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CHINDEX INTERNATIONAL, INC.
ANNOUNCES SECOND QUARTER 1998 RESULTS

BETHESDA, MARYLAND – August 14, 1998 - Chindex International, Inc. (NASDAQ: CHDX) (U.S.-China Industrial Exchange, Inc.), the leading independent American company providing Western healthcare products distribution and medical services in the People’s Republic of China, today announced results for its second quarter and six months ended June 30, 1998. The Company showed improvements on the quarterly results over the prior year.

Revenue for this year’s second quarter was $5.5 million with a net loss of $671,000, or a loss per share of $0.11. This compares to revenue of $3.8 million with a net loss of $761,000 or loss per share of $0.12 for the same period last year.

Revenue for this year’s six month period was $8.4 million with a net loss of $2.1 million or a loss per share of $0.33. This compares to revenue of $9.5 million with a net loss of $596,000 or a loss per share of $0.09 for the same period last year.

The Company noted, however, that the foregoing financial results were and continue to be impacted negatively by a variety of factors including delay in the opening of letters of credit for previously signed contracts. The Company believes that these delays are principally attributable to bureaucratic delays resulting from the recent restructuring of the Chinese Government and uncertainties regarding exchange rates due to the ongoing Asian financial crisis.

Chindex Chairperson, President and CEO Roberta Lipson, speaking from Beijing, commented on the second quarter results and the factors currently impacting Chindex business:

"Our results for the second quarter and six months show the growing positive impact of our restructuring and cost reduction measures we implemented at the end of 1997. Our strategy is to position Chindex for future growth as the premier American company in healthcare products and services in the China market. We have effectively implemented our restructuring and cost containment programs in the first half of this year and see the positive effect of that in our results. We expect continued improvement in our future operating results as our revenue diversification program in both healthcare products and services continues to grow."

"We have already announced several exciting new distribution relationships in healthcare instruments, consumables and pharmaceuticals this year. I am also happy to report that the first Chindex private hospital, Beijing United, was formally opened during a ceremony presided over by Secretary of Commerce William Daley this past June during President Clinton's visit to China. We will have additional announcements of new distribution relationships as the year goes on. We also expect to announce the first formal expansion of Beijing United, the addition of a dental clinic, before the end of the year."

"The biggest hurdle we face in the near term is financing for our Chinese customers. During President Clinton’s visit to China in June, we officially announced the $15 million loan program to provide funding guaranteed by the U.S. Export Import Bank for the purchase of our equipment. We are working hard to secure the final government approvals which would allow this loan to be processed this year."

"In recent months we have seen the impact of the Asian economic problems here in China. We are experiencing delays in our regular foreign trade contract processing. We attribute these factors to general uncertainties in the domestic and international economies related to the ongoing Asian economic situation. These factors, in part, account for the sluggish revenue performance we have seen over the first half of the year compared to last year. We continue to be encouraged by the determination of the Chinese government to limit the impact of these economic conditions," Lipson concluded.

Chindex is a leading American company in healthcare in the Greater Chinese marketplace including Hong Kong and Macau. It provides representative and distribution services to a number of multinational companies including Acuson, Johnson & Johnson, Kendall Healthcare Products, and Schering AG. It also operates a private hospital corporation in China. With over sixteen years experience, 200 employees, and operations in the United States, China and Hong Kong, the Chindex strategy is to expand its cross-cultural reach by providing leading edge technologies, quality products and services to Greater China’s professional communities. Chindex is listed on NASDAQ under the ticker symbol CHDX. More information is available at the Company’s website: www.chindex.com.

The statements in this press release that relate to future plans, events or performance are forward-looking statements that involve risks and uncertainties, including risks associated with uncertainties pertaining to customer orders, demand for products and services, development of markets for the Company’s products and services and other risks identified in the Company’s SEC filings. Actual results, events and performance may differ materially. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to release publicly the result of any revisions to these forward-looking statements that may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

# # # #

Financial Summary Attached

U.S.-CHINA INDUSTRIAL EXCHANGE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

         
   

Three Months Ended June 30,

 

Three Months Ended June 30,

 
     

1998

   

1997

   

1998

   

1997

 
Sales  

$

5,492,000

 

$

3,757,000

 

$

8,405,000

 

$

9,255,000

 
Net commission income    

16,000

   

81,000

   

16,000

   

195,000

 
Total Revenue    

5,508,000

   

3,838,000

   

8,421,000

   

9,450,000

 
                           
Cost and Expenses                          

Cost of goods sold

   

3,564,000

   

2,744,000

   

5,702,000

   

6,669,000

 

Salaries and payroll taxes

   

1,233,000

   

1,020,000

   

2,407,000

   

1,855,000

 
Travel and entertainment    

483,000

   

644,000

   

756,000

   

949,000

 
Other    

1,198,000

   

935,000

   

2,085,000

   

1,575,000

 
                           
Total Costs and Expenses    

6,478,000

   

5,343,000

   

10,950,000

   

11,048,000

 
                           
Loss from operations  

(

970,000

)

(

1,505,000

)

(

2,529,000

)

(

1,598,000

)

                           
Other income and expenses                          
Interest expense    

27,000

   

5,000

   

39,000

   

21,000

 
Interest income    

41,000

   

111,000

   

108,000

   

320,000

 
Miscellaneous Income    

288,000

   

140,000

   

426,000

   

279,000

 
                           
Total other income/expenses    

302,000

   

246,000

   

495,000

   

578,000

 
                           
Loss before provision                          
for income taxes  

(

668,000

)

(

1,259,000

)

(

2,034,000

)

(

1,020,000

)

(Provision for) /benefit from                          
income taxes  

(

3,000

)

(

498,000

)

(

44,000

)

 

424,000

 
Net loss  

$(

671,000

)

$(

761,000

)

$(

2,078,000

)

$(

596,000

)

Net loss per share  

$(

0.11

)

$(

0.12

)

$(

0.33

)

$(

$0.09

)

Weighted average shares
outstanding
   

6,322,500

   

6,322,500

   

6,322,500

   

6,322,00

 

 

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