BEIJING, Aug. 13, 2012 /PRNewswire-Asia-FirstCall/ -- Dehaier Medical Systems Ltd. (Nasdaq: DHRM) (“Dehaier” or the “Company”), an emerging leader in the development, assembly, marketing and sale of medical devices and homecare medical products, today announced its financial results for its second quarter and six months ended June 30, 2012.
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Comments from Management
Mr. Ping Chen, Chief Executive Officer of Dehaier Medical, stated, “Throughout the first half of 2012, we continued to focus on diversifying our revenues. While we have continued to build on our medical device sales and distribution foundation, we have also devoted sales resources to growing our proprietary respiratory and oxygen homecare products, explored international expansion possibilities and put more energy into developing and researching homecare products and protecting our intellectual property. Throughout this process we have continued to report strong operating profits. We improved our gross and operating margins and continue to leverage a strong balance sheet with minimal long-term debt. We believe that our business will continue to grow at a healthy rate in the long term as we strengthen our medical device distribution network; increase the market recognition and demand for our proprietary products; research, develop and begin to sell new products; and ramp up our international expansion.”
Operating Highlights
- In April 2012, Dehaier renewed its strategic cooperation agreement with Timesco of London Ltd (“Timesco”). The agreement appointed Dehaier as the exclusive distributor for Timesco’s CXL and Eclipse series laryngoscope products in mainland China for three years.
- In May 2012, the Company extended its exclusive distribution authorization with INTERMEDICAL (“IMD”), to distribute IMD’s RADIUS C-arm X-ray machines in mainland China. The extended term runs through 2014.
- In June 2012, Dehaier entered a three-year strategic mutual cooperation agreement with HEYER Medical AG (“Heyer”). According to this agreement, Dehaier will continue to be one of the key Chinese distributors for Heyer’s anesthesia machines and the exclusive distributor of its nebulizers in China.
- Also in June 2012, the Company co-developed a “High-Efficiency Oxygen Inhaler” with Dr. Ding Jianzhang of Beijing Haidian Hospital. This inhaler is expected to begin selling in mainland China in the third quarter of 2012. The portable device is designed for use in homecare oxygen therapy, emergency treatment, disaster relief activities and high-altitude settings.
- Between April and June 2012, the company obtained software copyrights from China‘s National Copyright Administration for four of its proprietary technologies, including (1) Analysis and Monitoring Software of Adsorption Tower Oxygen Generation Process, (2) Dehaier Homecare CPAP Controlling Software, (3) Ventilator of CPAP Controlling Software and (4) Air Compressor Controlling Software. These copyrights have been approved for 50 years from the grant date.
- In July 2012, Dehaier received approval from China‘s State Food and Drug Administration (“SFDA”) for its proprietary homecare medical CPAP device, the DHR-CPAP-C5.
Second Quarter 2012 Financial Highlights
- Total revenues were $7.0 million for the three months ended June 30, 2012, compared to $7.7 million in the prior-year quarter. The decrease was largely a result of the aforementioned change in operating strategy to focus on Dehaier’s own homecare products and larger government procurement projects.
- The Company’s gross profit for the quarter ended June 30, 2012 was $2.7 million, or 39.2% of revenue, compared to $2.8 million, or 36.8% of revenue, in the prior-year period. Gross margin improved largely as a result of improved operating efficiencies and inventory management.
- Dehaier’s income from operations improved slightly, or 0.1%, to $1,928,212 in the 2012 second quarter from $1,925,024 in the prior-year period, largely due to lower selling expenses for the period. The Company expects its selling expenses to grow as it invests in strengthening its distribution network, growing relationships with customers, developing the homecare device market (in particular its oxygen therapy service initiative) and driving top-line growth in these areas.
- The Company reported net income attributable to the Company of $1.7 million, or $0.36 per diluted share in the 2012 second quarter, compared to $1.7 million, or $0.39 per diluted share in the prior year.
Fiscal 2012 Six Month Financial Highlights
- Total revenues decreased by 3% to $10.3 million for the six months ended June 30, 2012, from $10.7 million in the prior-year period.
- The Company’s gross profit for the six months ended June 30, 2012 was $4.0 million, or 39% of revenue, compared to $3.8 million, or 36% of revenue, in the prior-year period.
- Dehaier’s income from operations improved 7% to $2.4 million for the six months ended June 30, 2012, from $2.2 million in the prior-year period.
- The Company reported net income attributable to the Company of $1.8 million, or $0.39 per diluted share in the six months ended June 30, 2012, compared to $1.9 million, or $0.43 per diluted share in the prior year.
Balance Sheet Highlights
