Navigation Links
Dehaier Medical Announces First Quarter 2011 Financial Results

BEIJING, May 4, 2011 /PRNewswire-Asia-FirstCall/ -- Dehaier Medical Systems Ltd. (Nasdaq: DHRM) ("Dehaier" or the "Company"), an emerging leader in the development, assembly, marketing and sale of medical devices and homecare medical products in China, today announced its financial results for the first quarter ended March 31, 2011.


First Quarter 2011 Financial Highlights

  • Revenue increased by 12% year-over-year to $2.95 million, up from $2.64 million in the first quarter of 2010.
  • Gross profit was $1.00 million, or 34% of revenue, compared with $0.97 million, or 37% of revenue in the first quarter of 2010.
  • Operating income and operating margin were $0.30 million and 10%, respectively, compared with $0.65 million and 25%, respectively, in the first quarter of 2010.
  • Net income attributable to the Company was $0.21 million, or $0.04 per diluted share based on 4.7 million weighted average shares outstanding, compared with net income of $0.52 million, or $0.17 per diluted share based on 3.0 million weighted average shares outstanding in the first quarter of 2010.
  • As of March 31, 2011 cash and cash equivalents were $3.37 million, working capital was $23.15 million, compared with $5.92 million and $22.62 million, respectively, as of December 31, 2010.

  • First Quarter 2011 and Recent Business Highlights

  • Signed cooperation agreement for rural healthcare construction project in Hunan and Anhui Provinces, which is sponsored by the China Development Bank.
  • Entered the home oxygen therapy service market in Beijing through a strategic cooperation agreement between Dehaier's wholly owned subsidiary and leading global and regional medical oxygen providers, Taiyo Nippon Sanso Shenwei (Shanghai) and Beijing Orient.
  • Broadened portfolio of agent products becoming a regional distributor of eVent Medical's Inspiration® ventilator in China.  
  • Expanded marketing through the introduction of one new Customer Experience Center (CEC) in Shenyang and began construction on four new CECs in Chinese provincial capital cities Beijing, Shanghai, Lanzhou and Xi'an.
  • Strengthened marketing team with key sales hires that hold significant industry experience and strong industry relationships within the medical device market.

  • "Despite the seasonally low first quarter as hospitals and government-sponsored organizations finalize their spending budgets for the year, we increased our sales by 12% from the same period last year. Primary drivers of our year-over-year top line gains included favorable market momentum, as well as increased sales of our medical device products and strong partnerships with third party brand names," said Mr. Ping Chen, CEO of Dehaier. "During the quarter, we made critical investments to build our infrastructure that best position our Company to capture the burgeoning market opportunity for both our medical device and homecare medical products. We continued to dedicate resources to R&D, introducing innovative products for the oxygen and respiratory homecare market, and established a seasoned marketing team to support our expansion initiatives. Although these efforts affected our bottom line in the first quarter, we believe these investments in our future will contribute to sales growth and bolster our profits in 2011 as we continue build on our solid base of customers in both the professional and homecare medical product markets."

    "To complement our established and growing medical device business and foster the growth of our homecare offering, we are beginning to utilize our CEC network to accelerate our sales, and increase our brand recognition among the domestic industry. With 13 centers currently open, four under construction and a goal to open a total of 32 CECs by the end of the year, we expect to establish a strong national presence, presenting us with a considerable first mover advantage as an integral part of the infrastructure for the emerging medical homecare business and a potential additional sales point for our devices for the professional market."

    "With our recent investments, partnerships, geographic expansion, new CEC centers and strategic growth initiatives in place, we believe we now have the infrastructure to accelerate our growth among China's developing healthcare industry that is driving demand for higher levels of medical care in both urban and rural areas. Our recent distribution agreement for regional distribution of eVent's inspiration ventilators, our strategic cooperation agreement with two major medical gas providers to distribute home oxygen therapy service in Beijing, and our two agreements to supply new rural healthcare projects sponsored by China Development Bank, bode well for our future growth as we continue to expand our geographic reach, build our brand equity and grow our business." Mr. Chen concluded.

