SHENZHEN, China, Feb. 27, 2012 /PRNewswire-Asia-FirstCall/ -- 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 fourth quarter and full year ended December 31, 2011.
Highlights for Fourth Quarter and Full Year 2011
"2011 marks another year of significant achievements in Mindray's history. We strengthened our sales and distribution in domestic and emerging markets, and increased our direct sales effort in developed markets. We also enhanced our system to gain deeper market insights and accelerated our product upgrades and portfolio expansion," commented Mr.Xu Hang, Mindray's Chairman and Co-Chief Executive Officer. "While China and the emerging markets were the key growth drivers for the company, we also delivered solid results in the developed markets. Our performance in the US, which reached high-teens growth for the year, was particularly strong. This gave us even more confidence in our ability to continue expanding our global presence in the future."SUMMARY – Fourth Quarter and Year Ended December 31, 2011(in $ millions, except per-share data)
Three Months EndedYear EndedDecember 31December 3120112010% chg20112010% chgNet Revenues
25.1%Revenues generated in China
27.6%Revenues generated outside China
21.3%Non-GAAP Gross Profit
7.4%Non-GAAP Operating Income
7.2%Non-GAAP Net Income
9.0%Non-GAAP Net Income (ex tax benefit -Note)
6.4%Non-GAAP Diluted EPS
8.2%Note: The amount excludes the tax benefits related to the key software enterprise status ($8.6 million and $7.6 million recognized in the first quarter of 2010 and 2011 respectively).Fourth Quarter 2011 ResultsRevenuesMindray reported net revenues of $264.1 million for the fourth quarter of 2011, a 25.2% increase from $211.0 million in the fourth quarter of 2010.
Performance by SegmentPatient Monitoring and Life Support Products: Revenues in this segment increased 20.5% to $119.5 million from $99.1 million in the fourth quarter of 2010, contributing 45.3% to the total net segment revenues in this quarter.
In-Vitro Diagnostic Products: Revenues in this segment increased 25.2% to $63.9 million from $51.1 million in the fourth quarter of 2010, contributing 24.2% to the total net segment revenues in this quarter. Reagents sales represented 32.1% of this segment's revenues.
Medical Imaging Systems: Revenues in this segment increased 28.5% to $65.1 million from $50.6 million in the fourth quarter of 2010, contributing 24.6% to the total net segment revenues in this quarter.
Others: The other revenues, primarily comprising service revenue from extended warranty and sales of accessories, increased 54.4% to $15.7 million from $10.2 million in the fourth quarter of 2010, contributing 5.9% to the total net segment revenues in this quarter.
Gross MarginsFourth quarter 2011 gross profit was $143.1 million, a 24.1% increase from $115.3 million in the fourth quarter of 2010. Non-GAAP gross profit was $144.5 million, a 24.0% increase from $116.5 million in the fourth quarter of 2010. The gross margin was 54.2%, compared to 54.7% in the fourth quarter of 2010 and 54.9% in the third quarter of 2011. Non-GAAP gross margin was 54.7%, compared to 55.2% in the fourth quarter of 2010 and 55.5% in the third quarter of 2011.
Operating ExpensesSelling expenses for the fourth quarter of 2011 were $51.9 million, or 19.7% of the total net revenues, compared to 19.9% in the fourth quarter of 2010 and 18.8% in the third quarter of 2011. Non-GAAP selling expenses were $50.2 million, or 19.0% of the total net revenues, compared to 19.2% in the fourth quarter of 2010 and 18.0% in the third quarter of 2011.
General and administrative expenses for the fourth quarter of 2011 were $17.7 million, or 6.7% of the total net revenues, compared to 9.1% in the fourth quarter of 2010 and 9.5% in the third quarter of 2011. Non-GAAP general and administrative expenses were $16.7 million, or 6.3% of the total net revenues, compared to 8.5% in the fourth quarter of 2010 and 8.9% in the third quarter of 2011.
Research and development expenses for the fourth quarter of 2011 were $25.6 million, or 9.7% of the total net revenues, compared to 7.9% in the fourth quarter of 2010 and 8.9% in the third quarter of 2011. Non-GAAP research and development expenses were $24.5 million, or 9.3% of the total net revenues, compared to 7.7% in the fourth quarter of 2010 and 8.4% in the third quarter of 2011.
