Chindex International Inc. (CHDX, Financial) filed Quarterly Report for the period ended 2009-06-30.
Chindex International Inc. is a leading American company in the healthcare sectors of the Chinese marketplace including Hong Kong. Founded in 1981 the Company has accumulated unique executive management expertise in China trade and a dominant competitive position in its healthcare market sectors. Chindex International Inc. has a market cap of $176.89 million; its shares were traded at around $13.15 with a P/E ratio of 29.22 and P/S ratio of 1.03.
For the three months ended June 30, 2009, revenue from the division was $22,048,000, an increase of 13% over the three months ended June 30, 2008 revenue of $19,572,000. (for information on how the timing of our revenues may be affected by seasonality and other fluctuations, see Timing of Revenues). The increased revenue is attributable to growth in both inpatient and outpatient services provided in the Beijing and Shanghai markets, and increased patient revenues in the Guangzhou market. Total Healthcare Services operating costs increased over the periods by 7%, to $17,923,000 from $16,797,000. Salaries for the division increased by $1,137,000 over the periods (representing 46% of division revenue in the recent period and prior period). This increase was due to the expiration and renewal of multi-year physician contracts in an inflationary environment and the hiring of new personnel to meet the demand for expected continuing increases in services in both the Beijing and Shanghai facilities, as well as staffing for the Guangzhou clinic, which opened in October 2008. Other operating costs decreased $10,000 over the periods.
Expenses for the Medical Products division increased 18% to $5,571,000 from $4,736,000 over the periods. Salary expense for the division increased by $921,000 over the periods due to increased staff levels to support higher revenues. The other costs for the division decreased $105,000 over the periods, primarily due to decreased selling expenses ($168,000). The division had income from operations before foreign exchange gains of $243,000 in the recent period, compared with loss from operations before foreign exchange gains of $2,136,000 in the prior period. In the current period, the impact of exchange rate fluctuations between the periods had a negative impact on income from operations of approximately $47,000.
On November 7, 2007, we entered into a securities purchase agreement with Magenta Magic Limited, a wholly owned subsidiary of J.P. Morgan Chase & Co (JPM), pursuant to which we sold to JPM: (i) 538,793 shares (the Tranche A Shares) of common stock for an aggregate purchase price of $10 million or the subscription price of $18.56 per share, (ii) our Tranche B Convertible Notes due 2017 in the aggregate principal amount of $25 million, which were converted into 1,346,984 shares of our common stock, and (iii) our Tranche C Convertible Notes due 2017 in the aggregate principal amount of $15 million (the Tranche C Notes) for a total purchase price of $50 million in gross proceeds. The Tranche C Notes have a ten-year maturity, do not bear interest of any kind and are convertible to common stock at the subscription price at any time by JPM or are mandatorily converted at the subscription price to common stock upon certain project-related events.
We have an agreement with a major vendor whereby the vendor has agreed to provide up to $4,000,000 of long-term (one and one-half years on those transactions that have occurred to date) payment terms on our purchase of certain medical equipment from the vendor under government backed financing program contracts. The arrangement carries an interest component of five percent per annum. As of June 30, 2009, the Company had an outstanding long-term debt of $204,000 and $2,791,000 outstanding on short-term debt under this agreement. At March 31, 2009, the Company had an outstanding long-term debt balance of $1,377,000 and $1,568,000 outstanding on short-term debt under this agreement.
In our three operating markets of Beijing, Shanghai and Guangzhou, our Healthcare Services division plans capital expenditures of approximately $2.0 million for maintenance, $2.0 million for development of in existing facilities and $2.0 million for implementation of a new healthcare information system platform. In addition, the expansion project in the Beijing market is planned for capital expenditures of approximately $20.0 million for construction and equipment. These expansions will be funded through corporate capital reserves, cash flow from operations and limited short-term vendor financing arrangements.
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Chindex International Inc. is a leading American company in the healthcare sectors of the Chinese marketplace including Hong Kong. Founded in 1981 the Company has accumulated unique executive management expertise in China trade and a dominant competitive position in its healthcare market sectors. Chindex International Inc. has a market cap of $176.89 million; its shares were traded at around $13.15 with a P/E ratio of 29.22 and P/S ratio of 1.03.