    First Quarter 2011 Financial ResultsRevenuesRevenues for the three months ended March 31, 2011 were $2.95 million, compared with $2.64 million for the three months ended March 31, 2010, an increase of $0.31 million, or 12%. The increase in revenue was attributable to growth in sales of Dehaier's medical devices.

  • Sales of self-branded and third party medical devices, including technical service products, increased 21% to $2.7 million, or 93% of total revenue, compared with $2.3 million, or 86% of revenue in the same period a year ago. The sales increase of medical devices was primarily due to expansion of third-party-branded products offering.
  • Homecare products decreased to $0.21 million, or 7% of total revenue, compared with $0.37 million, or 14% of revenue in the first quarter of 2010. The decrease in sales from homecare products was primarily attributable to the discontinuation of our distributed homecare products to focus on its branded products. As the Company gains additional market traction and launches new branded products for the homecare market later this year, Dehaier expects its homecare product sales to increase.

  • Gross ProfitGross profit for the three months ended March 31, 2011 increased slightly to $1.00 million, compared with $0.97 million for the three months ended March 31, 2010. As a percentage of revenue, the Company's gross margin was 34% for the three months ended March 31, 2011, compared with 37% for the same period in 2010. The decrease in gross margin was primarily due to the increase of registration fees for new homecare products and renewal for existing products and fixed assets depreciation.

    Income from OperationsOperating income for the three months ended March 31, 2011 totaled $298,000, compared with $648,000 for the three months ended March 31, 2010.

    Operating expenses for the quarter totaled $0.74 million, an increase of 90%, compared with $0.39 million for the same period a year ago. The increase in operating expenses was largely attributable to a $0.28 million increase in general and administrative expense associated with being a publicly traded company, including costs of maintaining and enhancing our internal controls and other public company-related expenses, and associated with the build of five new CECs.

    Net IncomeNet income attributable to the Company for the three months ended March 31, 2011 was $0.21 million, compared with $0.52 million for the three months ended March 31, 2010. The decrease in net income was primarily due to increased operating expenses as the Company made investments in its infrastructure during the first quarter to support its expected growth. Earnings per diluted share was $0.04, based on 4.7 million shares outstanding for the quarter, compared with diluted EPS of $0.17, based on 3.0 million shares outstanding for the first quarter of 2010. The increase in share count was due to the completion of the Company's initial public offering in April 2010.

    Liquidity and Capital ResourcesAs of March 31, 2011, Dehaier had $3.37 million in cash and cash equivalents, compared with $5.92 million as of December 31, 2010. The decrease was primarily due to an increase in prepayments. Current assets totaled $33.90 million, with working capital of $23.15 million and total shareholders' equity of $26.26 million at March 31, 2011, respectively.

    Conference Call and WebcastManagement will host a conference call to discuss these financial results on Wednesday, May 4, 2011 at 8:00 a.m. EDT.

    To participate in the call please dial (877) 941-1429, or (480) 629-9666 for international calls, approximately 10 minutes prior to the scheduled start time. Interested parties can also listen via a live Internet webcast, which can be found via the Company's website at

    A replay of the call will be available approximately 2 hours after the conclusion of the live call, through May 18, 2011. The replay can be accessed by dialing 800-406-7325 in the U.S. and Canada, or 303-590-3030 internationally and entering the passcode: 4437089. In addition, a recording of the call will be available via the company's website at for one year.

    About Dehaier Medical Systems Ltd.Dehaier Medical Systems is an emerging leader in the development, assembly, marketing and sale of medical products in China, including respiratory and oxygen homecare medical products. The company develops and assembles its own branded medical devices and homecare medical products from third-party components. The company also distributes products designed and manufactured by other companies, including medical devices from IMD (Italy), Welch Allyn (USA), HEYER (Germany), Timesco (UK), ResMed (Australia), eVent Medical (US), JMS (Japan) and eVent. Dehaier's technology is based on two patents, six pending patents, and proprietary technology. More information may be found at

    Forward-looking StatementsThis news release contains forward-looking statements as defined by the Private Securities Litigation Reform Act of 1995. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements that are other than statements of historical facts. These statements are subject to uncertainties and risks including, but not limited to, product and service demand and acceptance, changes in technology, economic conditions, the impact of competition and pricing, government regulation, and other risks contained in reports filed by the company with the Securities and Exchange Commission. All such forward-looking statements, whether written or oral, and whether made by or on behalf of the company, are expressly qualified by the cautionary statements and any other cautionary statements which may accompany the forward-looking statements. In addition, the company disclaims any obligation to update any forward-looking statements to reflect events or circumstances after the date hereof.Contact UsIn the US:

    The Piacente Group, Inc.