Total share-based compensation expenses for the fourth quarter of 2011, which were allocated to cost of goods sold and related operating expenses, were $3.2 million, compared to $1.7 million in the fourth quarter of 2010 and $3.1 million in the third quarter of 2011.
Operating income in the fourth quarter was $47.9 million, a 28.1% increase from $37.4 million in the fourth quarter of 2010. Non-GAAP operating income was $53.0 million, a 26.9% increase from $41.8 million in the fourth quarter of 2010. Operating margin was 18.1% compared to 17.7% in the fourth quarter of 2010 and 17.7% in the third quarter of 2011. Non-GAAP operating margin was 20.1%, compared to 19.8% in the fourth quarter of 2010 and 20.1% in the third quarter of 2011.
Earnings Before Interest, Taxes, Depreciation and Amortization ("EBITDA")Fourth quarter 2011 EBITDA increased 8.1% year-over-year to $57.6 million from $53.3 million in the fourth quarter of 2010.
Net IncomeFourth quarter 2011 net income was $46.8 million compared to $41.0 million in the fourth quarter of 2010. Non-GAAP net income increased 14.2% to $51.8 million from $45.4 million in the fourth quarter of 2010. Net margin was 17.7%, compared to 19.5% in the fourth quarter of 2010 and 17.1% in the third quarter of 2011. Non-GAAP net margin was 19.6%, compared to 21.5% in the fourth quarter of 2010 and 19.4% in the third quarter of 2011. Fourth quarter 2011 income tax expense was $8.2 million, representing an effective tax rate of 14.9%, compared to a 15.5% effective tax rate in the fourth quarter of 2010.
Fourth quarter 2011 basic and diluted earnings per share were $0.41 and $0.40, respectively, compared to $0.36 and $0.35 in the fourth quarter of 2010. Fourth quarter 2011 basic and diluted non-GAAP earnings per share were $0.45 and $0.44, respectively, compared to $0.40 and $0.38 in the fourth quarter of 2010. Shares used in the computation of diluted earnings per share for the fourth quarter of 2011 were 118.4 million.
Other Selected DataAccounts receivable days were 66 days in the fourth quarter of 2011 compared to 71 days in the third quarter of 2011. Inventory days were 78 days in the fourth quarter compared to 100 days in the third quarter. Accounts payable days were 44 days in the fourth quarter compared to 58 days in the third quarter. Mindray calculates the above working capital days using the average of beginning and ending balances of the quarter.
As of December 31, 2011, the company had total $603.5 million in cash and cash equivalents, and short-term investments as compared to $532.2 million as of September 30, 2011. Net cash generated from operating activities and net cash outflow for capital expenditures for the quarter were $96.4 million and $26.2 million, respectively.
As of December 31, 2011 the company had approximately 6,800 employees, up from 6,391 employees as of December 31, 2010.
Full Year 2011 ResultsMindray reported net revenues of $880.7 million for the full year 2011, a 25.1% increase from $704.3 million for the full year 2010.
Full year 2011 EBITDA increased 6.1% to $203.7 million from $192.1 million in 2010.
Full year 2011 net income was $166.6 million compared to $155.5 million in 2010. Non-GAAP net income increased 9.0% year-over-year to $186.3 million from $170.9 million in 2010. Net margin was 18.9%, compared to 22.1% in 2010. Non-GAAP net margin was 21.2%, compared to 24.3% in 2010. Full year 2011 income tax expense was $22.6 million, representing an effective tax rate of 11.9%, compared to 10.2% in 2010.
Diluted earnings per share increased 6.4% year-over-year to $1.41 from $1.32 in 2010. Non-GAAP diluted earnings per share increased 8.2% to $1.57 from $1.45 in 2010.
Dividend DeclarationMindray's board of directors has declared a cash dividend on its ordinary shares of $0.40 per share, based on the company's net income for the full year 2011. The cash dividend will be payable on or around April 10, 2012, to shareholders of record as of March 9, 2012. The company has approximately 116 million outstanding ordinary shares as of January 31, 2012.
