Highlights for 2010 Third Quarter and Nine Months
- Third quarter 2010 net revenues were $168.3 million, an increase of 11.3% over the third quarter of 2009. First nine months net revenues were $493.3 million, an increase of 10.8% year-over-year.
- Strong international sales of $99.2 million as compared to $84.3 million for the third quarter of 2009, a year-over-year increase of 17.7%.
- Non-GAAP net income increased 5.8% year-over-year to $39.5 million from $37.4 million in the third quarter of 2009. First nine months non-GAAP net income was $125.6 million, an increase of 18.8% year-over-year.
- Gross margin in the third quarter of 2010 was 58.8%, compared to 56.6% in the third quarter of 2009 and 58.3% in the second quarter of 2010.
- Net operating cash generated during the third quarter of 2010 was $27.9 million.
- The company launched nine new products and several new reagents across its three product lines year to date.
"Our results this quarter reflected strong international sales growth, which grew 17.7% year-over year," commented Xu Hang, Mindray's Chairman and Co-Chief Executive Officer. "We are encouraged by the continued growth momentum in both emerging and developed markets. Similar to last quarter, Latin America, the CIS region and the Middle East led growth among all regions while the developed markets again recorded double-digit growth. In China, revenues grew 3.3% year-over-year, not as strong as the year prior largely as a result of continued softening in government spending for medical device purchasing, as well as tier two and below hospitals continuing to lag in self-funded purchases. Tender sales were flat from last quarter. While the long-term prospects of the healthcare sector in China driven by reform remain favorable, the timing associated with medical device purchasing under the plan remains unclear. Non-tender sales grew 1% year-over-year. As we have communicated to investors, we are realigning our sales force and undertaking other strategic initiatives in product development and marketing in order to focus on building out presence in both high-end and low-end market segments, as well as to improve operational efficiency. Mindray continues to focus on innovation and we are pleased to announce the planned openings of three new R&D centers by end of this year."
SUMMARY ThirdQuarter and Nine Months Ended September 30, 2010 | |||||||
(in $ millions, except per-share data) | Three Months Ended | Nine Months Ended | |||||
September 30 | September 30 | ||||||
2010 | 2009 | % chg | 2010 | 2009 | % chg | ||
Net Revenues | 168.3 | 151.1 | 11.3% | 493.3 | 445.3 | 10.8% | |
Revenues generated in China | 69.1 | 66.8 | 3.3% | 203.6 | 205.1 | -0.7% | |
Revenues generated outside China | 99.2 | 84.3 | 17.7% | 289.7 | 240.2 | 20.6% | |
Gross Profit | 99.0 | 85.5 | 15.7% | 285.7 | 251.8 | 13.4% | |
Non-GAAP Gross Profit | 100.2 | 87.2 | 14.9% | 289.8 | 256.8 | 12.8% | |
Operating Income | 38.7 | 34.2 | 13.2% | 118.2 | 102.6 | 15.2% | |
Non-GAAP Operating Income | 42.4 | 40.0 | 5.9% | 129.5 | 118.6 | 9.2% | |
EBITDA | 45.8 | 60.1 | -23.8% | 138.8 | 142.3 | -2.5% | |
Net Income | 35.9 | 43.4 | -17.2% | 114.4 | 101.8 | 12.4% | |
Non-GAAP Net Income | 39.5 | 37.4 | 5.8% | 125.6 | 105.7 | 18.8% | |
Diluted EPS | 0.30 | 0.38 | -20.4% | 0.97 | 0.90 | 7.9% | |
Non-GAAP Diluted EPS | 0.34 | 0.33 | 1.7% | 1.07 | 0.94 | 14.0% | |
Revenues
Mindray reported net revenues of $168.3 million for the third quarter of 2010, an 11.3% increase from $151.1 million in the third quarter of 2009. Net revenues generated in China in the third quarter of 2010 increased 3.3% to $69.1 million from $66.8 million in the third quarter of 2009, while net revenues generated in international markets in the third quarter of 2010 increased 17.7% to $99.2 million from $84.3 million in the third quarter of 2009.
Performance by Segment
Patient Monitoring & Life Support Products: Patient monitoring & life support products segment revenues increased 7.2% to $72.6 million from $67.7 million in the third quarter of 2009. The patient monitoring & life support products segment contributed 43.1% to total net revenues in the third quarter of 2010.
In-Vitro Diagnostic Products: In-vitro diagnostic products segment revenues increased 15.5% to $43.1 million from $37.3 million in the third quarter of 2009. The in-vitro diagnostic products segment contributed 25.6% to total net revenues in the third quarter of 2010.
Medical Imaging Systems: Medical imaging systems segment revenues increased 17.5% to $42.7 million from $36.4 million in the third quarter of 2009. The medical imaging systems segment contributed 25.4% to total net revenues in the third quarter of 2010.
Others: Other revenues, which are primarily comprised of service fees charged for post warranty period repair services, increased 1.4% to $9.9 million from $9.7 million in the third quarter of 2009. Other revenues contributed 5.9% to total net revenues in the third quarter of 2010.
The segment revenue amounts discussed above include shipping and handling fees charged to customers.
Gross Margins</