    Investor Relations

    Brandi Floberg or Lee Roth


    dehaier@tpg-ir.comIn China:

    The Piacente Group, Inc.

    Investor Relations

    Wendy Sun


    dehaier@tpg-ir.comDehaier Medical Systems Limited

    Rita Liu


    +86-10-8844-5026 Liu

    Investor Relations Manager

    2011December 31,
    2010US$US$ASSETSCURRENT ASSETS:Cash and cash equivalents3,372,6735,923,386Accounts receivable-less allowance for doubtful accounts of $88,273 and $87,555 at March 31, 2011 and December 31, 2010, respectively9,864,9749,112,077Other receivables2,996,7163,164,423Prepayment and other current assets8,185,2585,300,825Inventories, net5,890,3346,374,363Tax receivable3,588,0883,518,919Total Current Assets33,898,04333,393,993Property and equipment, net3,416,4573,488,947Total Assets37,314,50036,882,940LIABILITIES AND SHAREHOLDERS' EQUITYCURRENT LIABILITIES:Short-term borrowings916,2241,514,620Accounts payable145,93529,318Advances from customers294,437269,189Accrued expenses and other current liabilities313,256330,601Tax payable8,775,3268,327,708Warranty obligation303,936301,464Due to officer-2,358Total Current Liabilities10,749,11410,775,258OTHER LIABILITIESWarrants liability308,583318,109Total Liabilities11,057,69711,093,367Commitments and ContingencyShareholders' equityCommon stock, $0.002731 par value, 18,307,038 shares authorized, 4,510,000 and 4,500,000 shares issued and outstanding at March 31, 2011 and December 31, 2010, respectively12,31712,290Additional paid in capital13,196,35813,137,085Retained earnings10,043,8669,838,452Accumulated other comprehensive income1,661,7351,474,455Total Dehaier Medical Systems Limited shareholders' equity24,914,27624,462,282Non-controlling interest1,342,5271,327,291Total shareholders' equity26,256,80325,789,573Total liabilities and shareholders' equity37,314,50036,882,940DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATECONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(UNAUDITED)For the three months ended
    March 31,20112010US$US$Revenue2,952,7062,641,089Costs of revenue(1,955,247)(1,666,718)Gross profit997,459974,371Service income84,83393,067Service expenses(40,697)(28,021)General and administrative expense(503,526)(223,385)Selling expense(239,701)(167,851)Operating Income298,368648,181Financial expenses (including interest expense of $16,177 and $18,828 at March 31, 2011 and December 31, 2010, respectively)(15,613)(19,326)Change in fair value of warrants liability9,526-Income before provision for income taxes and non-controlling interest292,281628,855Provision for income tax(82,537)(94,883)Net income209,744533,972Non-Controlling interest in income(4,330)(13,761)Net income attributable to Dehaier Medical Systems Limited205,414520,211Earnings per share-Basic0.050.17-Diluted0.040.17DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATECONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(UNAUDITED)For the three months ended
    March 31,20112010US$US$Cash flows from operating activitiesNet income209,744533,972Adjustments to reconcile net income to net cash provided by (used in) operating activitiesStock-based compensation expense59,300-Depreciation and amortization109,37385,750Change in fair value of warrants liability(9,526)-Changes in assets and liabilities:Increase in accounts receivable(752,897)(247,601)(Increase) Decrease in prepayments and other current assets(2,884,433)298,932Decrease (Increase) in other receivables167,707(125,708)Decrease (Increase) in inventories484,029(78,717)Increase in tax receivable(69,169)(184,590)Increase (Decrease) in accounts payable116,617(29,537)Increase (Decrease) in advances from customers25,248(9,298)(Decrease) Increase in accrued expenses and other current liabilities(17,345)38,611Increase in tax payable447,618382,174Net cash provided by (used in) operating activities(2,113,734)663,988Cash flows from investing activitiesCapital expenditures and other additions(8,274)(4,578)Advances to related parties(2,358)(3,861)Net cash used in investing activities(10,632)(8,439)Cash flows from financing activitiesRepayment of bank loan(610,816)(585,764)Net cash used in financing activities(610,816)(585,764)Effect of exchange rate fluctuations on cash and cash equivalents184,4691,427Net (decrease) increase in cash and cash equivalents(2,550,713)71,212Cash and cash equivalents at beginning of period5,923,3861,151,721Cash and cash equivalents at end of period3,372,6731,222,933Supplemental cash flow informationIncome tax paid4,5831,616Interest paid16,17718,828