Business Outlook for Full Year 2012The company expects its full year 2012 net revenues to grow at least 18% over its full year 2011 net revenues. The company also expects its full year 2012 non-GAAP net income to grow at least 13% over its non-GAAP net income for full year 2011. This guidance excludes the tax benefits related to the key software enterprise status ($7.6 million recognized in the first quarter of 2011 for the calendar year 2010 and the potential tax benefit that we may receive in 2012 for the calendar year 2011) and assumes a corporate income tax rate of 15% applicable to the Shenzhen subsidiary.
The company expects its capital expenditure for 2012 to be around $90 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 are optimistic about the overall market environment in our key markets," commented Li Xiting, Mindray's President and Co-Chief Executive Officer. "We believe China will continue to be the bright spot due to our strong competitive position and favorable private and government spending trends in the healthcare industry. In emerging markets, we will continue to grasp private and public opportunities, although we foresee headwinds in regions that are politically unstable. For developed markets, we are happy with our steady market share gain in the US, while we expect some pressure on our sales in Western Europe as a result of economic uncertainty. We will, however, strive to achieve yet another year of operational excellence and remain confident about our company's long-term position in the global market."
Conference Call InformationMindray's management will hold an earnings conference call at 8:00 AM on February 28, 2012 U.S. Eastern Time (9:00 PM on February 28, 2012 Beijing/Hong Kong Time).
Dial-in details for the earnings conference call are as follows:
International Toll Free: United States:
800-930-346China Domestic Landline:
800-819-0121China Domestic Mobile:
400-620-8038International Toll:United States:
+852-2475-0994Passcode for all regions:
MindrayA replay of the conference call may be accessed by phone at the following numbers until March 13, 2012.
U.S. Toll Free:
50040452Additionally, 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 MeasuresMindray provides gross profit, R&D expenses, selling expenses, general and administrative expenses, operating income, net income and earnings per share on a non-GAAP basis, as well as EBITDA to enable investors to better assess the company's operating performance.
The company has reported for the fourth quarter and full year of 2011 and provided guidance for full year 2012 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 months and years ended December 31, 2010 and 2011, respectively, in the attached financial information.
Cautionary Note Regarding Forward-Looking StatementsThis 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 2012,, the tax benefit that we may receive in 2012 for the calendar year 2011, our assumption of a corporate income tax rate of 15% applicable to the Shenzhen subsidiary, our ability to continue expanding our global presence in the future, our optimism about the overall market environment in our key markets, our belief that China will continue to be the bright spot due to our strong competitive position and favorable private and government spending trends in the healthcare industry, our anticipation to continue to grasp private and public opportunities in emerging markets although we foresee headwinds in regions that are politically unstable, our steady market share gain in the U.S., our anticipation of some pressure on our sales in Western Europe as a result of economic uncertainty, that we will strive to achieve another year of operational excellence and remain confident about our company's long-term position in the global market, 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 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; 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 4 of our annual report on Form 20-F which was filed on April 8, 2011. Our results of operations for the fourth quarter of 2011 and the full year ended December 31, 2011 are not necessarily indicative of our operating results for any future periods. The company has not completed its audit of 2011 financial statements and the selected unaudited financial results for the fourth quarter and full year ended December 31, 2011 announced today are subject to adjustment. The anticipated results for the fourth quarter and full year ended December 31, 2011 remain subject to the finalization of the company's year-end closing, reporting and audit processes, particularly as related to accrued expenses, income taxes, share-based compensation expenses, and expenses and/or amortization of intangible assets. 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 MindrayWe 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:
