabling rural
hospitals to diagnose and treat patients, increasing their revenues
and supporting the Chinese government policy of improving rural
health care," said Wilson Yao, CEO of China Health. "Our
track record of delivering a working solution is supporting our
efforts to expand our network of labs in the eight provinces where
we have established BK Clinlabs and into new provinces." During the
fourth quarter of fiscal year 2011, the Company entered into an
agreement to install 44 BK Clinlabs in Chongqing. The 44
Chongqing BK Clinlabs are being installed under a new business
model, whereby the Company will install the BK Clinlabs in return
for a five-year contract to provide testing reagents and
maintenance services that is expected to generate revenues of a
minimum of $2.81 million (RMB 17.7 million). In the three-month
period ended March 31, 2012 the Company entered into agreements to
install up to a total of 45 BK Clinlabs in three new areas being
Hebei Province, Qinghai Province and the Xinjiang Uygur Autonomous
Region. As at March 31, 2012, the Company completed installation of
41 BK Clinlabs, including the 40 BK Clinlabs in Chongqing and 1 BK
Clinlabs in the Xinjiang Uygur Autonomous Region. During the fourth
quarter of fiscal year 2011, the Company entered into an agreement
to provide 63 Rural Mobile Labs to the Health Care Bureau in
Xinjiang Uygur Autonomous Region, which was all delivered by March
31, 2012. The Rural Mobile Labs are a new product developed to
serve sparsely populated remote rural areas that do not have local
hospitals. This new product integrates the Company's lab diagnostic
equipment, point of care technology and lab management system into
a vehicle equipped with an extensible treatment space. The vehicle
is to be provided by a separate supplier. The Company generated
total revenues of approximately $2.38 million during the quarter
ended March 31, 2012 from the rural hospitals and clinics sector,
an increase of 1657% compared to the quarter ended March 31, 2011,
which had total revenues of approximately $0.14 million. 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. The Company intends to continue its
growth 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, POCT solutions for military and emergency rescue services,
and food safety solutions for large cities in China. In 2011,
China Health increased its revenues by 35% to $45.6 million, and
increased its installed base of BK Clinlab total solution
diagnostic labs ("BK Clinlabs") from 210 at the start of 2011 to
833 rural hospitals. In addition, the Company grew revenues
from its overall total lab solutions business by 99% from 2010,
which increased gross margins to 44% in 2011 as compared to 39% in
2010. 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 the
installations to be delivered and revenues to be generated from the
installations, reagents and maintenance services, the completion of
the installations, the expansion of the Company's installed base in
the eight provinces and expansion to new provinces and the growth
of the Company's business through its sales network in areas where
it has proprietary products, limited competition and strong
government support. The forward-looking information is based
on certain assumptions, which could change materially in the
future, including the assumption that the Company will be able to
deliver the new installations, that payment for the installations,
reagents and maintenance services will be made and revenue
recognized, that the Company will have the resources and ability to
expand its installed base and expand to new provinces and that the
Company will be able to grow its sales network and business.
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 be able to deliver the outstanding installations as
scheduled or at all, the Company may not be able to generate the
expected revenue from its installations, reagents and maintenance
services as expected, the customers may not make payment on a
timely basis or at all upon installation, the Company may not have
the ability or resources to expand its installed base in the eight
provinces and to new provinces, and the Company may not be able to
grow 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. 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. 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 Equicom GroupT: (416) 815-0700 ext.
264Email: bpedram@equicomgroup.com
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