Concord Medical Reports Financial Results for the First Quarter of 2016
First Quarter 2016 Highlights
- Total net revenues were
RMB125.0 million ($19.4 million ) in the first quarter of 2016, a 17.1% decrease from net revenues from the network business ofRMB150.7 million in the first quarter of 2015. Total net revenues include net revenue from the network business ofRMB121.6 million ($18.9 million ) and net revenue fromConcord Cancer Hospital ofRMB3.4 million ($0.5 million ). - Gross profit was
RMB45.4 million ($7.0 million ), representing a 39.0% decrease fromRMB74.4 million in the first quarter of 2015. The gross profit margin for the first quarter of 2016 was 36.3%, compared to 49.4% for the first quarter of 2015. - Net loss attributable to ordinary shareholders for the first quarter of 2016 was
RMB32.2 million ($5.0 million ), compared to net income ofRMB28.5 million for the first quarter of 2015. - Basic and diluted loss per American Depositary Share ("ADS")[2] in the first quarter of 2016 were
RMB0.73 ($0.11) andRMB0.73 ($0.11) , respectively, compared to basic and diluted profit per ADS ofRMB0.68 andRMB0.68 , respectively, in the first quarter of 2015. - Non-GAAP net loss for the first quarter of 2016 was
RMB30.2 million ($4.7 million ), compared to non-GAAP net income ofRMB30.5 million for the first quarter of 2015. Non-GAAP basic and diluted loss per ADS in the first quarter of 2016 wasRMB0.67 ($0.11) andRMB0.67 ($0.11) , respectively. - Adjusted EBITDA[3] (non-GAAP) was
RMB31.0 million ($4.8 million ) for the first quarter of 2016, representing a 55.0% decrease fromRMB68.8 million in the first quarter of 2015.
Dr.
"Also, we have accelerated the pace to open and operate our Meizhongjiahe network of specialty cancer hospitals. The first cancer hospital under the Meizhongjiahe brand,
"Since receiving approvals from the government in
"It is an important step for our broad strategy of building a nationwide free-standing cancer treatment and diagnosis centers chain under the brand 'Meizhongjiahe.' Our next step is to expand the Meizhongjiahe network by establishing specialty cancer hospitals in cities such as Wuxi,
2016 First Quarter Financial Results
Network Business
Net revenues from the network business were
Cost of revenue of the network business was
Gross profit from the network business was
Selling expenses of the network business were
General and administrative expenses of the network business were
Capital expenditures were
Accounts receivable was
As of
During the first quarter of 2016, the Company handled 5,093 patient treatment cases and 67,377 patient diagnostic cases, representing a 23.9% decrease and a 8.6% decrease from the first quarter of 2015, respectively, mainly due to the closure of certain cooperative centers in 2015.
Hospital Business
Net revenues from the hospital business were
Cost of service of the hospital business for the first quarter of 2016 was
Gross loss from the hospital business was
Selling expenses of the hospital business were
General and administrative expenses of the hospital business were
Capital expenditures of the hospital were
As of
Recent Developments
Share Repurchase Program - On
Acquisition of
Preliminary opening of Datong Meizhongjiahe Cancer Hospital - On
Notes:
[1] |
This announcement contains translations of certain RMB amounts into U.S. dollars at specified rates solely for the convenience of the reader. Unless otherwise noted, all translations from RMB to U.S. dollars are made at a rate of RMB6.4480 to $1.00, the effective noon buying rate as of March 31, 2016 in the City of New York for cable transfers of RMB as certified for customs purposes by the Federal Reserve Bank of New York. |
[2] |
Each ADS represents three ordinary shares of the Company. |
[3] |
Definition of adjusted EBITDA: Adjusted EBITDA is defined as net income plus interest, taxes, depreciation and amortization, share-based compensation expenses, bad debt provision, and other adjustments. Other adjustments include foreign exchange gain (loss), loss from disposal of property, plant and equipment, changes in fair value of derivative, and other income or expense. |
[4] |
The financial results of Concord Cancer Hospital were consolidated into our financial results starting in the second quarter of 2015. |
[5] |
Translation of Singapore dollar amount into U.S. dollar amount is made at a rate of SGD1.3462 to $1.00, the effective noon buying rate as of March 31, 2016, as set forth in the H.10 statistical release of the U.S. Federal Reserve Board. |
Conference Call Information
Dial-in details for the earnings conference call are as follows:
U.S. Toll Free: |
1 866 519 4004 |
International: |
65 67135090 |
U.K. Toll Free: |
08082346646 |
Hong Kong Toll Free: |
800906601 |
China Local: |
400-620-8038/800-819-0121 |
Passcode: |
CCM |
A replay of the conference call may be accessed by phone at the following numbers for 7 days:
U.S. Toll Free: |
1 855 452 5696 |
International: |
61 2 8199 0299 |
Conference ID: |
9744147 |
Additionally, a live and archived webcast of this conference call will be available at http://ir.concordmedical.com/.