    SOURCE Dehaier Medical Systems Ltd.
    Copyright©2010 PR Newswire.
    All rights reserved

    Related medicine technology :

    1. Dehaier Medical to Report First Quarter 2011 Financial Results on May 4
    2. Dehaier Medical Chairman and CEO Issues Letter to Shareholders
    3. Dehaier Medical Systems Signs New Distribution Agreement to Distribute eVent Medical Ventilators
    4. Dehaier Medical Announces Fourth Quarter and Full-Year 2010 Financial Results
    5. Dehaier Medical to Report Fourth Quarter and Full-Year 2010 Financial Results on March 7
    6. Dehaier Medical Announces March Investor Presentations
    7. Dehaier Medical Retains The Piacente Group as Strategic Investor Relations Consulting Firm
    8. Dehaier Medical Announces Participation in Arab Health 2011
    9. Dehaier Medical Announces Third Quarter 2010 Financial Results
    10. Dehaier Medical Announces Conference Call to Discuss Third Quarter 2010 Financial Results
    11. Dehaier Medical to Participate in MEDICA International Trade Fair
    Post Your Comments:
    (Date:11/26/2015)... , November 26, 2015 /PRNewswire/ ... announced the addition of the  "2016 ... the Global Cell Surface Testing Market: ... report to their offering.  --> ... addition of the  "2016 Future Horizons ...
    (Date:11/26/2015)... , November 26, 2015 /PRNewswire/ ... --> adds "Global ... and "Investigation Report on China Repaglinide ... 2021 forecasts data and information to ... . --> ...
    (Date:11/25/2015)... DUBLIN , Nov. 25, 2015 /PRNewswire/ ... announced the addition of the "Global ... to their offering. --> ... "Global Brain Monitoring Devices Market 2015-2019" ... Research and Markets ( ) ...
    Breaking Medicine Technology:
    (Date:11/27/2015)... , ... November 27, 2015 , ... MPWH, the No.1 Herpes-only dating community in the ... Table 1-1 ). More than 3.7 billion people under the age of 50 ... (HSV-1), according to WHO's first global estimates of HSV-1 infection . , "The data ...
    (Date:11/27/2015)... ... November 27, 2015 , ... A simply groundbreaking television series, "Voices ... show that delves into an array of issues that are presently affecting Americans. Dedicated ... open dialogue, this show is changing the subjects consumers focus on, one episode at ...
    (Date:11/27/2015)... Los Angeles, CA (PRWEB) , ... November 27, 2015 , ... ... the Commission on Accreditation of Allied Health Education Programs (CAAHEP) awarded accreditation to its ... exclusive list of CAAHEP accredited colleges, as only one of twelve colleges and universities ...
    (Date:11/27/2015)... ... November 27, 2015 , ... Avid collector, Andrew Hawley from Vintage ... style concert posters. This is one of Joplin's most famous and beautiful concert posters. ... University of Michigan in Ann Arbor. The According to Hawley, "It is hard to ...
    (Date:11/26/2015)... (PRWEB) , ... November 26, 2015 , ... Inevitably when ... Many customers choose to buy during the Black Friday and Cyber Monday ... don’t need to search the Internet high and low to find the best massage ...
    Breaking Medicine News(10 mins):