China Medical Technologies Reports FY2008 Fourth Fiscal Quarter and Full Year Unaudited Financi...(alyzers by hospitals as wellas the expan...),Health

FISH system sales for 4Q FY2008 were RMB109.6 million (US$16.0 million), representing a 59.3% increase from the corresponding period of FY2007. The strong year-over-year growth in the FISH system sales was primarily due to significant increase in sales of FISH probes to hospitals as a result of increase in new hospital customers and the increased usage of the Company's FISH probes by existing hospital customers.

Gross margin increased to 75.8% for 4Q FY2008 from 58.6% for the corresponding period of FY2007. The increase in gross margin was primarily due to the change in revenue mix where almost all revenues were generated from recurring sales of higher margin ECLIA reagent kits and FISH probes in 4Q FY2008.

Research and development expenses were RMB10.7 million (US$1.6 million) for 4Q FY2008, representing a 70.4% year-over-year increase. The increase was primarily due to the development of new ECLIA reagent kits and FISH probes.

Sales and marketing expenses were RMB13.6 million (US$2.0 million) for 4Q FY2008, representing a 97.4% year-over-year increase. The increase was primarily due to the continued expansion of the direct sales force for FISH system sales, increased product promotional activities as well as cost of the ECLIA analyzers provided free of charge to customers.

General and administrative expenses were RMB48.1 million (US$7.0 million) for 4Q FY2008, representing a significant year-over-year increase. The increase was primarily due to the increased headcount associated with the expansion of the Company's operations, an increase in stock compensation expense arising from a restricted stock grant in June 2008 and amortization of acquired intangible assets in connection with the acquisition of the SPR technology in December 2008.
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