About
Safe Harbor Statement
This news release may contain "forward-looking" statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as "anticipate," "believe," "estimate," "expect," "forecast," "intend," "may," "plan," "project," "predict," "should" and "will" and similar expressions. These forward looking statements are based upon management's current views and expectations with respect to future events and are not a guarantee of future performance. Furthermore, these statements are by their nature, subject to a number of risks and uncertainties that could cause actual performance and results to differ materially from those discussed in the forward-looking statements as a result of a number of factors. Such factors include: the number of new radiotherapy and diagnostic imaging centers opened; the increase in the number of patients in existing centers; the establishment of specialty cancer hospitals; changes in the healthcare industry in
About Non-GAAP Financial Measures
To supplement the consolidated financial statements presented in accordance with United States Generally Accepted Accounting Principles ("GAAP"),
For more information, please contact:
Mr.
+86 10 5957 5266
adam.sun@concordmedical.com
Ms. Fang Liu (Chinese and English)
+86 10 5903 6688 (ext. 639)
fang.liu@concordmedical.com
Concord Medical Services Holdings Co., Ltd. |
|||||
Consolidated Balance Sheets |
|||||
(in thousands) |
|||||
December 31, 2015 (*) |
March 31, 2016 |
||||
RMB |
RMB |
US$ |
|||
(Unaudited) |
(Unaudited) |
||||
ASSETS |
|||||
Current assets |
|||||
Cash and cash equivalents |
485,440 |
181,287 |
28,115 |
||
Restricted cash, current portion |
555,035 |
824,033 |
127,797 |
||
Short term investment |
60,000 |
- |
- |
||
Accounts receivable |
218,254 |
207,329 |
32,154 |
||
Inventories |
3,897 |
3,596 |
558 |
||
Prepayments and other current assets |
76,966 |
116,051 |
17,998 |
||
Net investments in direct financing leases, current portion |
100,988 |
94,221 |
14,612 |
||
Deferred tax assets, current portion |
2,447 |
3,147 |
488 |
||
Total current assets |
1,503,027 |
1,429,664 |
221,722 |
||
Non-current assets |
|||||
Property, plant and equipment, net |
918,815 |
967,187 |
149,998 |
||
Intangible assets, net |
43,453 |
44,277 |
6,867 |
||
Deposits for non-current assets |
251,058 |
198,344 |
30,761 |
||
Net investments in direct financing leases, non-current portion |
108,917 |
91,507 |
14,192 |
||
Deferred tax assets, non-current portion |
29,069 |
32,084 |
4,976 |
||
Equity method investments |
230,981 |
208,118 |
32,276 |
||
Cost method investments |
22,160 |
22,160 |
3,437 |
||
Other non-current assets |
54,719 |
55,280 |
8,573 |
||
Prepaid land lease payments |
429,779 |
429,508 |
66,611 |
||
Total non-current assets |
2,088,951 |
2,048,465 |
317,691 |
||
Total assets |
3,591,978 |
3,478,129 |
539,413 |
||
LIABILITIES AND EQUITY |
|||||
Current liabilities |
|||||
Short-term bank borrowings |
565,994 |
892,141 |
138,359 |
||
Long-term bank borrowings, current portion |
350,786 |
262,267 |
40,674 |
||
Accounts payable |
808 |
1,994 |
309 |
||
Accrual for purchase of property, plant and equipment |
4,881 |
4,400 |
682 |
||
Accrued expenses and other liabilities |
227,840 |
252,944 |
39,228 |
||
Income tax payable |
67,258 |
23,651 |
3,668 |
||
Deferred revenue, current portion |
1,522 |
1,741 |
270 |
||
Dividend payable |
288,157 |
4,655 |
722 |
||
Deferred tax liabilities, current portion |
2,249 |
2,146 |
333 |
||
Total current liabilities |
1,509,495 |
1,445,939 |
224,245 |
||
Non-current liabilities |
|||||
Long-term bank borrowings, non-current portion |
270,654 |
248,249 |
38,500 |
||
Deferred tax liabilities, non-current portion |
48,513 |
53,937 |
8,365 |
||
Long-term secured borrowings |
326,487 |
328,216 |
50,902 |
||
Other long term liabilities |
3,042 |
2,945 |
457 |
||
Total non-current liabilities |
648,696 |
633,347 |
98,224 |
||
Total liabilities |
2,158,190 |
2,079,286 |
322,469 |
||
EQUITY |
|||||
Ordinary shares |
105 |
105 |
16 |
||
Treasury stock |
(6) |
(7) |
(1) |
||
Additional paid-in capital |
1,774,330 |
1,758,754 |
272,760 |
||
Accumulated other comprehensive loss |
(46,574) |
(33,267) |
(5,159) |
||
Accumulated deficit |
(336,329) |
(368,489) |