In the U.S:
Exhibit 1 MINDRAY MEDICAL INTERNATIONAL LIMITEDCONDENSED CONSOLIDATED BALANCE SHEETS(Dollars in thousands)As of December 31, 2010As of December 31, 2011US$ US$ (Note 1) (unaudited) ASSETSCurrent assets:Cash and cash equivalents
296,003479,173Accounts receivable, net
79,18594,690Value added tax receivables
9,95316,590Prepayments and deposits
7,5969,792Deferred tax assets
2,4813,483Total current assets
4,5527,330Advances for purchase of plant and equipment
15,7756,239Property, plant and equipment, net
207,636237,952Land use rights, net
46,07955,272Intangible assets, net
1,150,5611,458,971LIABILITIES AND SHAREHOLDERS' EQUITYCurrent liabilities:Short-term bank loans
44,32248,501Advances from customers
66,61567,499Income taxes payable
13,58216,847Other taxes payable
4,2867,412Total current liabilities
174,557257,231Long-term bank loan
-35,025Other long-term payables
1,1332,355Deferred tax liabilities, net
8,26812,9259,40150,305Shareholders' equity:Ordinary shares
1515Additional paid-in capital
434,143566,184Accumulated other comprehensive income
-(10,160)Total shareholders' equity
966,6031,151,435Total liabilities and shareholders' equity
1,150,5611,458,971(1) Financial information is extracted from the audited financial statements included in the Company's fiscal year 2010 20F.Exhibit 2 MINDRAY MEDICAL INTERNATIONAL LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS(Dollars in thousands, except for share and per share data) Three months ended December 31, Year ended December 31, 2010 2011 2010 2011 US$ US$ US$ US$ (unaudited) (unaudited) (Note 1) (unaudited) Net revenues-PRC89,829117,630293,435374,312- International 121,146146,500410,874506,431Net revenues210,975264,130704,309880,743Cost of revenues (95,674)(121,035)(303,334)(394,302)Gross profit115,301143,095400,975486,441Selling expenses (41,894)(51,917)(122,960)(167,049)General and administrative expenses (18,329)(17,689)(61,193)(70,330)Research and development expenses (16,763)(25,589)(60,316)(82,024)Realignment costs - post acquisition(919)-(919)-Operating income37,39647,900155,587167,038Other income, net8,6985168,8353,108Interest income2,9057,25811,57520,816Interest expense(437)(470)(2,900)(1,390)Income before income taxes and non-controlling interests48,56255,204173,097189,572Provision for income taxes(7,513)(8,220)(17,631)(22,647)Net income 41,04946,984155,466166,925Less: Net income attributable to non-controlling interests-(189)-(296)Net income attributable to the Company41,04946,795155,466166,629Basic earnings per share0.360.411.371.45Diluted earnings per share0.350.401.321.41Shares used in the computation of:Basic earnings per share114,627,335115,466,221113,638,024115,254,095Diluted earnings per share117,957,675118,365,008117,581,196118,449,851Exhibit 3 MINDRAY MEDICAL INTERNATIONAL LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Dollars in thousands)Three months ended December 31,Year ended December 31, 2010 2011 2010 2011 US$ US$ US$ US$ (unaudited) (unaudited) (Note 1) (unaudited) Cash flow from operating activities: Net income
41,04946,795155,466166,629 Adjustments to reconcile net income to net cash from operating activities
10,23513,35339,37849,825 Changes in current assets and liabilities
15,93336,287(47,148)(24,050)Net cash generated from operating activities67,21796,435147,696192,404Cash flow from investing activities: Acquisition cost, net of cash acquired
---(6,530) Capital expenditure
(22,172)(26,207)(65,915)(89,938) (Increase)/decrease in restricted cash
(206)-76,347- Proceeds from sale of restricted/short term investments
9,0277,150100,943100,274 Increase in short term investments and changes in others investing activities
