Mindray Medical International Limited News
Mindray Medical International Announces First Quarter 2008 Results
Highlights for First Quarter 2008 — First quarter 2008 net revenues were RMB626.0 million (US$89.3 million), an increase of 48.2% over from RMB422.4 million (US$54.7 million) in the first quarter 2007. — Net revenues generated in international markets in the first quarter 2008 were RMB319.6 million (US$45.6 million), an increase of 49.4% from RMB213.9 million (US$27.7 million) in the first quarter 2007. — Net revenues generated in China in the first quarter 2008 were RMB306.4 million (US$43.7 million), an increase of 46.9% from RMB208.5 million (US$27.0 million) in the first quarter 2007. — Non-GAAP operating profit, as defined below, in the first quarter 2008 was RMB220.5 million (US$31.4 million), a 54.6% increase from RMB142.6 million (US$18.5 million) in the first quarter 2007. First quarter 2008 GAAP operating profit was RMB199.8 million (US$28.5 million). — First quarter 2008 non-GAAP net income, as defined below, was RMB199.2 million (US$28.4 million), an increase of 42.7% from RMB139.6 million (US$18.1 million) in the first quarter 2007. First quarter 2008 GAAP net income was RMB179.4 million (US$25.6 million). — First quarter 2008 non-GAAP diluted earnings per share, as defined below, was RMB1.76 (US$0.25) compared to RMB1.25 (US$0.16) in the first quarter 2007. First quarter 2008 GAAP diluted earnings per share was RMB1.59 (US$0.23). First quarter 2008 income tax expense was RMB40.8 million (US$5.8 million), representing an effective tax rate of 18.5% compared to a 15.7% effective tax rate in the first quarter 2007, or an increase of 78.6% from RMB22.9 million (US$3.0 million) in the first quarter 2007. — Mindray provides gross margin, operating margin, net income and earnings per share on a non-GAAP basis that exclude non-cash, share- based compensation expense and acquired intangible assets amortization expense to enable investors to better assess the Company's operating performance. The non-GAAP measures are described below and reconciled to the corresponding GAAP measure in the section below titled ''Use of Non-GAAP Financial Measures.''
''We delivered another quarter of strong results both in
The Company develops and manufactures over 40 products which are available in more than 140 countries.
''Despite a challenging currency environment, we achieved high growth in international markets that was widespread across geographies and well balanced between product segments while maintaining a high gross margin,'' added Mr.
Financial Results for First Quarter 2008
Mindray reported net revenues of
Net revenues generated in international markets in the first quarter 2008 increased 49.4% to
Net revenues generated in
Performance by Segment
Patient Monitoring & Life Support Products: Patient monitoring & life support products segment revenues increased 30.2% to
In-Vitro Diagnostic Products: In-vitro diagnostic products segment revenues increased 56.1% to
Medical Imaging Systems: Medical imaging systems segment revenues increased 61.2% to
Gross Margins
First quarter 2008 non-GAAP gross profit, as defined below, was
Operating Expenses
Non-GAAP selling expenses for the first quarter 2008 were
Non-GAAP general and administrative expenses for the first quarter 2008 were
Non-GAAP research and development expenses for the first quarter 2008 were
Total share-based compensation expenses, which were allocated to cost of goods sold and related operating expenses, were
Non-GAAP operating profit, as defined below, in the first quarter 2008 was
Net Income
First quarter 2008 non-GAAP net income increased 42.7% year-over-year to
First quarter 2008 basic and diluted non-GAAP earnings per share were
The China Unified Corporate Income Tax Law (the "New Law") became effective on
Other Select Data
Average accounts receivable days outstanding was 32 days for the first quarter 2008 compared to 22 days for the first quarter 2007 and 26 days for the full year 2007. Inventory turnover was 64 days for the first quarter 2008 compared to 72 days for the first quarter 2007 and 55 days for the full year 2007. Average accounts payable days outstanding was 68 days for the first quarter 2008 compared to 75 days for the first quarter 2007 and 59 days for the full year 2007.
As of
As of
Business Outlook for Full Year 2008
In
The updated full-year 2008 non-GAAP (excluding share-based compensation expenses and amortization of intangible assets resulting from acquisitions) net income guidance will be in the range of
Non-GAAP EPS is expected to be in the range of
In accordance with SFAS No. 123R, the Company estimates total share-based compensation expenses in 2008 will be approximately
The Company expects its capital expenditure for 2008 to be in the range of
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.
The translation rate of RMB to USD in the business outlook section is based on Mindray's estimated average forecast foreign exchange rate, which is
Change in Reporting Currency to the U.S. Dollar
Effective
Conference Call Information
Mindray's management will hold an earnings conference call at
Dial-in details for the earnings conference call are as follows: Hong Kong: +852-3002-1672 US Toll Free: +1-800-706-7748 International: +1-617-614-3473 Passcode for all regions: Mindray
A replay of the conference call may be accessed by phone at the following numbers until
US Toll Free: +1-888-286-8010
International: +1-617-801-6888
Passcode: 61704457
Additionally, a live and archived webcast of this conference call will be available on the Investor Relations section of Mindray's website at http://www.mindray.com .