(57,146) |
||
Total Concord Medical Services Holdings Limited shareholders' equity |
1,391,526 |
1,357,096 |
210,470 |
||
Non-controlling interests |
42,262 |
41,747 |
6,474 |
||
Total equity |
1,433,788 |
1,398,843 |
216,944 |
||
Total liabilities and equity |
3,591,978 |
3,478,129 |
539,413 |
||
(*) Amounts for the year ended December 31, 2015 were derived from the December 31, 2015 audited consolidated financial statements while certain |
Concord Medical Services Holdings Co., Ltd. |
|||||
Consolidated Profit & Loss |
|||||
(in thousands, except per ADS data) |
|||||
For The Three Months Ended |
|||||
March 31, 2015 |
March 31, 2016 |
||||
RMB |
RMB |
US$ |
|||
(Unaudited) |
(Unaudited) |
(Unaudited) |
|||
Revenues, net of business tax , value-added tax and related surcharges: |
|||||
Network |
150,692 |
121,618 |
18,861 |
||
Hospital |
- |
3,385 |
525 |
||
Total net revenues |
150,692 |
125,003 |
19,386 |
||
Cost of revenues: |
|||||
Network |
(76,317) |
(72,371) |
(11,223) |
||
Hospital |
- |
(7,206) |
(1,118) |
||
Total cost of revenues |
(76,317) |
(79,577) |
(12,341) |
||
Gross profit |
74,375 |
45,426 |
7,045 |
||
Operating expenses: |
|||||
Selling expenses |
(25,909) |
(18,400) |
(2,854) |
||
General and administrative expenses |
(21,430) |
(41,767) |
(6,477) |
||
Operating income (loss) |
27,036 |
(14,741) |
(2,286) |
||
Interest expense |
(12,038) |
(21,107) |
(3,273) |
||
Foreign exchange loss |
(2,004) |
(2,617) |
(406) |
||
Interest income |
6,279 |
7,396 |
1,147 |
||
Changes in fair value of derivatives |
- |
(2,115) |
(328) |
||
Equity pick up of equity investee |
2,719 |
5,041 |
782 |
||
Other (expense) income |
(136) |
1,411 |
219 |
||
Income (loss) before income tax |
21,856 |
(26,732) |
(4,145) |
||
Income tax expenses |
6,634 |
(5,943) |
(922) |
||
Net income (loss) |
28,490 |
(32,675) |
(5,067) |
||
Net loss attributable to non-controlling interests |
(34) |
(515) |
(80) |
||
Net income (loss) attributable to ordinary shareholders |
28,524 |
(32,160) |
(4,987) |
||
Earnings (loss) per ADS |
|||||
Basic |
0.68 |
(0.73) |
(0.11) |
||
Diluted |
0.68 |
(0.73) |
(0.11) |
||
Weighted average number of ADS outstanding: |
|||||
Basic |
44,945,433 |
43,974,455 |
43,974,455 |
||
Diluted |
45,114,976 |
43,974,455 |
43,974,455 |
||
Other comprehensive income, net of tax |
|||||
Foreign currency translation |
1,953 |
13,307 |
2,064 |
||
Total other comprehensive income, net of tax |
1,953 |
13,307 |
2,064 |
||
Comprehensive income (loss) |
30,443 |
(19,368) |
(3,003) |
||
Comprehensive loss attributable to noncontrolling interests |
(34) |
(194) |
(30) |
||
Comprehensive income (loss) attributable to Concord Medical |
30,477 |
(19,174) |
(2,973) |
||
Reconciliations of non-GAAP results of operations measures |
|||||||
For the three months ended |
For the three months ended |
||||||
March 31, 2015 |
March 31, 2016 |
||||||
GAAP |
Adjustment |
Non-GAAP |
GAAP |
Adjustment |
Non-GAAP |
||
Operating income (loss) |
27,036 |
1,995 |
29,031 |
(14,741) |
2,454 |
(12,287) |
|
Net income (loss) |
28,490 |
1,995 |
30,485 |
(32,675) |
2,454 |
(30,221) |
|
Basic earnings (loss) per ADS |
0.68 |
0.04 |
0.72 |
(0.73) |
0.06 |
(0.67) |
|
Diluted earnings (loss) per ADS |
0.68 |
0.04 |
0.72 |
(0.73) |
0.06 |
(0.67) |
|
(*) The adjustments include share-based compensation and bad debt provision. |
Reconciliation from net income to adjusted EBITDA (*) |
|||
For the three months ended |
For the three months ended |
||
March 31, 2015 |
March 31, 2016 |
||
Net income |
28,490 |
(32,675) |
|
Interest expenses, net |
5,759 |
13,711 |
|
Income tax expenses |
(6,634) |
5,943 |
|
Depreciation and amortization |
37,076 |
38,204 |
|
Share-based compensation |
1,995 |
2,069 |
|
Bad debt provision |
- |
385 |
|
Other adjustments |
2,140 |
3,321 |
|
Adjusted EBITDA |
68,826 |
30,958 |
|
(*) Definition of adjusted EBITDA: Adjusted EBITDA is defined as net income plus interest, taxes, depreciation and amortization, share-based compensation expenses, bad debt provision and other adjustments. Other adjustments include foreign exchange gain,(loss) on extinguishment, changes in fair value of derivatives and other income or expense. |
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