Dehaier Medical Systems Q2 Revenue Up 46% to $4.83 Million; Net Income Up 59% to 1.14 Million; EPS 0.27
Company Continues to Expand Marketing Strategies
BEIJING, Aug. 16 /PRNewswire-Asia-FirstCall/ -- Dehaier Medical Systems Ltd. (Nasdaq: DHRM), an emerging leader in the development, assembly, marketing and sale of medical devices and homecare medical products in China, today reported financial results for its second quarter 2010 ended June 30, 2010.
Q2 2010 Financial Highlights
-- Revenue for the second quarter ended June 30, 2010 increased 46% to
$4.83 million from $3.31 million in the same quarter a year ago
reflecting the increased acceptance of the company&;s products among
hospitals and other healthcare facilities. Expanded product lines also
contributed to the revenue growth.
-- Gross profit increased 46% to $1.92 million for Q2 FY&;10 from $1.31
million in Q2 FY&;09.
-- Gross margin for the second quarter ended March 31, 2010 remained
constant at 40%, the same as the second quarter in 2009.
-- Operating income rose 52.76% to $1.36 million in Q2 FY&;10 compared with
$0.89 million in Q2 FY&;09 primarily due to the increased revenues.
-- Net income attributable to Dehaier for the second quarter ended June 30,
2010 increased 59% to $1.14 million, compared to $0.72 million for the
same period of 2009.
-- Earnings per diluted share in Q2 FY&;10 was $0.27, compared to $0.24 per
diluted share in Q2 FY&;09.
Six Months Highlights
-- Revenue for the first six months of 2010 increased by 28% to $7.47
million from $5.83 million in the first six months of 2009.
-- Gross profit increased 29% to $2.89 million from $2.25 million in the
same period of 2009.
-- Gross margin for the first six months ended June 30, 2010 remained
constant at 39%, which is the same as that of the first six months in
-- Operating income rose 49% to $2.0 million from $1.35 million in the
same period of 2009.
-- Net income attributable to Dehaier for the first six months increased
58% to $1.66 million, compared to $1.05 million for the same period of
-- Earnings per diluted share in H1 FY&;10 was $0.46, compared to $0.35 per
diluted share in H1 FY&;09.
Liquidity and Capital Resources
The company&;s cash balance on June 30, 2010 was approximately $6.54 million. On June 30, 2010 Dehaier had short-term debt of $1,474,610 in the form of a short-term bank loan due in June 2011. The company had no long-term debt. Working capital was $17,559,244, which the company said would be adequate to meet anticipated cash needs and sustain current operations for at least 12 months.
Dehaier CEO Mr. Ping Chen said, "The second quarter of 2010 was an exciting period for our rapidly growing company. We recorded another quarter of excellent financial results and our stock began trading on the Nasdaq Capital Market with our successful initial public offering ("IPO"), which closed on April 22, 2010. We sold 1,500,000 shares that produced net proceeds of $9,944,207.
"This has provided us with sufficient working capital to expand our marketing efforts in order to grow our revenues in China and internationally.
"The increase in revenues reflected increased acceptance of our products among hospitals and other healthcare facilities as many of our end users such as hospitals became repeat customers when they needed new medical equipment. The increase in revenue was also due to Dehaier&;s growing line of product offerings.
"We signed several exclusive distribution agreements this quarter with international firms Penlon, HEYER and Welch Allyn to expand our product lines. Sales of products from these companies are already contributing to revenue growth.
"We are targeting the addition of four to eight new product offerings per year. We anticipate these new products will include distributed products as well as products that are developed or acquired by Dehaier. We have designated 25 percent of the IPO proceeds for product research and development. Another 20 percent of the IPO proceeds have been budgeted for potential acquisitions, clearly showing our focus on building a pipeline of products to introduce to our customers. We will be concentrating on products that enhance our capability to serve the respiratory and oxygen homecare markets.
"Underscoring the important competitive advantage we are achieving with our proprietary home oxygen therapy products is our previously-announced new contract with Beijing C&D Co. to purchase Dehaier oxygen-chip units.
"In addition to increasing sales of our fast-growing Dehaier brand homecare medical products, we are building new revenue streams by adding to our product line offerings through complementary acquisitions, such as the emergency ventilator product line we purchased from Beijing Qiumanshi Technology Co., as announced last month. That acquisition included the production technology as well as the complete proprietary intellectual property.
"With the marketing capital provided by our IPO, we plan to open new customer experience centers ("CECs") to strengthen our market presence throughout China. These CECs give our potential customers an opportunity to experience our products first-hand in an environment similar to the environment in which they will use the products, either in a home or in a healthcare facility. Our initial CEC is already operational in Beijing and we anticipate opening three new CECs in the third quarter and up to nine CECs during the fourth quarter, so that we will operate CECs in twelve cities at the end of 2010. Our plan to open CECs in provincial capitals and big cities throughout China is a key part of our strategy for growing our high-margin homecare medical product sales.
"We have participated in several medical exhibitions and tradeshows in China and abroad to network and build relationships and alliances as we further build our distribution network in China and internationally.
"Our business outlook continues to be very favorable. We are excited to bring our growth story to the financial community, and were very pleased to participate recently in the Global Hunter investment conference in San Francisco. We remain comfortable with our previously announced earnings per share target for 2010 of $0.80," Mr. Chen said.
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 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), Welch Allyn (USA), Penlon (UK), HEYER (Germany), 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
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