About Mindray
Mindray Medical International Limited is a leading developer, manufacturer and marketer of medical devices in
Use of Non-GAAP Financial Measures
The Company has reported (1) for the first quarter 2008 non-GAAP net income, operating income, and earnings per share on a non-GAAP basis and (2) for the estimated full year 2008 non-GAAP net income and earnings per share. Each of the terms as used by the Company is defined as follows:
— Non-GAAP gross profit represents gross profit reported in accordance with GAAP, adjusted for the effects of share-based compensation, and expense and/or amortization of acquired intangible assets. — Non-GAAP operating profit represents operating profit reported in accordance with GAAP, adjusted for the effects of share-based compensation, and expense and/or amortization of acquired intangible assets including, but not limited to, in-progress research and development (IPR&D). — Non-GAAP net income represents net income reported in accordance with GAAP, adjusted for the effects of share-based compensation, and expense and/or amortization of acquired intangible assets including, but not limited to, IPR&D, all net of related tax impact. — Non-GAAP earnings per share represents non-GAAP net income divided by the number of shares used in computing basic and diluted earnings per share in accordance with GAAP, and excludes the impact of the deemed dividends for the basic calculation.
In addition to Mindray's consolidated financial results under GAAP, the Company also provides non-GAAP financial measures, including non-GAAP gross margin, non-GAAP operating profit, non-GAAP net income and non-GAAP earnings per share on a basic and fully diluted basis. The Company believes that both management and investors benefit from referring to these non-GAAP financial measures in assessing Mindray's financial performance and liquidity and when planning and forecasting future periods. These non-GAAP operating measures are useful for understanding and assessing Mindray's underlying business performance and operating trends and the Company expects to report operating profit and net income on a non-GAAP basis using a consistent method on a quarterly basis going forward.
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-month periods ended
Cautionary Note Regarding Forward-Looking Statements
This press release contains "forward-looking statements" including those related to the Company's anticipated operating results for 2008, the anticipated timing for closing the Datascope transaction and the corresponding impact on the Company's operating results, and the Company's anticipated effective tax rate. These statements are not historical facts but instead represent only our belief regarding future events, many of which, by their nature, are inherently uncertain and outside of our control. It is possible that our actual results and financial condition and other circumstances may differ, possibly materially, from the anticipated results and financial condition indicated in these forward-looking statements. In addition, the Datascope transaction may not close when anticipated or at all. Readers are cautioned that these forward-looking statements are only predictions and may differ materially from actual future events or results due to a variety of factors, including but not limited to: the expected growth of the medical device market in
This announcement contains translations of certain Renminbi amounts into US dollars at specified rates solely for the convenience of readers. Unless otherwise noted, all translations from Renminbi to US dollars as of and for the quarters ended
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.
The accounting policies underlying the financial information for the segmental reporting are based primarily on statutory accounting requirements in the PRC. Exhibit 1 MINDRAY MEDICAL INTERNATIONAL LIMITED CONDENSED CONSOLIDATED BALANCE SHEETS As at December 31, 2007 As at March 31, 2008 RMB RMB US$ (unaudited) (unaudited)(unaudited) ASSETS (In thousands) (In thousands) Current assets: Cash and cash equivalents 1,379,009 1,486,983 212,063 Short-term investments 407,744 658,244 93,874 Accounts receivable, net 210,176 234,473 33,439 Inventories 181,022 202,418 28,867 Value added tax receivables 238 60 9 Other receivables 39,155 43,131 6,151 Prepayments and other 14,009 19,783 2,821 Deferred tax assets - current portion 4,400 3,550 506 Total current assets 2,235,753 2,648,642 377,730 Loans to employees 4,366 3,876 553 Long-term investments 250,000 — — Other assets 15,294 15,291 2,181 Advance for purchase of plant and equipment 132,053 152,332 21,724 Property, plant and equipment, net 350,551 406,407 57,959 Land use right 17,764 17,731 2,529 Intangible