SHENZHEN, China, Aug. 5, 2013 /PRNewswire/ -- Mindray Medical International Limited (NYSE: MR), a leading developer, manufacturer and marketer of medical devices worldwide, announced today its selected unaudited financial results for the second quarter ended June 30, 2013.Highlights for Second Quarter 2013
"In the second quarter, our strong China sales continued to drive our top-line performance and we are pleased that our sales in the emerging markets improved sequentially. Western Europe revenues remained solid despite the region's economic weakness. Sales in North America were weak this quarter, primarily as a result of tough comparison over last year," said Mr. Li Xiting, Mindray's President and Co-Chief Executive Officer. "We further enhanced our efficiency with better management of our cash conversion cycle. We are also very excited about our recent acquisition of ZONARE, which greatly strengthened our ultrasound R&D capabilities and expanded our high-end product portfolio."SUMMARY – Second quarter 2013(in $ millions, except per-share data)
Three Months EndedJune 302013
% chgNet Revenues
14.7%Net Revenues Generated in China
27.9%Net Revenues Generated in International Markets
14.9%Non-GAAP Gross Profit
19.4%Non-GAAP Operating Income
19.3%Non-GAAP Net Income
17.9%Non-GAAP Diluted EPS
13.4%Net RevenuesMindray reported net revenues of $307.2 million for the second quarter of 2013, a 14.7% increase from $267.8 million in the second quarter of 2012.
Performance by SegmentPatient Monitoring & Life Support Products: Net revenues in this segment increased 2.3% to $117.2 million from $114.6 million in the second quarter of 2012, contributing 38.2% to total net revenues in the second quarter of 2013.
In-Vitro Diagnostic Products: Net revenues in this segment increased 19.5% to $88.3 million from $73.9 million in the second quarter of 2012, contributing 28.7% to total net revenues in the second quarter of 2013. Reagents sales represented 36.6% of this segment's net revenues.
Medical Imaging Systems: Net revenues in this segment increased 18.6% to $76.1 million from $64.1 million in the second quarter of 2012, contributing 24.8% to total net revenues in the second quarter of 2013.
Others: Net revenues increased 68.7% to $25.5 million from $15.1 million in the second quarter of 2012, contributing 8.3% to total net revenues in the second quarter of 2013. Other net revenues mainly include sales from the orthopedics business, service revenues from extended warranties, sales of accessories and repair service revenues for post-warranty period.
Gross MarginSecond quarter 2013 gross profit was $176.5 million, a 14.9% increase from $153.6 million in the second quarter of 2012. Second quarter 2013 non-GAAP gross profit was $178.7 million, a 15.4% increase from $154.8 million in the second quarter of 2012. Second quarter 2013 gross margin was 57.5% compared to 57.4% both in the second quarter of 2012 and the first quarter of 2013. Non-GAAP gross margin was 58.2% compared to 57.8% in the second quarter of 2012 and 58.1% in the first quarter of 2013.
Operating ExpensesSelling expenses in the second quarter of 2013 were $54.6 million, or 17.8% of total net revenues, unchanged from the second quarter of 2012 but lower than the 19.5% in the first quarter of 2013. Non-GAAP selling expenses were $52.2 million, or 17.0% of total net revenues, unchanged from the second quarter of 2012 and lower than the 18.5% in the first quarter of 2013.
General and administrative expenses for the second quarter of 2013 were $26.6 million, or 8.7% of total net revenues, compared to 9.7% in the second quarter of 2012 and 11.0% in the first quarter of 2013. Non-GAAP general and administrative expenses for the second quarter of 2013 were $26.0 million, or 8.5% of total net revenues, compared to 8.7% in the second quarter of 2012 and 10.0% in the first quarter of 2013.
Research and development expenses for the second quarter of 2013 were $28.6 million, or 9.3% of total net revenues, compared to 8.9% in the second quarter of 2012 and 10.9% in the first quarter of 2013. Non-GAAP research and development expenses for the second quarter of 2013 were $27.4 million, or 8.9% of total net revenues, compared to 8.4% in the second quarter of 2012 and 10.5% in the first quarter of 2013.
Total share-based compensation expenses, which were allocated to cost of revenues and related operating expenses, were $3.2 million in the second quarter of 2013 compared to $6.0 million in the second quarter of 2012 and $4.8 million in the first quarter of 2013.