Highlight of Business Operations:
Our revenue for the three months ended June 30, 2009 was $45,331,000, up 41% from the three months ended June 30, 2008 revenue of $32,068,000. We experienced an increase in revenue over the periods of 13% in the Healthcare Services division and an increase in revenue of 86% in the Medical Products division. Costs and expenses were $40,057,000 for the three months ended June 30, 2009 as compared with $31,315,000 for the prior period. Healthcare Services division operating costs increased 7% over the periods and operating costs in the Medical Products division increased by 57%. We recorded income from operations of $5,274,000 for the recent quarter, as compared to income from operations of $753,000 for the same quarter last year. We recorded net income of $3,253,000 for the recent quarter, as compared to net loss of $161,000 for the same quarter last year. Costs at the parent level of the Company, which have been allocated among the divisions as described below, decreased $558,000 between the periods, due to increased foreign exchange gains ($792,000) primarily resulting from Euro:USD transactions which offset higher expenses for professional fees ($169,000).For the three months ended June 30, 2009, revenue from the division was $22,048,000, an increase of 13% over the three months ended June 30, 2008 revenue of $19,572,000. (for information on how the timing of our revenues may be affected by seasonality and other fluctuations, see Timing of Revenues). The increased revenue is attributable to growth in both inpatient and outpatient services provided in the Beijing and Shanghai markets, and increased patient revenues in the Guangzhou market. Total Healthcare Services operating costs increased over the periods by 7%, to $17,923,000 from $16,797,000. Salaries for the division increased by $1,137,000 over the periods (representing 46% of division revenue in the recent period and prior period). This increase was due to the expiration and renewal of multi-year physician contracts in an inflationary environment and the hiring of new personnel to meet the demand for expected continuing increases in services in both the Beijing and Shanghai facilities, as well as staffing for the Guangzhou clinic, which opened in October 2008. Other operating costs decreased $10,000 over the periods.
Expenses for the Medical Products division increased 18% to $5,571,000 from $4,736,000 over the periods. Salary expense for the division increased by $921,000 over the periods due to increased staff levels to support higher revenues. The other costs for the division decreased $105,000 over the periods, primarily due to decreased selling expenses ($168,000). The division had income from operations before foreign exchange gains of $243,000 in the recent period, compared with loss from operations before foreign exchange gains of $2,136,000 in the prior period. In the current period, the impact of exchange rate fluctuations between the periods had a negative impact on income from operations of approximately $47,000.
On November 7, 2007, we entered into a securities purchase agreement with Magenta Magic Limited, a wholly owned subsidiary of J.P. Morgan Chase & Co (JPM), pursuant to which we sold to JPM: (i) 538,793 shares (the Tranche A Shares) of common stock for an aggregate purchase price of $10 million or the subscription price of $18.56 per share, (ii) our Tranche B Convertible Notes due 2017 in the aggregate principal amount of $25 million, which were converted into 1,346,984 shares of our common stock, and (iii) our Tranche C Convertible Notes due 2017 in the aggregate principal amount of $15 million (the Tranche C Notes) for a total purchase price of $50 million in gross proceeds. The Tranche C Notes have a ten-year maturity, do not bear interest of any kind and are convertible to common stock at the subscription price at any time by JPM or are mandatorily converted at the subscription price to common stock upon certain project-related events.
We have an agreement with a major vendor whereby the vendor has agreed to provide up to $4,000,000 of long-term (one and one-half years on those transactions that have occurred to date) payment terms on our purchase of certain medical equipment from the vendor under government backed financing program contracts. The arrangement carries an interest component of five percent per annum. As of June 30, 2009, the Company had an outstanding long-term debt of $204,000 and $2,791,000 outstanding on short-term debt under this agreement. At March 31, 2009, the Company had an outstanding long-term debt balance of $1,377,000 and $1,568,000 outstanding on short-term debt under this agreement.
In our three operating markets of Beijing, Shanghai and Guangzhou, our Healthcare Services division plans capital expenditures of approximately $2.0 million for maintenance, $2.0 million for development of in existing facilities and $2.0 million for implementation of a new healthcare information system platform. In addition, the expansion project in the Beijing market is planned for capital expenditures of approximately $20.0 million for construction and equipment. These expansions will be funded through corporate capital reserves, cash flow from operations and limited short-term vendor financing arrangements.
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