Dynacq Healthcare Inc. (DYII) filed Annual Report for the period ended 2009-08-31.
Dynacq Healthcare, Inc. is a holding company. Its subsidiaries provide surgical healthcare services and related ancillary services through hospital facilities and outpatient surgical centers. Dynacq Healthcare Inc. has a market cap of $54.6 million; its shares were traded at around $3.53 with and P/S ratio of 0.9.
Highlight of Business Operations:
During the fiscal year ended August 31, 2009, the Company invested approximately $9.1 million of its available cash in marketable securities. As of August 31, 2009, these securities are valued at approximately $18.6 million. The Company intends to hold and manage these investment securities until it is able to identify and fund attractive opportunities to acquire or manage operating companies in China and Southeast Asia.
Our China Division is set up to provide healthcare management services in China. Effective March 1, 2009, Dynacq-Huai Bei began managing the Second People’s Hospital in Rui An, China. Dynacq-Huai Bei is ultimately responsible for funding any operating deficits, and is to be rewarded with any operating profits, of that hospital during the management period. For the year ended August 31, 2009, Second People’s Hospital had net patient service revenues of approximately $1.8 million and a net operating loss of approximately $2.6 million. For the right to manage the Second People’s Hospital, Dynacq-Huai Bei paid approximately $2.5 million, which was written off at August 31, 2009. Although we believe Dynacq-Huai Bei has the potential to realize profits from the operation of Second People’s Hospital, the current determination for accounting purposes is that the Company’s investment in this hospital may not be recoverable because of projections that it will likely incur a loss for the period of the management of the hospital. Management believes that profitability in the management of Second People's Hospital is possible through recruitment of additional surgeons, particularly obstetrical and gynecological specialists, and an increase in patient volume and greater efficiencies in management of the hospital.
Dynacq-Huai Bei and Rui An City Department of Health have entered into an agreement assigning Dynacq-Huai Bei the right to manage the operations, human resources and financials of the Third People’s Hospital in Rui An when the new hospital currently under construction is completed and operational. Dynacq-Huai Bei is currently overseeing the construction of that hospital which is expected to be completed in 2010. Upon completion of the new hospital, Dynacq-Huai Bei will manage the facility, and all profits, liabilities, operating deficits, and legal disputes of the hospital will be assumed by Dynacq-Huai Bei. Dynacq-Huai Bei has agreed to assume and discharge within ten years $883,000 of existing liabilities, of which $736,000 was paid in fiscal year ended August 31, 2008, and $111,000 was paid in the fiscal year ended August 31, 2009, and to loan to the city of Rui An $2.1 million for the construction costs of the hospital building and up to $730,000 for equipment purchases. At the expiration of the 15 year term, the city of Rui An will compensate Dynacq-Huai Bei for: (1) any increase in appraised value of the hospital assets (excluding the real estate), (2) the appraised value of all medical supplies and equipment purchased by Dynacq-Huai Bei with a unit cost less than $74,626, and (3) the appraised value of all medical supplies and
Rate This Article: |
  |