Operating income was $66.7 million in the second quarter of 2013, a 19.4% increase from $55.9 million in the second quarter of 2012. Non-GAAP operating income in the second quarter of 2013 was $73.1 million, a 15.2% increase from $63.5 million in the second quarter of 2012. Operating margin was 21.7% in the second quarter of 2013 compared to 20.9% in the second quarter of 2012 and 16.1% in the first quarter of 2013. Non-GAAP operating margin was 23.8% in the second quarter of 2013 compared to 23.7% in the second quarter of 2012 and 19.1% in the first quarter of 2013.
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")Second quarter 2013 EBITDA increased 18.8% year-over-year to $78.9 million from $66.4 million in the second quarter of 2012.
Net IncomeNet income increased 19.3% year-over-year to $62.1 million from $52.0 million in the second quarter of 2012. Non-GAAP net income increased 14.7% year-over-year to $68.2 million from $59.5 million in the second quarter of 2012. Net margin was 20.2% in the second quarter of 2013 compared to 19.4% in the second quarter of 2012 and 23.7% in the first quarter of 2013. Non-GAAP net margin was 22.2% in the second quarter of 2013, same with the second quarter of 2012 and compared to 26.7% in the first quarter of 2013.
Second quarter 2013 basic and diluted earnings per share were $0.52 and $0.51 respectively, compared to $0.45 and $0.44 in the second quarter of 2012. Basic and diluted non-GAAP earnings per share were $0.58 and $0.56 respectively, compared to $0.51 and $0.50 in the second quarter of 2012. Shares used in the computation of diluted earnings per share for the second quarter 2013 were 120.8 million.
Other Select DataAccounts receivable turnover days were 52 days in the second quarter of 2013, improved from 64 days in the second quarter of 2012 and 66 days in the first quarter of 2013. Inventory turnover days were 88 days in the second quarter of 2013, compared to 87 days in the second quarter of 2012 and 103 days in the first quarter of 2013. Accounts payable turnover days were 54 days in the second quarter of 2013, the same with the second quarter of 2012 and compared to 59 days in the first quarter of 2013. Mindray calculates the above working capital turnover days using the average of the beginning and ending net balances of the quarter.
As of June 30, 2013, the company had $958.5 million in cash and cash equivalents as well as short-term investments, compared to $891.0 million as of March 31, 2013. Net cash generated by operating activities and net cash outflow for capital expenditures during the quarter were $76.2 million and $20.2 million respectively.
As of June 30, 2013, the company had around 7,540 employees.
Business Outlook for Full Year 2013Mindray is raising its full year revenue guidance, expecting at least 18% growth over its full year 2012 net revenues.
The company maintains its full year 2013 non-GAAP net income guidance, expecting at least 15% growth over its non-GAAP net income for the full year of 2012. This guidance excludes any tax benefit related to the National Key Software Enterprise status and assumes a corporate income tax rate of 15% for the Shenzhen subsidiary.
The company expects its capital expenditure for full year 2013 to be around $130 million.
The company's practice is to provide guidance on a full year basis only. This forecast reflects Mindray's current and preliminary views, which are subject to change.
"Looking ahead, we expect China to continue to drive our overall growth and the emerging markets should gradually improve despite continued political and currency challenges in certain countries. As for the developed markets, while we are happy with our performance in Western Europe, we anticipate uncertainty to persist in our North American business," commented Mr. Cheng Minghe, Mindray's Co-Chief Executive Officer and Chief Strategic Officer. "Going forward, we will further enhance our efficiency to strengthen the company's competitive position. On the M&A front, we are confident about the integration of ZONARE and will continue to seek other promising targets and partners."
Conference Call InformationMindray's management will hold an earnings conference call at 8:00 AM on August 6, 2013 U.S. Eastern Time (8:00 PM on August 6, 2013 Beijing/Hong Kong Time).
Dial-in details for the earnings conference call are as follows:
International Toll Free:United States:
Local dial-in numbers:United States:
+852-2475-0994 China Mobile:
400-620-8038Passcode for all regions:
MindrayA replay of the conference call may be accessed by phone at the following numbers until August 21, 2013.
