BETHESDA, MARYLAND November 16, 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 Peoples Republic of China, today announced results for its third quarter and nine months ended September 30, 1998.
Revenue for this years third quarter was $3.4 million with a net loss of $737,000, or a loss per share of $0.12. This compares to revenue of $6.9 million with a net loss of $456,000 or a loss per share of $0.07 for the same period last year.
Revenue for this years nine month period was $11.8 million with a net loss of $2.8 million or a loss per share of $0.45. This compares to revenue of $16.4 million with a net loss of $1.1 million or a loss per share of $0.17 for the same period last year.
The Company noted that the foregoing financial results were and continue to be significantly impacted negatively by a variety of factors including inability of customers to make purchase commitments or open letters of credit because of new foreign exchange documentation and procedural requirements, and delays in purchase commitments related to uncertainty regarding foreign exchange regulations and exchange rates. The Company believes that these problems and uncertainties reflect a growing impact of the ongoing Asian financial crisis on China.
Chindex Chairperson, President and CEO, Roberta Lipson, speaking from Beijing, commented on the third quarter results and the factors currently impacting Chindex business:
"Our results for the third quarter and nine months reflect the impact which the Asian financial crisis is having on China. Our Company has responded to these challenges and will continue to do so by taking decisive restructuring and cost reduction measures. Our strategic diversification of our revenue base is moving forward with increasing proportions of our revenue coming from healthcare services and consumable products.
"We are very pleased with the progress of Beijing United Family Hospital. Revenues have been growing quickly and, after less than a year of operation, the hospital is quickly approaching positive cash flow on monthly operations. In addition, the first satellite clinic for dentistry will be opening at Beijing United early next year which will further expand the facilitiys revenue base. This segment of our business is not impacted at all by the foreign exchange regulations and other market conditions we are facing elsewhere in our business
"We are close to final approvals on our $14.1 million loan program to be guaranteed by the Export-Import Bank of the United States. This loan program is also not affected by the new foreign exchange restrictions and we are targeting shipment of these orders late this year. This will be the largest loan program ever for the supply of medical equipment to the Chinese healthcare system. Chindex is proud to have worked closely with the U.S. and Chinese Governments to have initiated this program in 1998. We are now working on continuing such financing programs in future years and have recently applied for a $25 million Letter of Interest from the Export-Import Bank of the United States for a planned 1999 program.
"1998 continues to be a challenging year for all foreign businesses in China. The new foreign exchange regulations that have been implemented by the Chinese Government have received substantial coverage in the Western press and are continuing to impede our transactional business substantially. While we see this as a transition period in the market conditions in China, we do expect these circumstances to continue to impact us in the near term."
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 Chinas professional communities. Chindex is listed on NASDAQ under the ticker symbol CHDX. More information is available at the Companys 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 Companys products and services and other risks identified in the Companys 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.
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