China Health Labs & Diagnostics Ltd. enters agreement to install 12 BK Clinlabs in Tibet
June 13 2012 - 8:00AM
PR Newswire (Canada)
TSX-V: CHO OTCQX: CHLBF www.chinahealthlabs.com TORONTO,
June 13, 2012 /CNW/ - China Health Labs & Diagnostics Ltd.
("China Health" or the "Company") , is pleased to announce that it
has entered into an agreement to install 12 rural diagnostic lab
total solutions ("BK Clinlabs") in the Tibet Autonomous Region
("Tibet"), which is expected to generate approximately $150,000
(RMB 936,000) in revenues. This agreement increases the
Company's network to 977 BK Clinlabs installed or contracted for
installation in nine provinces and territories of China, compared
to 210 locations in three provinces at the beginning of 2011. The
12 BK Clinlabs are being purchased by the Jilin Department of
Health ("JDH") and donated to Tibet. This new agreement with
the JDH is in addition to recently announced agreement with JDH to
install 59 BK Clinlabs in Jilin Province (see press release dated
May 29, 2012). 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. To date in 2012, China Health has installed 74 BK Clinlabs,
bringing the installed base to 891 labs, with another 86 labs under
contract to be installed in 2012. The installed base includes
21 BK Clinlabs in Qinghai Province, 44 BK Clinlabs in Chongqing,
eight BK Clinlabs in Hebei Province, and one in Xinjiang Province,
all completed in 2012. The contract to install 8 BK Clinlabs in
Hebei Province in return for a five-year contract to provide
testing reagents and maintenance services is expected to generate
revenues of at least $0.29 million (RMB 1.79 million). The
terms under the agreement with Hebei Province are similar to the
agreement signed with the Wanzhou district Department of Health in
Chongqing during the fourth quarter of fiscal year 2011, under
which the Company installed 44 BK Clinlabs. The 44 Chongqing
BK Clinlabs were installed under a new business model, whereby the
Company installed the BK Clinlabs in return for a five-year
contract to provide testing reagents and maintenance services that
is expected to generate revenues of at least $2.85 million (RMB
17.7 million). The Hebei and Chongqing agreements are
expected to generate higher total and recurring revenues over the
five-year agreements compared to BK Clinlabs installed under
agreements where the customer pays for the labs upon completion of
the installation. "We are very pleased to work with the Jilin
Department of Health to bring our total diagnostic lab solution to
Tibet. This agreement helps deliver better healthcare to a
rural area of Tibet, enhances our relationship with our largest BK
Clinlab customer and adds value to our brand in China," said Wilson
Yao, CEO of China Health. "We are off to a good start in 2012
with our diagnostic lab network expanding to nine provinces in
China. 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." 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 defense 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 891 rural hospitals to date. 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 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, the revenues to be generated from
the installations and the reagents and maintenance services, the
higher revenues to be generated from the Hebei and Chongqing
services agreements as compared to the installation agreements, the
expansion of the Company's installed base, 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 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 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 new
installations, the Company may not be able to generate the expected
revenue from the new installations, reagents and maintenance
services as expected, 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, 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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