U.S. Toll Free:
17658491Additionally, a live and archived webcast of this conference call will be available on the Investor Relations section of Mindray's website at: http://ir.mindray.com/.
Use of Non-GAAP Financial Measures Mindray provides gross profit, selling expenses, general and administrative expenses, R&D expenses, operating income, net income and earnings per share on a non-GAAP basis that excludes share-based compensation expense and acquired intangible assets amortization expense, all net of related tax impact, as well as EBITDA to enable investors to better assess the company's operating performance. The non-GAAP measures described by the company are reconciled to the corresponding GAAP measure in the exhibit below titled "Reconciliations of non-GAAP results of operations measures to the nearest comparable GAAP measures".
The company has reported for the second quarter of 2013 and provided guidance for full year 2013 earnings on a non-GAAP basis. Each of the terms as used by the company is defined as follows:
The company computes its non-GAAP financial measures using the same consistent method from quarter to quarter. The company notes that these measures may not be calculated on the same basis of similar measures used by other companies. Readers are cautioned not to view non-GAAP results on a stand-alone basis or as a substitute for results under GAAP, or as being comparable to results reported or forecasted by other companies, and should refer to the reconciliation of GAAP results with non-GAAP results for the three and six months ended June 30, 2012 and 2013, respectively, in the attached financial information.
Cautionary Note Regarding Forward-Looking Statements This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Statements that are not historical facts, including, without limitation, statements about Mindray's anticipated net revenues, non-GAAP net income and capital expenditure for 2013, our assumption of a corporate income tax rate of 15% applicable to the Shenzhen subsidiary, the impact of our recent acquisition of Zonare, our expectation that China is to continue to drive our overall growth and the emerging markets should gradually improve despite continued political and currency challenges in certain countries, our anticipation of uncertainty to persist in our North American business, our optimism about the performance in Western Europe, that we will further enhance our efficiency to strengthen the company's competitive position, that we are confident about the integration of ZONARE and that we will continue to seek other promising targets and partners on the M&A front, are forward-looking statements. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual results due to a variety of factors, including, without limitation, the growth and expected growth of the medical device market in China and internationally; relevant government policies and regulations relating to the medical device industry; market acceptance of our products; our expectations regarding demand for our products; our ability to expand our production, our sales and distribution network and other aspects of our operations; our ability to stay abreast of market trends and technological advances; our ability to effectively protect our intellectual property rights and not infringe on the intellectual property rights of others; our ability to settle disputes with our customers and suppliers; competition in the medical device industry in China and internationally; and general economic and business conditions in the countries in which we operate. For a discussion of other important factors that could adversely affect our business, financial condition, results of operations and prospects, see "Risk Factors" beginning on page 5 of our annual report on Form 20-F which was filed with the Securities and Exchange Commission on April 8, 2013. Our results of operations for the second quarter as of June 30, 2013 are not necessarily indicative of our operating results for any future periods. The financial information contained in this release should be read in conjunction with the consolidated financial statements and notes thereto included in our public filings with the Securities and Exchange Commission. Any projections in this release are based on limited information currently available to us, which is subject to change. Although such projections and the factors influencing them will likely change, we will not necessarily update the information. Such information speaks only as of the date of this release.
All references to "shares" are to our ordinary shares, which are divided into two classes, Class A and Class B. Each of our American Depositary Shares, which trade on the New York Stock Exchange, represents one Class A ordinary share.
About Mindray We are a leading developer, manufacturer and marketer of medical devices worldwide. We maintain our global headquarters in Shenzhen, China, U.S. headquarters in Mahwah, New Jersey and multiple sales offices in major international markets. From our main manufacturing and engineering base in China, we supply through our worldwide distribution network a broad range of products across three primary business segments, namely patient monitoring and life support, in-vitro diagnostic, and medical imaging systems. For more information, please visit http://ir.mindray.com.
