BEIJING, May 14 /PRNewswire-Asia-FirstCall/ -- Dehaier Medical Systems Ltd. (Nasdaq: DHRM), an emerging leader in the development, assembly, marketing and sale of medical products in China, today reported financial results for its first quarter 2010 ended March 31, 2010.
(Logo: http://www.newscom.com/cgi-bin/prnh/20100422/CNTH001LOGO ) Q1 2010 Highlights -- Revenue for the first quarter ended March 31, 2010 increased 5% to $2.6 million from $2.5 million in the same quarter a year ago reflecting the increased acceptance of the company's products among hospitals and other healthcare facilities. -- Gross profit increased 4% to $0.97 million for Q1 FY'10 from $0.94 million in Q1 FY'09. -- Gross margin for the first quarter ended March 31, 2010 remained constant at 37%, which is the same as that of the first quarter in 2009. -- Operating income rose 40.67% to $0.65 million in Q1 FY'10 compared with $0.46 million in Q1 FY'09 primarily due to the increase in revenues and a decrease in general and administrative expense. -- Net income attributable to Dehaier in the first quarter was $0.52 million, an increase of 54% from $0.34 million for the same period in 2009. -- Earnings per diluted share in Q1 FY'10 was $0.17, compared to $0.11 per diluted share in Q1 FY'09, due to the decrease in general and administrative expense.
Liquidity and Capital Resources
The company's cash balance on March 31, 2010 was approximately $1.22 million. On March 31, 2010 Dehaier had short-term debt of $879,006 consisting of a final loan payment to a bank, which is due on May 20, 2010. The company had no long-term debt. Working capital was $6.75 million. Stockholders' equity totaled $11.08 million. The current ratio was 1.96, up from 1.87 at December 31, 2009.
Chen Ping, Dehaier's Chief Executive Officer, said, "The first quarter of 2010 has been an exciting period for Dehaier Medical Systems as we prepared for our Initial Public Offering on Nasdaq of 1,500,000 ordinary shares. The IPO closed on April 22nd and the management team has been invited to ring the bell at Nasdaq in early July. We are looking forward to visiting New York and meeting with analysts and portfolio managers to tell the American investment community about Dehaier.
"For the three months ended March 31, 2010, our total revenues increased by approximately 5% to $2.64 million from $2.52 million for the first three months in the prior year. Many of our end users such as hospitals became repeat customers when they needed new medical equipment, demonstrating the increased acceptance of our products among hospitals and other healthcare facilities.
"To strengthen our market presence, we plan to open new Customer Experience Centers in China. These centers will give our potential customers an opportunity to experience our products first-hand in an environment that is similar to the environment in which they will use the products, whether that is a home or healthcare facility. We anticipate using a portion of the net proceeds of the IPO to expand our marketing efforts in order to continue to grow our revenues in China and internationally.
"Our selling expense decreased in both U.S. dollars and as a percentage of our total net revenues for the three months ended March 31, 2010, primarily due to decreased spending in expanding our distribution network built in 2009.
"In the near term we will be introducing new products to the market which we plan to promote through a variety of advertising methods," said Ping.
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 products. The company develops and assembles its own branded products from third party components. The company also distributes products designed and manufactured by other companies including medical devices and respiratory and oxygen homecare products from IMD (Italy), Timesco (UK), ResMed (Australia) and JMS (Japan). Dehaier's technology is based on two patents, five pending patents and proprietary technology. More information may be found at http://www.chinadhr.com .
Information for investors, including an investment profile about Dehaier is available at http://www.hawkassociates.com/profile/dhrm.cfm . An online investor kit including press releases, current price quotes, stock charts and other valuable information for investors is available at http://www.hawkassociates.com .
This 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.