assets, net 130,649 125,942 17,961 Goodwill 122,169 122,169 17,423 Total assets 3,258,599 3,492,390 498,059 LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Notes payable 63,460 62,508 8,914 Accounts payable 132,820 148,757 21,215 Advance from customers 52,696 61,583 8,783 Salaries payables 60,857 33,707 4,807 Other payables 124,661 283,849 40,480 Income taxes payable 56,246 82,190 11,721 Other taxes payable 14,801 13,547 1,932 Total current liabilities 505,541 686,141 97,852 Advance from customers — 14,003 1,997 Minority interests 11 11 2 Deferred tax liabilities, net 24,699 23,751 3,387 24,710 37,765 5,386 Shareholders' equity: Ordinary shares 111 111 16 Additional paid-in capital 2,062,361 2,083,314 297,107 Retained earnings 737,596 778,932 111,086 Accumulated other comprehensive loss (71,720) (93,873) (13,387) Total shareholders' equity 2,728,348 2,768,484 394,821 Total liabilities and shareholders' equity 3,258,599 3,492,390 498,059 (1) All translations from Renminbi to US dollars as of and for the quarter ended March 31, 2008 were made at the noon buying rate of the Federal Reserve Bank of New York as of March 31, 2008, which was RMB7.012 to US$1.00 Exhibit 2 MINDRAY MEDICAL INTERNATIONAL LIMITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS Three months ended March 31, 2007 2008 2008 RMB RMB US$ (unaudited) (unaudited) (unaudited) (In thousands, except share and per share data) Net revenues - PRC 208,543 306,388 43,695 - International 213,866 319,605 45,580 Net revenues 422,409 625,993 89,275 Cost of revenues (note 2) (185,282) (272,101) (38,805) Gross profit 237,127 353,892 50,469 Selling expenses (note 2) (48,050) (75,065) (10,705) General and administrative expenses (note 2) (23,168) (18,720) (2,670) Research and development expenses (note 2) (41,265) (60,304) (8,600) Other general expenses (37) (44) (6) Operating income 124,607 199,759 28,488 Other income, net 3,164 3,596 513 Interest income 17,560 16,884 2,408 Interest expense (96) (35) (5) Income before income taxes and minority interests 145,235 220,204 31,404 Provision for income taxes (22,866) (40,837) (5,824) Minority interests — — — Net Income 122,369 179,367 25,580 Basic earnings per share 1.16 1.68 0.24 Diluted earnings per share 1.09 1.59 0.23 Shares used in the computation of: Basic earnings per share 105,743,984 106,962,659 106,962,659 Diluted earnings per share 111,869,215 112,998,260 112,998,260 (2) Share-based compensation charges incurred during the period related to: Cost of revenues 349 789 113 Selling expenses 4,892 5,767 822 General and administrative expenses 4,022 4,091 583 Research and development expenses 4,000 5,357 764 Exhibit 3 MINDRAY MEDICAL INTERNATIONAL LIMITED RECONCILIATIONS OF NON-GAAP RESULTS OF OPERATIONS MEASURES TO THE NEAREST COMPARABLE GAAP MEASURES Three months ended March 31, 2007 2008 2008 RMB RMB US$ (unaudited) (unaudited) (unaudited) (In thousands, except share and per share data) Non-GAAP net income (note 3) 139,633 199,231 28,413 Non-GAAP net margin 33.1% 31.8% 31.8% Expense/Amortization of acquired intangible assets (4,707) (4,707) (671) Deferred tax impact related to acquired intangible assets 706 847 121 Effect of change in tax rate on deferred tax — — — Share-based compensation (13,263) (16,004) (2,282) GAAP net income 122,369 179,367 25,580 GAAP net margin 29.0% 28.7% 28.7% Non-GAAP income per share - basic 1.32 1.86 0.27 Non-GAAP income per share - diluted 1.25 1.76 0.25 GAAP income per share - basic 1.16 1.68 0.24 GAAP income per share - diluted 1.09 1.59 0.23 Shares used in computation of: Basic earnings per share 105,743,984 106,962,659 106,962,659 Diluted earnings per share 111,869,215 112,998,260 112,998,260 Non-GAAP operating income 142,577 220,470 31,442 Non-GAAP operating margin 33.8% 35.2% 35.2% Expense/Amortization of acquired intangible assets (4,707) (4,707) (671) Share-based compensation (13,263) (16,004) (2,282) GAAP operating income 124,607 199,759 28,488 GAAP operating margin 29.5% 31.9% 31.9% Non-GAAP gross profit 242,183 359,388 51,253 Non-GAAP gross margin 57.3% 57.4% 57.4% Expense/Amortization of acquired intangible assets (4,707) (4,707) (671) Share-based compensation (349) (789) (113) GAAP gross profit 237,127 353,892 50,469 GAAP gross margin 56.1% 56.5% 56.5% For investor and media inquiries please contact: In China: Investor Relations May Li Mindray Medical International Limited Tel: +86-755-2658-2518 Email: IR@Mindray.com Justin Knapp Ogilvy Public Relations Worldwide, Beijing Tel: +86-10-8520-6556 Email: Justin.Knapp@Ogilvy.com In the United States: Jeremy Bridgman Ogilvy Public Relations Worldwide, New York Tel: +1-212-880-5363
SOURCE Mindray Medical International Limited
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