For investor and media inquiries, please contact:
Mindray Medical International Limited
In the U.S:
Western Bridge, LLC
Email: firstname.lastname@example.orgExhibit 1MINDRAY MEDICAL INTERNATIONAL LIMITEDCONDENSED CONSOLIDATED BALANCE SHEETS(Dollars in thousands)As of December 31, 2012As of Jun 30, 2013 US$ US$ (Note 1) (unaudited) ASSETSCurrent assets:Cash and cash equivalents
247,859195,373Restricted cash and restricted investment (Note 2)
615,003763,132Accounts receivable, net
110,099128,150Value added tax receivables
15,70426,548Prepayments and deposits
11,08114,745Deferred tax assets, net
6,4438,106Total current assets
10,81110,844Accounts receivables, net, non-current
2,1722,042Advances for purchase of plant and equipment
3,0094,641Property, plant and equipment, net
268,010285,727Land use rights, net
56,92159,350Intangible assets, net
1,857,1181,999,309LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Short-term bank loans
53,24474,992Advances from customers
108,528113,804Purchase consideration payable
20,3548,260Income taxes payable
30,30518,199Other taxes payable
8,8945,067Total current liabilities
402,591404,244Long-term bank loan
50,03995,013Other long-term liabilities
4,0044,088Deferred tax liabilities, net
480,003527,600Shareholders' equity:Ordinary shares
1515Additional paid-in capital
699,992760,396Accumulated other comprehensive income
116,556129,975Total shareholders' equity
1,377,1151,471,709Total liabilities and equity
1,857,1181,999,309(1) Financial information is extracted from the audited financial statements included in the Company's fiscal year 2012 20F.(2) Restricted cash and restricted investment are mainly those purchase consideration in connection with our acquisition being held on escrow accounts.Exhibit 2MINDRAY MEDICAL INTERNATIONAL LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except for share and per share data)Three months ended Jun 30,Six months ended Jun 30,2012201320122013US$ US$ US$ US$ (unaudited) (unaudited) (unaudited) (unaudited) Net revenues- PRC115,294147,415207,134258,747- International 152,536159,736279,713290,507Net revenues267,830307,151486,847549,254Cost of revenues (114,208)(130,668)(212,900)(233,706)Gross profit153,622176,483273,947315,548Selling expenses (47,759)(54,559)(87,488)(101,716)General and administrative expenses (26,111)(26,629)(45,725)(53,213)Research and development expenses (23,877)(28,573)(48,154)(54,901)Income from operations55,87566,72292,580105,718Other income, net388421973499Interest income7,2608,54015,69816,227Interest expense(1,287)(1,471)(1,978)(2,443)Income before income taxes and non-controlling interests62,23674,212107,273120,001Provision for income taxes(10,023)(10,743)(18,366)2,191Net income 52,21363,46988,907122,192Less: Net income attributable to non-controlling interests(206)(1,419)(313)(2,718)Net income attributable to the Company52,00762,05088,594119,474Basic earnings per share0.450.520.761.01Diluted earnings per share0.440.510.740.99Shares used in the computation of:Basic earnings per share116,547,129118,519,629116,283,063118,350,730Diluted earnings per share119,394,768120,779,113119,353,032120,909,507 Exhibit 3MINDRAY MEDICAL INTERNATIONAL LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in thousands)Three months ended Jun 30,Six months ended Jun 30,2012201320122013 US$ US$ US$ US$ (unaudited) (unaudited) (unaudited) (unaudited) Cash flow from operating activities: Net income
52,21363,46988,907122,192 Adjustments to reconcile net income to net cash provided by operating activities
21,87217,01936,28032,329 Changes in current assets and liabilities, net of effects of acquisitions
(12,731)(4,253)(3,711)(35,896)Net cash provided by operating activities 61,35476,235121,476118,625Cash flow from investing activities:Acquisition cost of subsidiaries, net of cash received
(16,745)(20,198)(32,835)(40,240)Decrease in restricted cash and restricted investment
-15,865-21,264Proceeds from sale of short-term investments
-295,076144,395404,337Increase in short-term investments and changes in other investing activities