For further information, please contact: Hawk Associates Julie Marshall or Frank Hawkins Tel: +1-305-451-1888 Email: email@example.com DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE CONDENSED CONSOLIDATED BALANCE SHEETS March 31, December 31, 2010 2009 US$ US$ (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents 1,222,933 1,151,721 Accounts receivable, less allowance for doubtful accounts of $ 102,956 and $ 102,939 7,138,891 6,891,291 Other receivables 1,624,819 1,499,111 Prepaid expenses and other current assets 1,392,455 1,691,387 Inventory, net 2,404,842 2,326,126 Total current assets 13,783,940 13,559,636 Property and equipment, net 2,781,904 2,862,625 Tax receivable 1,546,962 1,362,372 Total assets 18,112,806 17,784,633 LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Short-term borrowings 879,006 1,464,770 Accounts payable 64,233 93,770 Advances from customers 164,955 174,253 Accrued expenses and other current liabilities 375,023 336,412 Taxes payable 5,375,561 4,993,387 Warranty obligation 178,784 178,755 Due to officer -- 3,861 Total current liabilities 7,037,562 7,245,208 Commitments and contingency Shareholders' equity Common stock, $0.002731 par value, 18,307,038 shares authorized, 3,000,000 shares issued and outstanding 8,193 8,193 Additional paid-in capital 3,196,974 3,196,974 Retained earnings 5,818,953 5,298,742 Accumulated other comprehensive income 774,763 773,127 Total Dehaier Medical Systems Limited shareholders' equity 9,798,883 9,277,036 Non-controlling interest 1,276,361 1,262,389 Total shareholders' equity 11,075,244 10,539,425 Total liabilities and shareholders' equity 18,112,806 17,784,633 DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) For the three months ended March 31, 2010 2009 US$ US$ Revenue $2,641,089 $2,524,284 Cost of revenues (1,666,718) (1,587,488) Gross profit 974,371 936,796 Service income 93,067 99,235 Service expense (28,021) (37,268) General and administrative expense (223,385) (337,566) Selling expense (167,851) (200,429) Operating income 648,181 460,768 Financial expense (including interest expense of $ 18,828 and $28,365) (19,326) (28,956) Income before provision for income taxes and non-controlling interest 628,855 431,812 Provision for income taxes (94,883) (80,612) Net income 533,972 351,200 Non-controlling interest in income (13,761) (13,344) Net income attributable to Dehaier Medical Systems Limited $520,211 $337,856 Earnings per share -Basic 0.17 0.18 -Diluted 0.17 0.11 Weighted average number of common shares used in computation -Basic 3,000,000 1,891,930 -Diluted 3,000,000 3,000,000 DEHAIER MEDICAL SYSTEMS LIMITED AND AFFILIATE CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the three months ended March 31, 2010 2009 US$ US$ Operating Activities Net income $533,972 $351,200 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 85,750 69,758 Provision for inventory obsolescence -- 52,917 Provision for warranty -- 18,534 Changes in assets and liabilities: Increase in accounts receivable (247,601) (1,247,041) Decrease in prepayments and other current assets 298,932 633,009 Increase in other receivables (125,708) (100,682) Increase in inventory (78,717) (106,480) Increase in tax receivable (184,590) (152,567) (Decrease) increase in accounts payable (29,537) 293,340 (Decrease) increase in advances from customers (9,298) 48,822 Increase in accrued expenses and other current liabilities 38,611 2,890 Increase in tax payable 382,174 331,251 Net cash provided by operating activities $663,988 $194,951 Investing Activities Capital expenditures and other additions $(4,578) $(4,410) Advance to related parties (3,861) (969) Net cash used in investing activities $(8,439) $(5,379) Financing Activities Repayment of Bank loan $(585,764) $(295,060) Net cash used in financing activities $(585,764) $(295,060) Effect of exchange rate fluctuations on cash and cash equivalents 1,427 (8,830) Net increase (decrease) in cash and cash equivalents 71,212 (114,318) Cash and cash equivalents at beginning of period 1,151,721 282,603 Cash and cash equivalents at end of period $1,222,933 $168,285 Supplemental cash flow information Income tax paid $1,616 $160 Interest paid $18,828 $28,365
|SOURCE Dehaier Medical Systems Ltd.|
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