(83,642)(70,940)(298,747)(262,085)Net cash used in investing activities(96,993)(89,997)(187,372)(258,279)Cash flow from financing activities: Repayment of bank loans
145-(169,066)- Proceeds from bank loans
---85,399 Dividend paid
--(22,799)(34,522) Proceeds from exercise of options
1,0051,73011,1607,121 Stock repurchase
-(10,160)-(10,160) Net proceeds from secondary public offering
--149,661- Cash contribution from non-controlling interest
---797Net cash generated from/(used in) financing activities1,150(8,430)(31,044)48,635Net decrease in cash and cash equivalents(28,626)(1,992)(70,720)(17,240)Cash and cash equivalents at beginning of period
164,715124,785204,228137,502Effect of exchange rate changes on cash
1,4131,5183,9944,049Cash and cash equivalents at end of period137,502124,311137,502124,311Exhibit 4 MINDRAY MEDICAL INTERNATIONAL LIMITEDRECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE
NEAREST COMPARABLE GAAP MEASURES(Dollars in thousands, except for share and per share data)Three months ended December 31,Year ended December 31, 2010 2011 2010 2011 (unaudited)(unaudited)(unaudited)(unaudited) US$ US$ US$ US$ Non-GAAP net income45,37451,797170,944186,325Non-GAAP net margin21.5%19.6%24.3%21.2%Amortization of acquired intangible assets(1,742)(1,931)(7,487)(7,255)Deferred tax impact related to acquired intangible assets3487208189Realignment costs - post acquisition(919)-(919)-Legal fees---(262)Share-based compensation(1,698)(3,158)(7,280)(12,368)GAAP net income 41,04946,795155,466166,629GAAP net margin19.5%17.7%22.1%18.9%Non-GAAP basic earnings per share0.400.451.501.62Non-GAAP diluted earnings per share0.380.441.451.57GAAP basic earnings per share0.360.411.371.45GAAP diluted earnings per share0.350.401.321.41 Shares used in computation of: Basic earnings per share 114,627,335115,466,221113,638,024115,254,095 Diluted earnings per share 117,957,675118,365,008117,581,196118,449,851Non-GAAP operating income41,75552,989171,273186,923Non-GAAP operating margin19.8%20.1%24.3%21.2%Amortization of acquired intangible assets(1,742)(1,931)(7,487)(7,255)Realignment costs - post acquisition(919)-(919)-Legal fees---(262)Share-based compensation(1,698)(3,158)(7,280)(12,368)GAAP operating income37,39647,900155,587167,038GAAP operating margin17.7%18.1%22.1%19.0%Non-GAAP gross profit116,497144,503406,302491,870Non-GAAP gross margin55.2%54.7%57.7%55.8%Amortization of acquired intangible assets (1,122)(1,219)(5,007)(4,667)Share-based compensation(74)(189)(320)(762)GAAP gross profit115,301143,095400,975486,441GAAP gross margin54.7%54.2%56.9%55.2%Non-GAAP selling expenses(40,565)(50,249)(117,911)(160,032)Non-GAAP as % of total revenues19.2%19.0%16.7%18.2%Amortization of acquired intangible assets (620)(712)(2,480)(2,588)Share-based compensation(709)(956)(2,569)(4,429)GAAP selling expenses(41,894)(51,917)(122,960)(167,049)GAAP as % of total revenues19.9%19.7%17.5%19.0%Non-GAAP general and administrative expenses(17,994)(16,734)(59,602)(66,950)Non-GAAP as % of total revenues8.5%6.3%8.5%7.6%Realignment costs - post acquisition(919)-(919)-Legal fees---(262)Share-based compensation(335)(955)(1,591)(3,118)GAAP general and administrative expenses(19,248)(17,689)(62,112)(70,330)GAAP as % of total revenues9.1%6.7%8.8%8.0%Non-GAAP research and development expenses(16,183)(24,531)(57,516)(77,965)Non-GAAP as % of total revenues7.7%9.3%8.2%8.9%Share-based compensation(580)(1,058)(2,800)(4,059)GAAP research and development expenses(16,763)(25,589)(60,316)(82,024)GAAP as % of total revenues7.9%9.7%8.6%9.3%Exhibit 5 MINDRAY MEDICAL INTERNATIONAL LIMITEDRECONCILIATION OF GAAP NET INCOME TO EARNINGS BEFORE INTEREST, TAXES,
DEPRECIATION AND AMORTIZATION(Dollars in thousands)Three months ended December 31,Year ended December 31, 2010 2011 2010 2011 US$US$US$US$(unaudited)(unaudited)(unaudited)(unaudited)GAAP net income41,04946,795155,466166,629Interest income(2,905)(7,258)(11,575)(20,816)Interest expense4374702,9001,390Provision for income taxes7,5138,22017,63122,647Earnings before interest and taxes ("EBIT")46,09448,227164,422169,850Depreciation4,6366,36718,77523,216Amortization2,5843,0198,88610,661Earnings before interest, taxes, depreciation, and amortization ("EBITDA")53,31457,613192,083203,727
|SOURCE Mindray Medical International Limited|
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