(32,637)(357,714)(125,489)(549,519)Net cash used in investing activities(49,382)(80,617)(16,668)(181,643)Cash flow from financing activities:Repayment of bank loans
-(35,000)-(35,000)Proceeds from bank loans
--(46,401)(59,070)Proceeds from exercise of options
4,6912,09814,1388,852Cash contribution from non-controlling interest
--506-Net cash provided by financing activities6,6912,09820,2439,782Net increase (decrease) in cash and cash equivalents18,663(2,284)125,051(53,236)Cash and cash equivalents, beginning of period
231,010195,744124,311247,859Effect of exchange rate changes on cash
(1,688)1,913(1,377)750Cash and cash equivalents, end of period247,985195,373247,985195,373
Exhibit 4MINDRAY MEDICAL INTERNATIONAL LIMITEDRECONCILIATONS OF NON-GAAP RESULTS OF OPERATIONS MEASURES TO THENEAREST COMPARABLE GAAP MEASURES(Dollars in thousands, except for share and per share data)Three months ended Jun 30,Six months ended Jun 30,2012201320122013(unaudited)(unaudited)(unaudited)(unaudited) US$ US$ US$ US$ Non-GAAP net income attributable to the Company59,51068,23899,894132,808Non-GAAP net margin22.2%22.2%20.5%24.2%Amortization of acquired intangible assets(1,629)(3,202)(3,264)(5,804)Deferred tax impact related to acquired intangible assets83209118415Share-based compensation(5,957)(3,195)(8,154)(7,945)GAAP net income attributable to the Company52,00762,05088,594119,474GAAP net margin19.4%20.2%18.2%21.8%Non-GAAP basic earnings per share0.510.580.861.12Non-GAAP diluted earnings per share0.500.560.841.10GAAP basic earnings per share0.450.520.761.01GAAP diluted earnings per share0.440.510.740.99 Shares used in computation of: Basic earnings per share 116,547,129118,519,629116,283,063118,350,730 Diluted earnings per share 119,394,768120,779,113119,353,032120,909,507Non-GAAP operating income63,46173,119103,998119,467Non-GAAP operating margin23.7%23.8%21.4%21.8%Amortization of acquired intangible assets(1,629)(3,202)(3,264)(5,804)Share-based compensation(5,957)(3,195)(8,154)(7,945)GAAP operating income55,87566,72292,580105,718GAAP operating margin20.9%21.7%19.0%19.2%Non-GAAP gross profit154,796178,705276,245319,419Non-GAAP gross margin57.8%58.2%56.7%58.2%Amortization of acquired intangible assets (960)(2,060)(1,926)(3,527)Share-based compensation(214)(162)(372)(344)GAAP gross profit153,622176,483273,947315,548GAAP gross margin57.4%57.5%56.3%57.5%Non-GAAP selling expenses(45,472)(52,191)(83,838)(97,097)Non-GAAP as % of total revenues17.0%17.0%17.2%17.7%Amortization of acquired intangible assets (669)(1,142)(1,338)(2,277)Share-based compensation(1,618)(1,226)(2,312)(2,342)GAAP selling expenses(47,759)(54,559)(87,488)(101,716)GAAP as % of total revenues17.8%17.8%18.0%18.5%Non-GAAP general and administrative expenses(23,317)(26,023)(42,418)(50,181)Non-GAAP as % of total revenues8.7%8.5%8.7%9.1%Share-based compensation(2,794)(606)(3,307)(3,032)GAAP general and administrative expenses(26,111)(26,629)(45,725)(53,213)GAAP as % of total revenues9.7%8.7%9.4%9.7%Non-GAAP research and development expenses(22,546)(27,372)(45,991)(52,674)Non-GAAP as % of total revenues8.4%8.9%9.4%9.6%Share-based compensation(1,331)(1,201)(2,163)(2,227)GAAP research and development expenses(23,877)(28,573)(48,154)(54,901)GAAP as % of total revenues8.9%9.3%9.9%10.0%Exhibit 5MINDRAY MEDICAL INTERNATIONAL LIMITEDRECONCILIATION OF GAAP NET INCOME TO EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTIZATION(Dollars in thousands)Three months ended Jun 30,Six months ended Jun 30,2012201320122013US$US$US$US$(unaudited)(unaudited)(unaudited)(unaudited)GAAP net income attributable to the Company
52,00762,05088,594119,474Interest income(7,260)(8,540)(15,698)(16,227)Interest expense1,2871,4711,9782,443Provision for income taxes10,02310,74318,366(2,191)Earnings before interest and taxes ("EBIT")56,05765,72493,240103,499Depreciation7,4517,93414,04115,710Amortization2,9035,2205,7929,497Earnings before interest, taxes, depreciation, and amortization ("EBITDA")66,41178,878113,073128,706
|SOURCE Mindray Medical International Limited|
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